Aggressive Small Business Marketing & Advertising

Big thoughts, ideas and how-tos for aggressive, fast-growth businesses and the entrepreneurs who fuel them.

03 May

Dell Marketing Strategies

This is one of my favorite stories to tell technology consulting and computer consulting businesses who want to market more effectively. It's a mainstay in my seminars because it illustrates such a critical marketing point -- one every business should be reminded of. Frequently.

I have included a transcription here, and I believe you'll enjoy it. (For the original account this is based on, read Michael Dell's "Direct From Dell" ... an absolutely fantastic book for marketing strategies, entrepreneurial inspiration, and more.)

Most people don't know that one the key marketing strategies that has made Dell Computer so unbelievably successful had nothing to do with the computer business. Dell actually discovered it as a 12-year old kid in Houston, during one of their hot, sweltering, humid, and disgusting summers.
(No offense to anyone in Houston, I'm just not a big fan of hot, humid summers.)
Anyway, he decided one summer to be a paper boy. He wanted to make some extra money, and, as an entrepreneurial kid, that means running a paper route. He went down to the paper where he received a bundle of papers and a list of names to call or visit. The names were randomly picked people who did not have a subscription to the paper.
Dell's job was to begin calling everyone on the list and get some subscriptions sold. He sold one here and he sold one there, but he pretty soon began to notice a pattern. There were two categories of people who were much more likely to buy a subscription from him than anyone else.
First, people who had just moved into a new home.
And second, people who had just married.
It makes sense right?
They are going through life changes that dramatically increase the likelihood of them wanting and needing a paper subscription.
Most kids - and most adult businesspeople - would say, "that's neat" and stop there. But Dell took the next step. He began to ask "how can I target these people and only these people, so that I'm spending my time, resources, and my energy where I know it's going to pay off best?" The answer came when he discovered public information available at the local courthouse could give him access to exactly who he wanted to target. He gathered a small army of 12-years-old kids and sent them all down to the courthouse on a regular basis. They wrote down everyone who had purchased a new home and everyone who had applied for a marriage license. Michael Dell then spent his time selling to those people predisposed to buying. He didn't try to be all things to all people, he narrowly and specifically defined who he wanted to spend his limited time and energy on, he had a much smaller list of potential buyers, and he did an enormous amount of business (for a paper boy!) because of it. When summer ended and Dell went back to school, he was actually making more money from his paper route than the teachers in his school. Most people look at Dell Computer today and think they are being all things to all people. It is an illusion created by their size. The success of Dell lies in large part with market segmentation and specialization strategies that Michael Dell learned that hot Houston summer, pioneered at Dell Computer, and that the company still does today.

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33 Comments & Trackbacks

  • It may well be true, but it is funny how often one hears of young entrepreneurs making more money than their teachers/professors.  It has almost become a cliche of the ‘formative years’ stories about entrepreneurs.

    Submitted on Tuesday, May 04, 2004

  • Sadly, it isn’t all that hard to earn more than someone in the traditional education field. The exception, of course, being a minotiry of published authors and in-demand consultants who also happen to be teachers.

    Submitted on Tuesday, May 04, 2004

  • A Marketing Lesson from a young Mr. Dell
    An Entrepreneur’s Life offers up a great lesson in marketing fundamentals that all entrepreneurs, whether a rookie or a veteran,

    Submitted on Tuesday, May 04, 2004

  • [...] re: All things to all people.  On the same topic, and also of interest… this post on Dell Marketing Strategies. (Mine.) 
     
        Permalink - Targe [...]

    Submitted on Friday, May 28, 2004

  • A Marketing Lesson from a young Mr. Dell
    An Entrepreneur’s Life offers up a great lesson in marketing fundamentals that all entrepreneurs, whether a rookie or a veteran, should reflect upon. It is from a story he tells about Michael Dell’s first business experience as a paper boy….

    Submitted on Saturday, December 04, 2004

  • A Marketing Lesson from a young Mr. Dell
    An Entrepreneur’s Life offers up a great lesson in marketing fundamentals that all entrepreneurs, whether a rookie or a veteran, should reflect upon. It is from a story he tells about Michael Dell’s first business experience as a paper boy….

    Submitted on Saturday, December 04, 2004

  • I am doing a marketing plan for a school project. I need some information on dell segmentation and your pricing strategy. Thank you

    Submitted on Sunday, December 26, 2004

  • dell has taught me alot in marketing and i am very interested in the company and what it produces
    ——-

    Submitted on Wednesday, April 13, 2005

  • WHo handles media planning for Dell???

    my email is .(JavaScript must be enabled to view this email address)

    Submitted on Wednesday, November 29, 2006

  • The paperroute story reinforces my attempt to provide Michael Dell with the following story;While waiting in line to go through the airport security line the first inspector kept saying out loud that liquids liketoothpaste etc. had to go in a zip lock
    bag!;like the one she held up and onto tighly. No if’s and or buts! No’baggie’? To bad!,throw your shampoo etc. in the container ‘it ain’t going with you’!

