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Apple #1 with online buyers
Consumers rank Apple as online shopping fave, but what about service after the sale?
November 30, 2005: 4:07 PM EST
ByAmanda Cantrell, CNN/Money staff writer

NEW YORK (CNNMoney.com) - Which Web site provides the best computer buying experience, according to customers? Hint: the same company that makes a little device known as the iPod.

For consumers buying computers directly off the Internet, Apple's web store topped consumers' favorite sites, according to a recent survey.

IBM placed second in a Consumer Reports survey of 78,000 readers who bought a new computer between January 2004 and June 2005, though the company no longer makes consumer PCs since it sold that business to Chinese computer maker Lenovo earlier this year.

Dell, the number-one PC maker, placed third, scoring 84 percent in a Consumer Reports survey of 78,000 readers who bought a new computer between January 2004 and June 2005. Factors considered in the survey include price, product selection, product quality, ease of use, quality of information about the product and return policies.

HP fell slightly behind Dell, scoring an 83 percent overall rating among the companies surveyed. Toshiba, Sony and Gateway rounded out the list, respectively.

Richard Chu, a technology analyst with SG Cowen, said he feels such surveys may portray consumers' psychological feelings about brands, rather than their actual perceptions of the online shopping and service experience.

"The percentage of faulty (computer systems) is really very tiny so if you survey a thousand people, it's likely, by definition, how they feel about the vendor" as opposed to how they feel about the online shopping experience, he said.

Chu said that historically, HP and Apple have been viewed as "middle of the pack" in terms of customer satisfaction, during a period when Dell led the pack. But given its slick marketing and the enormous popularity of its iPod MP3 players and iMac line of computers, Chu said it is not surprising that Apple topped the survey.

"From a mind share perspective, Apple has made huge strides," he said. "That's pretty obvious. I'm not sure there is any objective change in support quality. It could be something that's pulled along by the aura of the brand," a phenomenon he said Dell enjoyed in the 1990s.

The customer is always right

For customers buying computers online, the initial purchase is only one factor to consider another is customer service.

Dell's customer service enjoyed high ratings in the past but has become a hot-button issue recently, as numerous press reports -- and the CNNMoney.com mailbag -- attest. The most common complaints include long wait times for customers calling the company's technical support hotline, and the fact that the company has outsourced some of its customer service to companies offshore, introducing frustrating language barriers for some consumers.

But Mike George, Dell's U.S. consumer vice president, told CNNMoney.com in an interview earlier this year that the company surveys 50,000 customers a week and found that customers reported a 35 percent increase over last year in customer satisfaction. He added that the company pays a lot of attention to customer service and is always trying to improve it.

"While we certainly recognize we have room to improve and we're constantly working to do better, the industry as a whole is suffering a bit trying to figure out how to service customers," said Jennifer Davis, a Dell spokeswoman. "We just re-launched our online support site... We are laser-focused on making it easier for our customers to contact us and to fix their issue the first time."

S.G. Cowen's Chu said that Dell has traditionally topped customer satisfaction surveys, but its rankings have slipped at the same time that its shipments to consumers have grown.

"In the last two to three years, as their business model has grown to where they are selling more and more to consumers, the perception of quality of support has deteriorated, especially when you factor in aggressive outsourcing of customer service offshore," he said. "I don't think there has been a fundamental change in product quality, but maybe a deterioration of quality of support and longer wait times. I don't think it's an easily track-able problem."

Laura DiDio, a technology analyst at Yankee Group, said that Dell has become the number one PC seller because of pricing, and with the high volume and low margins that entails, "you're going to cut corners somewhere. Over the past few years when they looked to maintain these slim profit margins, they outsourced customer service," she said, a move that frustrated some customers. She said Dell has since brought corporate customer service on shore.

"It's interesting to see how that will impact their ratings for the better," she said. "I'd expect Dell to get somewhat better marks the next time around. They've recognized it and are fixing the problems. It's good business sense."

Dell spokeswoman Davis said the company has 30 centers around the world; while she would not comment specifically on which call centers serve which customers, she noted that that on the consumer front, one of the company's best-performing sites in terms of customer satisfaction is located in Bangalor, India.

DiDio noted that while Apple gets high marks for customer service, consumers do pay a higher premium. She added that customer service remains a critical issue for Dell.

"It is harder to get good ratings for customer service because networks themselves are more complex, and there's a lot more to keep track of in terms of de-bugging," she said. (Davis pointed out that customer complaints about "spyware" -- malicious software that highjacks users' browsers, among other privacy-violating concerns -- now account for 20 percent of all customer service calls Dell receives.)

"But if you want to wear the crown, and you don't want it to be a crown of thorns, you have to stay on top of it. Service and support is going to be a big differentiator. Dell has to get better because they are now going to be facing a lot of tough competition from Lenovo."

While weakness in Dell's U.S. and U.K. consumer businesses led the company to issue a lower forecast for the third quarter, it's doing brisk business in the current quarter. Dell's web site pulled 1.88 million unique visitors on "Cyber Monday," the Monday after Thanksgiving, a big day for online holiday shopping sales.

Dell.com ranked as the sixth most popular retail Web site that day, according to research from Nielsen/NetRatings, which tracks traffic to more than 100 retail Web sites.

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