He may have roots in the channel, but Greg Davis is now in charge of making sure Dell’s direct sales model continues to bring growth in Canada.
Davis, who spent eight years as channel sites and management director at IBM, was recently appointed president and general manager of Dell Canada Inc., subsidiary of Round Rock, Texas-based Dell Inc. In this role, he is responsible for all sales, marketing and operations for the business in Canada. Davis joined Dell in 1999 and has held several management positions during the past six years, most recently, sales and marketing efforts for Dell’s printer business across North America and Europe.
Dell has branched out from its traditional product lineup of desktop PCs, notebooks and services to offer peripheral products including printers, projectors, routers and even televisions. But the giant of direct distribution is quickly earning itself a reputation in the services space, and Davis admits this is a critical part of Dell Canada’s business.
Davis recently spoke with a group of ITBusiness.ca editors about the challenges ahead.
ITB: How do Dell’s offerings break down in Canada. How much is focussed on services versus product, for example?
GD: The biggest piece continues to be winning desktops, notebooks and servers. If you think about strategically, where do we see opportunity, it’s clearly around enterprise services and mobility. Our challenge is to ensure when we bring service offerings to market that the complement our relationships with customers and we don’t stretch into service areas that aren’t core to our business.
Our core products continue to be desktops, notebooks and now servers. Around services, we enhance the value we bring to customers on desktops, notebooks and servers. Our services business has really grown from extended warranty . . . now into asset tagging. I run a product down the manufacturing line and it’s extremely cost-effective for me to put an asset tag on when I’m running them down the line. So, services that we call “close to the box,” . . . has grown from being very basic into professional services. Now that we maintain the share position in servers — and we’re a great partner with Microsoft — our ability to do Microsoft Exchange migrations is core to our company, and our customers ask us to help them in that area.
ITB: The Q3 results came out recently and showed earning came in short of your expectations (US$13.9 billion compared to $14.1 billion originally forecast). If corporate customers have indeed increased their IT spending, to what do you attribute the disappointing results?
GD: You have to step back and look at our growth rates and profitability and earnings per share over the last several quarters. We delivered record earnings. We were disappointed they didn’t meet our own internal expectations, but we’re still extremely proud of the fact that in our industry, one that continues to change, evolve and consolidate, we’ve consistently been able to lead in terms of profitability and growth. Our growth outpaced that of our largest competitors, but we still have opportunities to improve.
ITB: In August, the American Customer Satisfaction Index revealed that Dell’s rating was down from the previous year (from 79 to 74). To what do you attribute this?
GD: That information as well as every customer satisfaction survey, we take extremely serious. It is priority No. 1 for us in Canada. Everyone, myself and every one of my executives, a significant amount of the year-end bonus is tied to what our customers tell us we did on customer experience. We have ongoing customer experience surveys that we run with customers.
Internal surveys show that we continue to perform quite well versus our competition, but we have opportunity to grow. We’re not satisfied with where we are in terms of delivering customer experience that we want to deliver to Canadians. We need to do better.
What our customers tell us is actually quite good, but there’s always an area where we can improve. We’re a fast-growing company in Canada and the challenge with growth is staffing and handling the expansion so when customers call us, we can answer the phone quicker. Then we can spend the right amount of time with you on the phone to solve your issue.
We’re staffing our teams and want to do a good job at providing consistent people to our customers, yet it’s a challenge because we’re growing and have new career opportunities for people.
ITB: You’re going to open another call centre in Ottawa. How will that fit with your existing centres in Edmonton and Toronto?
GD: There’s a new centre in Edmonton that we celebrated one year (anniversary) last month. We’ve grown that call centre from, I believe we estimate 500 employees. We now have more than 1,000. Our commitment to Canada continues to expand and grow. We’ve more than doubled Dell Canada employees in the last 18 months (to more than 2,200 employees).
We’ll opening Ottawa in the February/March timeframe and we’ve made a commitment there to have 500 people. Our Edmonton centre continues to provide best-of-breed customer service and support across Canada and North America. As long as our team there is performing at those levels, we’re very excited to continue to add to that team. My expectation is our team in Ottawa will learn from the experiences in Edmonton and have an opportunity to do an even better job.
Both the Edmonton and Ottawa centres service North American customers primarily. What’s great about that is the opportunities for Dell Canada. We need to invest and grow our business in the west of Canada and the east, and having a centre in Edmonton that provides support for the U.S. and Canada gives me a base I can build off of . . . to grow our business in the west. What we expect from Ottawa is the same dynamic: Having an opportunity to grow bilingual skills in Ottawa gives our team an ability to grow our French-speaking service, support, sales effort.
