Okay that makes sense.
Inside the brackets I end up with the scalar xd()/dx + yd()/dy + zd()/dz. Then the right side vector acted on this left-side scalar and gave me x(1/r,0,0) + y(0,1/r,0) + z(0,0,1/r) = (x,y,z)/r. Lastly there was the 1/r from the start on the left side giving me (x,y,z)/r^2...