Innovative Customer Service at EMC Corporation case study

In 1979, EMC was founded at Hopkinton, Massachusetts. Today, it is recognized as the world leader in customer service. Mike Ruettgers, after joining the EMC Group as Vice President (Operations and Customer Service), found that the company’s product performance failure was virtually leading the company to bankruptcy. Disk drive, one of their core product lines, was witnessing the biggest challenge as customers were up in their arms against accepting it, although the company enjoyed visible market reputation in product quality and customer services. The company’s business had witnessed a serious drop due to product unreliability. As a part of the comeback strategy, Mike decided to give options to consumers to receive a new EMC storage system, or take an IBM one but pay at

EMC rate (price band of IBM was higher). IBM is their biggest competitor. EMC customers understood that they are buying an IBM product at EMC price.

At EMC’s corporate level, this move of mike was criticized, but Mike was convinced that this was the only way to restore the customer’s confidence. Mike’s assumption was correct. EMC’s customers recognized such an extraordinary move and they took it as EMC’s commitment to its customers. The customers decided to continue with EMC. With Mike, EMC could turnaround. Technology companies, such as, CISCO Systems, Sun Microsystems, Oracle, and even others have reposed their confidence in EMC Data archival products.

The company is no filled with superb technologists who systematically phase out obsolete products and develop new ones to peg competition for others, and retain and expand their customer-base. This initiative of new product development further reinforced by the do-or-die sales culture, improved the company’s top-line, and helped it recover from a dead-lock situation. With 99 per cent customer retention, EMC could set an example for others to emulate. This was highly acclaimed by the corporate world and researchers. EMC is convinced that developing world class problem solvers does not require heroes; rather it requires team players to pool the collective wisdom and solve the problem on real-time basis. Customer service requires people to be in the field and understand the real-time needs of the customers. ‘Face the irate customers and dispel their apprehension’, that is the mantra of EMC. To bundle all these activities under the direct control of the top management, Mike centralized the customer and dispatch activities. To EMC, customer service runs like any other business unit; it is implanted in the company’s DNA; it is a continuous innovation.

Questions and Answers

1. Read the case and suggest as an organizational behavior professional, what type of managerial interventions can ease the problem of customer service in a competitive, technology-intensive market?

2. Related the TQM concept in this case with customer retention.

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