Our goal is to train our teams in multiple sites so we can dynamically route the call, regardless of location, to the best-skilled person to solve your issue and do it right the first time.
Our product line has expanded to offer printers, projectors, servers, routers, storage products and TVs. Depending on the product you have, it’s just as important to me to get it to the person who’s been trained to provide a great level of service.
ITB: How is Dell better able to serve the small-to-medium business market in Canada versus traditional players?
GD: We continue to be configure-to-order for all of our customers. Our customers in the SMB market tell us, there’s not a product that fits 50 per cent of that market. It’s too big. All the SMB customers have different wants and needs in a product. It’s important they can buy the product they want that fits their needs — custom configured. The second piece is service and support. Every single small business owner has a different level of service expectations. Our model is not different for SMBs or large account: It’s direct, it’s custom-configured and it’s the services you want and need. The ability to custom tailor an offering really is exciting for the SMB market. In the past, they haven’t been able to do that as easily as they do with a direct model from Dell.
Because we are direct, we get direct feedback from the SMB customers. They tell us what they want to see in products, services. It doesn’t get filtered through different channels.
ITB: What percentage of your business goes through indirect channels?
GD: I would never quote you a per cent. It’s very, very small. It’s less than five per cent.
ITB: Do you have a specific approach for your very high-end corporate customers?
GD: Our service offerings continue to evolve. What a K-12 school needs and wants from a product and the service that goes with it is completely different from an SMB customer, and that’s completely different from the large corporate accounts.
What we’ve been able to do with our service model is offer different options to any of those customers. In the case of a large corporate account that needs four-hour service, being able to come onsite and resolve my problem in four hours is important. Being able to custom-load images, server consolidation projects; — we talked about Exchange migrations, we’re doing that for Bank of Montreal today — those type of professional services that are close to our core competency. Our core competency in that server arena is 8086-based Intel servers with Microsoft OS loaded onto them. We are uniquely positioned to provide great services around those migration offerings.
ITB: What is the breakdown in your customer space — largest corporate customers, SMB, education?
GD: I can’t really touch on the individual segments, but 15 per cent of our business in consumer. Everything else is business-related.
ITB: Do you see the PC market plateauing?
GD: I think back to what I was doing with my computer three years ago and what I’m doing today. A lot of people say there’s good enough, but we live in an exciting world and there’s new applications and new uses of technology that are ever-evolving. What’s going on with mobility products today and the demands of a mobile computer are completely different than what they were three years ago. I look out into the future and I don’t see anything that’s going to stop that. There will be new applications, new uses of technology that will drive more and more demands on PCs. Those demands are going to require refreshes in hardware.
Across the board you see movement in mobility products. Our products are integrating wireless features and you’re going to see that pure integration continue so that the notebook becomes a computing device you can use anywhere. A lot of that refresh you’re seeing into mobility products.
ITB: What are the short-term challenges for Dell Canada?
GD: The challenge I have is that we have a big business in Canada spanning from the consumer to the largest global account. We provide the majority of our tech support and service in Canada. I’ve been in the role for six months, it’s a lot to get your head around.
I have a great team and they’ve done a great job and I’m trying to learn from them all the different pieces of the market. Opportunities for our business continues to be growth in our SMB market, doing a great job for our large customers on the enterprise and services side. And opportunities to expand in Eastern Canada and how we’ll be able to build off the Ottawa centre and grow our business in the east. There are a lot of French-speaking customer there that we can do a better job for. When we have mor bilingual team members, we’ll be able to do an even better job for them.
ITB: Do you have a numbers target? You have a large installed base here in Canada, but can it grow through existing customers or new products you bring to market?
GD: There’s opportunities to expand our product line within (existing) customers. We have a lot of customers that buy desktops from us, but don’t buy notebooks. At the same time, there are customers we’ve never done business with before. For us with the product line we have now, there are opportunities within every customer set and segment, and our teams understand that, and to the extent we can leverage our relationships . . . then we have a great opportunity to save (our customers) money.
ITB: If and when you move on from Dell Canada, what would you like your legacy to be?
GD: The entire team is focussed on providing a great customer experience, and that’s a tough one because I think the very best can always be better. If we can look up in one year or five years or 10 years and say Dell Canada provides best-in-class industry customer experience, that would be great for our entire team.