100 GREAT BUSINESS IDEAS • 155Closely linked to the buyer’s cycle is the ability to sell direct to
customers. Dell rose to be the best-selling computer supplier in the
world by tailoring products to each individual need in a way that
customers valued. Dell’s approach was very simple: understanding
its customers and selling direct.
The idea
Dell believes that by selling computer systems directly to
customers it can best understand and meet their needs. This direct
business model eliminates expensive retailers that Dell feels may
diminish its understanding of customer expectations. The direct
model also allows the company to build every system to order at
competitive prices.
In 1988, Dell Computer started competing aggressively with the
market leaders, IBM and Compaq. Dell’s strategy was to provide
good-quality personal computers at low (but not the lowest)
prices, backed up with friendly and reliable aftersales service.
But the real key to Dell’s success was to carefully target this
product offering by getting to know its customers in detail. Large
amounts of advertising were placed in new (and unfashionable)
magazines read by computer experts, raising the business’s
profi le with this key group. Combined with this was Dell’s direct
response advertising method: to get the Dell product catalog,
customers had to complete a detailed response card or call a
toll-free number where they were asked the same, detailed
questions. The Dell phone representatives were highly skilled,
trained to ask questions and to listen to customers, recording