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July 13, 2006 9:32 AM PDT
Dell to slash rebates and promotions
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The company is trying to make it easier for consumers to understand what price they will pay every time they come to Dell, said Ro Parra, senior vice president of the home and small business group. Dell often used to offer brief promotions such as extra memory or a free flat-panel display that might not have remained available if a consumer took a day or two to make a purchasing decision.
The new strategy will have the effect of lowering the list price of Dell gear. But overall, consumers will wind up paying around the same price for the complete system they put together, Parra said.
"This is about transparency over time, and making sure we continue to deliver value on our list price," Parra said.
The changes will be implemented over the next 12 to 18 months, starting with Inspiron notebooks and digital televisions in August.
"Dell's promotional strategy was too confusing to customers," said Sam Bhavnani, an analyst at Current Analysis. "You never knew if the offer that was showing up on the screen in front of you was the best offer or if there was something better out there. Making the process simpler for the customer is definitely a step in the right direction."
Dell isn't ruling out the use of promotions and mail-in rebates in the future. The goal with Thursday's announcement is to reduce the use of promotions per product line by 70 percent and to reduce promotions tied to a single product by 80 percent, Parra said.
Rebates have long been popular with electronics retailers, because they allow for higher list prices and because many customers never bother filling out the forms. But the retail industry, led by Best Buy and OfficeMax, is moving away from rebates due to an increase in complaints about the process.
"Our intent is to dramatically reduce (rebates) over time," Parra said. But he stopped short of saying the company would eliminate rebates.
One problem in moving away from targeted rebates and special short-term promotions is Dell might find it harder to keep its supply chain lean, said Stephen Baker, an analyst at NPD Techworld. Dell is famous for squeezing as much efficiency out of its manufacturing process as possible. One way it keeps inventories low is by offering short-term promotions on products that are building in inventory, like memory chips or displays. "Rebating is a very hard drug to wean yourself off of," he said.
Dell's consumer products account for only 15 percent of the company's overall business. But it's a highly visible segment, and the company has been struggling of late to maintain its leading market share position. Customer service complaints at Dell have soared over the past few years, leading the company to invest $100 million in new support staff and to retrain existing employees.
The pricing strategy is part of a multipart campaign to improve the consumer business, starting with things like improved support, a redesigned Web page and a return to one-year standard warranties, Parra said.
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58 comments
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I have never been able to do it. I finally gave up.
This hocus pocus game that they play with pricing is whacko.
They advertise a desktop pc for $459 but when you select it, the price jumps up on the next screen to $659 and you cannot get it to go back down.
So you leave the site and come back in using another browser...same thing happens.
And if you are supposed to get a corporate or educational price reduction, shop carefully because you may find that you have to spend a ton of money in support packages to get any kind of discount at all.
And speaking of which, I've never had the honor but is there a lot of truth to the whole "call Dell tech support and wind up with an Indian call center that cannot help you" scenario that I've heard a lot about?
You select the desktop and go to customize it and they automatically fill you in with higher priced components that "they recommend" you buy.
Of course they recommend you buy the more expensive components. It's crummy...
I can't speak for their overseas technical support, but I've read similar stories about it.
Charles R. Whealton
Charles Whealton @ pleasedontspam.com
I am sure lot of the problems in dell customer service is because of
1) waiting to get hold of customer service rep.
2) Time taken by customer service rep to escalate it to next level of tech support and time taken to explain again to the tech support person.
One time I had an issue and it took me
1) 30 minutes to get the first customer service rep
2) Took 15 min to explain the problem and the issue was escalated to higher level of tech support.
3) Took 15 more min to explain the problem to the tech support engineer.
4) The new tech support engineer took 10 secs to figure out the problem and resolve the issue, by ordering a replacement component.
So for a 10 sec solution it took me almost an hr and this is what is bothering most people. It has nothing to do with call center being in India.
I have never been able to do it. I finally gave up.
This hocus pocus game that they play with pricing is whacko.
They advertise a desktop pc for $459 but when you select it, the price jumps up on the next screen to $659 and you cannot get it to go back down.
So you leave the site and come back in using another browser...same thing happens.
And if you are supposed to get a corporate or educational price reduction, shop carefully because you may find that you have to spend a ton of money in support packages to get any kind of discount at all.
