Microsoft has struggled to convince users of Vista’s superiority to XP. And there continues to be a demand for the old OS. As of 1st July Windows XP is officially no longer being shipped by PC suppliers, but Dell have announced on their small business blog an ingenious way of downgrading to XP Pro after buying Vista. Gamers can also access the “bonus downgrade” for a fee of between $20 and $50. [Story from Internet News] As Will Smith remarks on the blog: shouldn’t Dell offer consumers what they are asking for, the ability to keep using what they perceive as a “superior product” - XP? Both Dell and Microsoft are playing a dangerous game by ignoring this level of consumer dissatisfaction.

The scene is the playground at my wife’s school in Oxford in the 1980s. Two children put their arms around each other’s shoulders, they start chanting: “Anybody want to play kiss-chase?” As each child joins they put their arms around the shoulders of a child at either end of the line they join in with the chant: “Anybody want to play kiss chase?” The chant gets louder, so more of the other children can hear. Finally enough people had gathered for a game of kiss-chase. The line breaks up and the game begins.

This is a nice emblem for social marketing.

You try to find a group of people who like what you like, do what you do. You belong to the group not for itself, necessarily, but perhaps because you want something to happen. You want to bring back the Wispa chocolate bar. You want Dell to carry on shipping PCs with Windows XP. But you could simply be celebrating your love of Van Morrison or Rock Band.

Of course Dell and Cadbury and Van Morrison may want to join in - not as members - but they may think - we should talk to these folk, they want to talk to us …

How to start that conversation? How to sustain it?

Facebook has real challenges for marketers. Brands can’t join as individuals. It is expensive to open a channel and very hard to measure the impact of what you do. Marketeers - including in our own client base are reviewing alternatives like Twitter. So how do the channels compare?

How effective Twitter is depends what you are trying to do. Twitter is best viewed as a channel through which to reach an existing audience - one that has formed spontaneously elsewhere.

Facebook manages the cohesion of people around an idea or interest - the forming of that playground group - Twitter simply allows it. In principle that makes Facebook the superior option, but its high price and the opacity of the metrics it offers make other options attractive.

The attraction of monitoring existing conversations about you and marketing your Twitter feeds to these groups is that you can track your following and the direct responses to your messages. You have control; no one is taxing your ability to talk to the market. So in the long run, for marketers, Twitter wins.

Dell have just announced a profits jump of 46%, topping analysts’ estimates. The stock price rose to the $28 level. This chart shows the stock price’s movements over the last six months. [Data from Marketwatch]

In March 2007 Market Sentinel completed a case study looking at how sentiment was changing relative to Dell’s customer service. It is Frederick Reichheld’s contention that you can predict the future of a company by asking its customers if they would recommend it. We apply this methodology to consumer commentary online, but with a twist. We look for the reasons consumers give for their recommendation or their disparagement of a company. Our study showed an improvement in general sentiment about Dell’s customer service in 5 of the 7 key metrics we used. Customers were still irritated by the simple errors made by customer service in recording names and addresses and by the practice of off-shoring in general. But in relation to general customer service issues, speed of response, technical competence and other miscellaneous issues, sentiment had moved positively from the year before. There was also a highly positive response to Dell’s social media initiatives StudioDell and IdeaStorm.

If you have bought the stock at $22 six months ago on the back of this study, you would have been looking at an appreciation of 27%. That is ahead of the market (the Dow Jones Industrial average is up around 16.6% over this period). Our report lends additional support to Reichheld’s thesis: investors should track sentiment as a leading indicator of company value.

Citing pressure from its social media forum IdeaStorm, Dell has launched Linux Ubuntu desktops in the UK.

Today we publish a new white paper: Responding to Crisis Using Social Media. It is an update to our white paper Measuring Blogger Influence, which looked at the Dell Hell débacle and measured the role of bloggers in creating the damage to Dell’s reputation for good customer service. Dell has publicised their increased investment in customer services and has launched the social media initiatives Direct2Dell (their blog), StudioDell and IdeaStorm to increase dialogue with its customers.

Has it worked? We surveyed customer commentary from before and after the new initiatives and used our net promoters methodology to find out.

