The Internet Will BE Your Business

1. The Internet Will BE Your Business Richard Owen Vice President, Dell Online Worldwide October, 1999

2. “The Internet could be considered the ultimate extension of our direct business approach.” Dell Computer CEO Michael Dell Austin-American Statesman 2/26/97

3. Keys to Building Momentum Deliver • Deliver frequently, consistently and to expectations. • Evangelize internet usage to executives, marketing, sales, and customers. Evangelize • Empower an organization to transform your business. Empower

4. Empower a Transformation Create aWeb Culturefast, focussed, fun Build New Processes don’t just put old ones online Forget ROIat first, it will come later Provide Executive Sponsorship to give authority

5. Evangelize to Integrate • with Customers • Training and education • Demand generation • with Sales and Marketing • Hybridization • Training and education • Sales incentives • with the Executive Team • Corporate-wide goals • Regular and frequent communication of successes, failures, and obstacles • Training and education

6. Deliver in Internet Time • Fast and frequent • “Make it happen” • Concept test bed • Momentum builder • “Perceived” ROI Incremental • Slow and difficult • Legacy issues • Internal efficiencies • “Real” ROI Replacement • Fast and slow • Easy and difficult • “The next big thing” Innovation

7. Results to Date $30 $30 Online Sales Reach 25% of Total Sales Premier Pages Introduced For Small Business $25 $20 Michael Dell’s Challenge -50% Online Revenue 500Premier Pages Online Millions of Dollars per Day $15 3,000 Premier Pages Online $14 $10 Premier Pages (Customized Extranet) Launched Premier Pages With Customer Specific Dynamic Pricing $6 $5 $5 Dell.comLaunched Gigabuys.com Launched $4 $3 $1 $0 4/96 4/97 4/98 4/99 • Dell On-Line Sales

8. “Internet will BE your business.” Dell Computer CEO Michael Dell IDC European IT Forum, 09/13/99

9. Internet Will Be Your Business 5X

10. Velocity Efficiency Customer Experience What? How? Why? www.dell.com

11. Velocity What? www.dell.com Velocity

12. Speed to Quality Fast Tech Fast Tech Fast Tech www.dell.com Velocity

13. Turning Our Business Inside Out eSupport B2B Commerce Customer Care Premier Pages Value Chain B2C Commerce Share data and develop common applications to eliminate redundancy and ensure consistent experience Recruiting Internet Data/Common Services Intranet Role Specific Applications • Purchasing - supply chain management • Marketing - product site content management • Sales - order management and customer specific content • SCM - configuration management • Product Engineering - tech support content • Customer Care - service content • HR - job postings Manage the Business Applications Intranet applications, including: • Financial reporting • Pay and Performance Mgmt. • Benefits changes • Corp. Director www.dell.com Velocity

14. Efficiency How? www.dell.com Efficiency

15. Services Efficiency Resolution Without Onsite Dispatch 80% INDUSTRY 27% Source: DataQuest, June 1998 www.dell.com Efficiency

16. Dell OpenManage www.dell.com Efficiency

17. Commerce Efficiency • Customer Standards and Pricing • Build your own quotes • E-quotes & Purchase Authorization Workflow • Paperless POs “Dell’s system is so efficient that it’s like going to the supply room and grabbing a box of pencils.” BancAmerica, 2/98 www.dell.com Efficiency

18. Customer Experience Why? www.dell.com Customer Experience

19. What Drives E-Loyalty 62% Quality of customer service Quality of customer service is a more important driver to repeat online sales than product or price. 19% Product price Source: BizRate.com www.dell.com Customer Experience

20. Focus on Customer Experience Customer Loyalty Brand Equity Increased Market Share Customer Focus www.dell.com Customer Experience

21. Customer Conversion through Experience 100% 80% 60% 40% 20% 1 2 3 4 5 Very Dissatisfied Indifferent Very Satisfied “Apostles” Zone of Affection Zone of Indifference Loyalty Zone of Defection “Terrorists” Source: The Service Profit Chain, 1997 www.dell.com Customer Experience

22. Experience Enhances Lifetime Values Enhanced Value Enhanced Value Enhanced Value Relationship Duration Retention Related Sales Referrals Provided Word of Mouth Source: The Service Profit Chain, 1997 www.dell.com Customer Experience

23. Premier PagesSM Service • Customized Extranet Sites • E-Commerce • Information Sharing • Service and Support www.dell.com Customer Experience

24. B2B Customer Integration Customer Dell Requisitioning Acknowledgement Internet Worklfow Reconciliation Order Submission Notification Logistics Order Management System Tracking Procurement System B2Be Direct - Connecting Customers Directly to Dell Creating a direct business relationship and providing an end-to-end e-commerce solution. www.dell.com Customer Experience

25. Personalization Web experiences customized based on total relationship with Dell www.dell.com Customer Experience

26. Personalization Shifts Online Experience FROM TO • Multiple / Independent sites • “For Everyone” • Store Metaphor • High Tech • Not-Sticky - Buy and Go • Personalization Only Available to Premier Accounts • Responsive / Passive • Site Changes Are Mass Segment Focused • Transactional Focus • Know Customer Only by What They Buy • High Touch • Site is Better For Me With Each Visit • Relationship Focus • Proactive - Makes “Smart” Offers • Personalized Service to Every Customer (Mass Customization) • Know Individual and Prospect According to Behavior • Community Metaphor • Market of One • Sticky - Return and Commit • Community of Interrelated Sites www.dell.com Customer Experience

27. End-to-end direct business, leveraging the internet