And speaking of which, I've never had the honor but is there a lot of truth to the whole "call Dell tech support and wind up with an Indian call center that cannot help you" scenario that I've heard a lot about?
You select the desktop and go to customize it and they automatically fill you in with higher priced components that "they recommend" you buy.
Of course they recommend you buy the more expensive components. It's crummy...
I can't speak for their overseas technical support, but I've read similar stories about it.
Charles R. Whealton
Charles Whealton @ pleasedontspam.com
I am sure lot of the problems in dell customer service is because of
1) waiting to get hold of customer service rep.
2) Time taken by customer service rep to escalate it to next level of tech support and time taken to explain again to the tech support person.
One time I had an issue and it took me
1) 30 minutes to get the first customer service rep
2) Took 15 min to explain the problem and the issue was escalated to higher level of tech support.
3) Took 15 more min to explain the problem to the tech support engineer.
4) The new tech support engineer took 10 secs to figure out the problem and resolve the issue, by ordering a replacement component.
So for a 10 sec solution it took me almost an hr and this is what is bothering most people. It has nothing to do with call center being in India.
I look forward to the day when a price quote from Dell will be good for more than one day or in some cases one hour.
I look forward to the day when a price quote from Dell will be good for more than one day or in some cases one hour.
Talk about a lightning fast response to market conditions. -lol
Price changes aren't going to fix Dell's multiple service problems, etc.
Talk about a lightning fast response to market conditions. -lol
Price changes aren't going to fix Dell's multiple service problems, etc.
Contrary to what most people say about Dell, my experiences have always been good. I've only ever had one problem: the HD on my wife's low-end machine died (it was a refurb model I got cheap). I called Dell and they sent out a tech in a day or two and replaced it under warranty,
I like their website for ordering. At least I can see what some of my options are. Sure their prices change frequently, but I'm not concerned over $50-100 here or there. Dell, after all, sells computers cheap.
I know everyone's experience is different, but so far I am very satisfied with Dell in every way.
Contrary to what most people say about Dell, my experiences have always been good. I've only ever had one problem: the HD on my wife's low-end machine died (it was a refurb model I got cheap). I called Dell and they sent out a tech in a day or two and replaced it under warranty,
I like their website for ordering. At least I can see what some of my options are. Sure their prices change frequently, but I'm not concerned over $50-100 here or there. Dell, after all, sells computers cheap.
I know everyone's experience is different, but so far I am very satisfied with Dell in every way.
JMO
JMO
Offering AMD did nothing for Dell but make their manufacting line more complicated.
Some companies in manufacturing buy a tonne of Dells because they are cheap, and being a software engineer, there are processor differences when coding in Assembly, etc. Instruction sets can vary between processors, and Intel is fairly popular in industry for these sorts of things.
Intel will do them fine so long as they keep everyone ordering very similar systems so they can bang out system after system of the same build. You look at the price difference between an AMD or a Pentium at a retail store, and sure the price is different, however the price isn't so drastic when you purchase the quantities they are buying. It's not a matter of hardware so much as it's a matter of pleasing the customer. Computers are dirt cheap now, even if it's an expensive computer, it's still cheap for what you're getting. As many have already voiced on here, they need to keep people happy. Make getting the advertised price straight forward, and make getting support less frustrating.
start ordering them back at the end of May. Now it's
almost two months later and according to posters on
Dell's message boards they still aren't shipping and
Dell won't even say why.
Offering AMD did nothing for Dell but make their manufacting line more complicated.
Some companies in manufacturing buy a tonne of Dells because they are cheap, and being a software engineer, there are processor differences when coding in Assembly, etc. Instruction sets can vary between processors, and Intel is fairly popular in industry for these sorts of things.
Intel will do them fine so long as they keep everyone ordering very similar systems so they can bang out system after system of the same build. You look at the price difference between an AMD or a Pentium at a retail store, and sure the price is different, however the price isn't so drastic when you purchase the quantities they are buying. It's not a matter of hardware so much as it's a matter of pleasing the customer. Computers are dirt cheap now, even if it's an expensive computer, it's still cheap for what you're getting. As many have already voiced on here, they need to keep people happy. Make getting the advertised price straight forward, and make getting support less frustrating.
start ordering them back at the end of May. Now it's
almost two months later and according to posters on
Dell's message boards they still aren't shipping and
Dell won't even say why.