The bad news is that the increased spend on customer services ($150m - on Dell’s figures) has not yet had a strong positive impact on overall sentiment. There has been a slight dropping off in the volume of negative commentary about customer service, but errors seem to be up and opposition to off-shoring has increased. The good news for Dell is that its social media initiatives have offset this, and there are signs that they may be successful in changing opinions about the company. The recent PR wins which saw Dell salvage XP for domestic customers and announce the launch of a Linux Ubuntu desktop (although they occurred after our data sample was taken) have reinforced the impression that using social media is a big customer service plus for Dell.

Dell’s users have been thronging their new feedback site IdeaStorm demanding that Dell retain Windows XP as an option on new computers. They feel that Vista is a “young operating system with its own problems”. The post that requests XP be retained has received 13,328 endorsements. Dell offered to retain XP for business users earlier in the month. As of last week, Dell have agreed to reintroduce the XP option for home users as well.

This is a great endorsement of Dell’s social media strategy. Dell gets to hear from its customers directly what they want. Dell gives it to them. It’s as simple as that. It sounds obvious, but … listening to your customers is very good for your business.

Dell have launched a blog, a bit more than a year after the Dell Hell debacle with Buzzmachine’s Jeff Jarvis, documented in our case study “Measuring the influence of bloggers on corporate reputation“. There have been a few negative comments. Steve Rubel upbraids them for not mentioning Jeff Jarvis. Jeff Jarvis was not impressed, but at least they linked to his raspberry. I can’t help thinking that Dell should be applauded for at least trying. Blogs are hard to get right, particularly for brands, and the humble tone of voice is a good start.

Since we are considered experts on Dell after our analysis of Dell Hell, I get to see things like this.
At first I thought it was a spoof. But apparently not.

Julian Smith of Jupiter Research highlights the increasing influence of blogs in a piece for the BBC website in the context of the WeMedia forum. He mentions Market Sentinel’s Dell case study as an example of evidence showing that bloggers can be influential.

“For marketers,” Smith writes, “this has the potential to significantly impact brand communications if consumer content refers to experiences with products or services that are incongruous and misaligned with official marketing messages.

“When a company’s marketing story differs from the one being told by online consumers, a credibility gap will emerge that could have dire consequences on brand perception and favourability. “

The BBC’s Robert Plummer gives Market Sentinel’s report on Dell a mention in his UK blogging survey.

To coincide with Les Blogs Market Sentinel are publishing a white paper in association with Onalytica and immediate future. The white paper - Measuring the influence of bloggers on corporate reputation [7mb download] - analyses the impact on the public perception of Dell’s customer services of bloggers, with particular reference to Jeff Jarvis’s Buzzmachine, Steve Rubel’s Micropersuasion and Dwight Silverman’s Houston Chronicle Techblog.

Dell used to have a reputation for quality, convenience and price, combined with peace of mind, thanks to their expensive, but reliable customer support. They made an emotional connection with the PC buyer.

Their recent woes are again highlighted by Business Week. This is more than a “PR” or even a “Customer Services” story. Dell have lost the emotional connection with their buyers due to their failure to deliver on their promises. Blogger Jeff Jarvis has been instrumental in bringing to wider notice a systematic and deep-seated malaise in Dell’s quality assurance and customer service. Plenty of people had issues before Jeff did, and continue to have them today. Read the comments at the bottom of the Business Week story for evidence. Jeff was simply responsible for bringing the issue in front of the mainstream media. Here at Market Sentinel we are quick to bang the drum for blog monitoring, web watching and encouraging companies to use the right tools to respond to PR issues, but in this case to reestablish the emotional connection they have lost Dell have to fix the problem of underdelivery first and then talk about it in the blogs and the forums.

It is significant to note that Dell’s stock price is down, due to stalled growth. The weight of negative commentary coming out of messageboards and blogs has yet again proved to be a reliable leading indicator of stock price. If you would like to benchmark your own company or someone else against its competitors contact us to hear about Market Sentinel’s “Net Promoters” index - based on the work of Frederick Reichheld - we can help you establish whose stock you should be buying, and whose you should be selling.