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

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

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

Empower a Transformation Provide Executive Sponsorship to give authority Provide Executive Sponsorship to give authority Forget ROI at first, it will come later Build New Processes don’t just put old ones online Build New Processes don’t just put old ones online Create a Web Culture fast, focussed, fun

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

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

Millions of Dollars per Day 4/96 $0 $5 $10 $15 $20 $25 $30 4/974/984/99 Results to Date Dell.com Launched Premier Pages (Customized Extranet) Launched Premier Pages Introduced For Small Business Gigabuys.com Launched Premier Pages With Customer Specific Dynamic Pricing Michael Dell’s Challenge - 50% Online Revenue $1 $3 $4 $5 $6 $14 $ Premier Pages Online 3,000 Premier Pages Online Online Sales Reach 25% of Total Sales Dell On-Line Sales

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

5X Internet Will Be Your Business

Why? What? Customer Experience Velocity How? Efficiency

Velocity What? Velocity

Speed to Quality Fast Tech Velocity Fast Tech

Turning Our Business Inside Out Data/Common Services Role Specific Applications Manage the Business Applications Intranet applications, including: 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 Financial reporting Pay and Performance Mgmt. Benefits changes Corp. Director Value Chain B2B Commerce B2C Commerce Customer Care eSupport Premier Pages Intranet Internet Recruiting Share data and develop common applications to eliminate redundancy and ensure consistent experience Velocity

Efficiency How? Efficiency

INDUSTRY Resolution Without Onsite Dispatch 80% 27% Services Efficiency Efficiency Source: DataQuest, June 1998

Efficiency Dell OpenManage

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

Why? Customer Experience

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

Customer Experience Focus on Customer Experience Customer Focus Increased Market Share Brand Equity Customer Loyalty

Customer Experience Loyalty 100% 80% 60% 40% 20% Zone of Defection Zone of Indifference Zone of Affection “Terrorists” “Apostles” Very Dissatisfied Indifferent Very Satisfied Customer Conversion through Experience Source: The Service Profit Chain, 1997

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

Customer Experience Premier Pages SM Service Customized Extranet Sites E-Commerce Information Sharing Service and Support

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

Customer Experience Personalization Web experiences customized based on total relationship with Dell

Personalization Shifts Online Experience Customer Experience Transactional FocusRelationship Focus Multiple / Independent sitesCommunity of Interrelated Sites “For Everyone”Market of One Not-Sticky - Buy and GoSticky - Return and Commit High TechHigh Touch Store MetaphorCommunity Metaphor Know Customer Only by What They Buy Know Individual and Prospect According to Behavior Personalization Only Available to Premier Accounts Personalized Service to Every Customer (Mass Customization) Responsive / PassiveProactive - Makes “Smart” Offers Site Changes Are Mass Segment Focused Site is Better For Me With Each Visit FROM TO

End-to-end direct business, leveraging the internet