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Dell Goes Upscale With XPS

New York — Dell Computers announced a major shift in its business philosophy yesterday, resulting in the company being reshaped to more effectively target, attract and retain high-end customers.

The revamp consists of adding the pricy XPS PC line to its merchandise mix, whose customers will be supported by a dedicated staff of Dell sales and service personnel and cutting prices on the company’s backbone Inspiron and Dimension series. These lines were also tweaked with each being subdivided into Basic and Entertainment class products.

“XPS is targeted at two basic groups: those for whom technology is central to their lifestyles, like gamers, and technologically friendly households — people who are not too technical, but appreciate how technology enhances their lives,” said Mike George, Dell’s VP, U.S. Consumer.

Dell had previously used the XPS brand only for its gaming computers. (See “Dell Intros XPS Line” for a breakdown of the new models.)

George called the gamer market underserved, stating that there are between 5 million and 7 million extreme gamers and 30 million mainstream gamers worldwide. To better serve the hardcore gamers Dell has started a pilot program, placing XPS kiosks in 25 GameStop stores. These will give customers a chance to handle the computers in a gaming environment. If the pilot program is successful, George said, Dell will expand it into more GameStop locations.

An XPS model also will be placed in Dell’s mall-based kiosks.

The GameStop kiosks are not the only tool Dell will use to entice high-end customers to XPS. All XPS owners are automatically entitled to a higher level of sales and customer service. George said this assistance is particularly needed by the previously mentioned “technologically friendly households” who might not have enough practical experience to implement the newest technologies, but want to take advantage of what the high-tech products have to offer.

These customers will be handled by the XPS sales team, an elite group among Dell’s associates who had to survive a rigorous selection process to make the team, George said.

“From research to purchase, the customer will have the same sales counselor. We want to develop a more personal relationship. This will be much more than what you would get at a store,” George said.

The company’s intention is for customers to have a single point of contact with Dell for the life of their product. In addition, XPS customers will get preferential treatment when calling for customer support. The XPS service center has been developed along the same lines as its sales force. All XPS owners are directed to a service person who only handles XPS-related calls. George promised that these individuals will know the computers inside and out and be able to handle questions and problems from even the most dedicated gamer.

For those with a quick question or simple problem, Dell is in the process of creating an online support center. This will include a chat service that will connect a customer to a service associate.

Dell’s CEO Michael Dell said his company’s Web site receives 100 million unique visits per year and 85 percent of all Dell customers use the site.

Dell intends to support the entire XPS package with an all-out ad campaign that will cover TV, radio and print.

The XPS level of service will be confined to that brand of products for the time being, but George said Dell will soon offer an increased level of support for its other product lines. He did not go into detail, but said it would include capabilities like remote assistance where a technician could access a person’s PC to diagnose and fix problems. No timetable was given for this services implementation.

An expanded installation program is also on tap for Dell’s flat-panel televisions. George said customers will soon choose from seven installation options, ranging from simply dropping off the box to full home theater installation.

While the XPS brand garnered most of the company’s attention, the changes made to the Inspiron and Dimension lines are equally important. The Basic units are entry-level models targeted at first-time buyers or those looking for an inexpensive second or third computer. The Entertainment, or E-Series, PCs, which will fill the price gap up to the XPS level, are expected by Dell to generate the majority of Dell’s consumer sales and will contain the majority of Dell’s desktop and notebook SKUs. As part of Dell’s effort to push Media Center, all the E-Series models are Media Center capable, and the company expects the majority of consumers to accept this option.