    Submitted on Thursday, February 08, 2007

  • I wonderedthen and for the past 5 weeks why there were no baggies WITH the following on them:Compliments of: DELL Computer Co.(and theiremail address)!Cost little-much good will!!Maby even an insert with traveling info on one side and a $$ saving coupon on the other.An idea easy to implement.Tell Mr. Dellthat I said hello and good luck.Sincerely -Joe Cassaniti

    Submitted on Thursday, February 08, 2007

  • I need information on Dells target markets for a collge project. Thnk you

    Submitted on Wednesday, February 28, 2007

  • I WANT TO KNOW ABOUT STRATEGY PLANING,MANAGMENT,CHANNEL,PRICE

    Submitted on Wednesday, April 11, 2007

  • Maybe Dell should go back to basics now….it seems now that their main problem is lack of focus on who their target customers are….it seems like they want to grab all markets by the horns…..not a good idea.

    Submitted on Wednesday, May 23, 2007

  • Just found your site while researching Dell’s marketing strategies for my college Marketing assignment. This site proved to be a big help. Thanks

    Submitted on Sunday, August 05, 2007

  • I like Dell, they customize everything to the littlest detail. I’m using Dell laptop for my VoIP business.

    Submitted on Friday, March 07, 2008

  • Dear Sir,
    I am a student from INDIAN INSTITUTE OF TECHNOLOGY ROORKEE. I am going to give a presentation on your life history aince i found it very interesting as an Entrepreneurs life style.
    Could you please send me more information on you life history as it would be very helpful to me. I would be highly greatful to you for this.

    RITIKA

    my email id is .(JavaScript must be enabled to view this email address)

    Submitted on Tuesday, March 11, 2008

  • Please i want to know if Dell is still using this marketing strategy and how they can improve on it. Am using it for a colledge assignment. Thanks .
    This is my E-mail Address. .(JavaScript must be enabled to view this email address)

    Submitted on Wednesday, August 20, 2008

  • dell is going on well ⁢providing maximum cus satisfaction

    Submitted on Friday, September 12, 2008

  • Iam working on a college presentation regarding DELL marketing.SO PLEASE MAIL ME INFORMATION REGARDING THIS TOPIC

    Submitted on Thursday, September 18, 2008

  • To whom it may concern,
      I am putting together a business to business seminar at a local hotel in Ft. Lauderdale for about 25 to 30 businesses. I would like to know if you have someone who can speak for about 30-45 minutes on Basic business needs, Safety of business networks and certainly product offerings. Please let me know if this is something Dell can do for me. We are a national Business Partner with over 150 locations Nationwide.

    Thank you,

    Gary Schatz
    .(JavaScript must be enabled to view this email address)
    (954) 688-5919

    Submitted on Thursday, September 18, 2008

  • Been using DELL for years, not knowing the story behind it. Market segmentation and specialization strategies require great confidence and patience. Thanks.

    Submitted on Tuesday, September 23, 2008

  • Thanks Michael, I read the transcription and enjoy it, keep it on such type of article…

    Submitted on Thursday, September 25, 2008

  • It’s funny how all these little “stories” are conveniently remembered, post-hoc, when someone does get famous. Some of this kind of targeted thinking may have played a role in Dell’s eventual success, but he was surely not alone I bet. Many, many business people have just the kind of a bent of mind, but not everyone gets successful. The reasons for success are different. But then I’m raining on what seems to be a comfy little parade.

    Submitted on Wednesday, October 08, 2008

  • I like Dell but I think they should go into having a different OS system. The Windows system attract viruses like white on rice.  Maybe a linux add would be nice.  Also, great critical thinking on Dell part.  I would say that this is all that happened not really marketing cause I don’t think marketing exist at all.  It’s of a mind game of finding people with needs you can fullfill.  Just as a prostitue, she does not have a target market. Yet still makes thousands with the mind game of satisfy needs she can fulfil.  Marketing I guess would be explaining the needs you can fill and wait for it to happen.

    Submitted on Thursday, December 18, 2008

  • Michael Dell is the perfect example of an entrepreneur giving people what they want and need. Dell has always strived to supply custom made quality pc’s that are affordable.

    But as far as I can see this policy is changing now in Europe anyway, when I go to local computer “superstores” I now see DELL’s along side other brands and I wonder why they have changed the way they sell to the public.

    Great information
    Mike

    Mike Ireland on Thursday, January 22, 2009

  • Hmm… Interesting. I’ll keep this in mind as I take the steps to start up my own business someday.

    Brian on Monday, February 16, 2009

  • I agree… Market segmentation is the way to go. But then there are certain businesses where you really can’t do that because the market is already so segmented and with time it gets harder and harder to pick the trends. Still trying…

    Thanks for a great post.

    Mattress buying (John Warraich) on Monday, February 16, 2009

  • A good lesson for businesses, to be specialized and specific. A business should always know its core competencies before making expansion plans. A lot of them would just get into everything and spread themselves too thin.

    David on Monday, February 23, 2009

  • Interesting thoughts. Thanks a lot. I love reading and I am always searching for informative information like this!

    download games on Tuesday, February 24, 2009

  • To Mike Ireland

    I am actually doing research on Dell for my college course, and what I have found is that, in general, customers prefer looking at and tinkering with the personal computers they are looking to buy. Their old system of made-to-order is no longer cost efficient. This is the reason why HP has passed them as the leading makers of PC’s. It’s just cheaper to mass produce them and offer them in stores to the public.

    Cam on Wednesday, March 25, 2009

  • The dell story is a pretty noteworthy one.. Thanks for sharing!

    Kate
    Steam Shower

    Kate on Sunday, May 31, 2009

  • i am doing an assignment on entrepreneurship,i would like to more information on Dell’s core business,start-up funding,strategy,marketing and organizational structure at start-up

    anthony kganyago on Wednesday, July 01, 2009
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