July 13, 2006 9:32 AM PDT

Dell to slash rebates and promotions

Dell announced Thursday several changes to its pricing strategy for consumers that drastically reduce the use of mail-in rebates and short-term promotions.

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.

See more CNET content tagged:
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58 comments

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How about just accurate pricing?
Have you ever tried to get one of their products at the advertised price?

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?
Posted by jachamp (84 comments )
Reply Link Flag
Re: How about just accurate pricing
I've gone to another "direct to consumer" PC company and seen the same thing.

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
Posted by chuck_whealton (521 comments )
Link Flag
Always had good experience with call center customer service
I always had good dell customer service. I am computer savvy and so I would understand easily what the customer service technician is trying to do.

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.
Posted by Tanjore (322 comments )
Link Flag
Tech support
The tech support is horrible. They really don't try and fix your problem, they want to sell you the on call service. I love the Indian folks who go by fake American names to try and fool people. Dell should bring these jobs back here and fill them with competent people.
Posted by bkornicke (2 comments )
Link Flag
How about just accurate pricing?
Have you ever tried to get one of their products at the advertised price?

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?
Posted by jachamp (84 comments )
Reply Link Flag
Re: How about just accurate pricing
I've gone to another "direct to consumer" PC company and seen the same thing.

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
Posted by chuck_whealton (521 comments )
Link Flag
Always had good experience with call center customer service
I always had good dell customer service. I am computer savvy and so I would understand easily what the customer service technician is trying to do.

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.
Posted by Tanjore (322 comments )
Link Flag
Tech support
The tech support is horrible. They really don't try and fix your problem, they want to sell you the on call service. I love the Indian folks who go by fake American names to try and fool people. Dell should bring these jobs back here and fill them with competent people.
Posted by bkornicke (2 comments )
Link Flag
Finally
Ordering from Dell has always been such a hassle. First you get the price on the website. But then the hunt really begins. Rather than using their advertised price, start looking over all the coupon sites to see if you can find a better coupon that will drive the price down. I usually end up either saving $100-$200 using a coupon or getting $200 worth of upgrades because of one. Now, what's wrong with this? In some respects nothing really, except buying anything from them becomes a hassle as the coupons expire daily. Also, this scheme makes it seem like I'm buying something from a used car lot as everyone gets a different price depending on how well you're "in" with the bargaining secrets. In Dell's case, rather than using negotiating tactics to get the price down, you have to use their endless secret coupons.

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.
Posted by sanenazok (3449 comments )
Reply Link Flag
Finally
Ordering from Dell has always been such a hassle. First you get the price on the website. But then the hunt really begins. Rather than using their advertised price, start looking over all the coupon sites to see if you can find a better coupon that will drive the price down. I usually end up either saving $100-$200 using a coupon or getting $200 worth of upgrades because of one. Now, what's wrong with this? In some respects nothing really, except buying anything from them becomes a hassle as the coupons expire daily. Also, this scheme makes it seem like I'm buying something from a used car lot as everyone gets a different price depending on how well you're "in" with the bargaining secrets. In Dell's case, rather than using negotiating tactics to get the price down, you have to use their endless secret coupons.

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.
Posted by sanenazok (3449 comments )
Reply Link Flag
Smart Move
If they "cut" their prices, more consumers will be enticed to buy them; its like 99.99 compared to 1.00; it looks better.
Posted by ~Canuck~ (71 comments )
Reply Link Flag
Smart Move
If they "cut" their prices, more consumers will be enticed to buy them; its like 99.99 compared to 1.00; it looks better.
Posted by ~Canuck~ (71 comments )
Reply Link Flag
12 to 18 Months?
>The changes will be implemented over the next 12 to 18 months,...<

Talk about a lightning fast response to market conditions. -lol

Price changes aren't going to fix Dell's multiple service problems, etc.
Posted by john55440 (1020 comments )
Reply Link Flag
12 to 18 Months?
>The changes will be implemented over the next 12 to 18 months,...<

Talk about a lightning fast response to market conditions. -lol

Price changes aren't going to fix Dell's multiple service problems, etc.
Posted by john55440 (1020 comments )
Reply Link Flag
I have ALL Dell machines
I have three computers (desktop, laptop, wife's desktop) plus one that I bought for my Mom that are all Dell machines.

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.
Posted by JerzeyRich (17 comments )
Reply Link Flag
Dell isn't cheap & their shipping is expensive
Dell isn't cheap and their shipping is expensive. Dell uses more expensive Intel chips and a Dell budget computer is an oxymoron. I buy HP computers with AMD Athlon processors. I don't have to pay $75 in shipping for it from Best Buy either.
Posted by lingsun (482 comments )
Link Flag
I have ALL Dell machines
I have three computers (desktop, laptop, wife's desktop) plus one that I bought for my Mom that are all Dell machines.

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.
Posted by JerzeyRich (17 comments )
Reply Link Flag
Dell isn't cheap & their shipping is expensive
Dell isn't cheap and their shipping is expensive. Dell uses more expensive Intel chips and a Dell budget computer is an oxymoron. I buy HP computers with AMD Athlon processors. I don't have to pay $75 in shipping for it from Best Buy either.
Posted by lingsun (482 comments )
Link Flag
business stand point
I have worked in the industry for over ten years now and I see more Dells in for repair than any other model, yes I know they sell more, but that's not my point. I have people coming to me and paying me to due their warranty work because they can't get through to Dell Support or get the run around doing it. Personally I have one I bought off the internet, didn't pay much for it, and don't expect much out of it. If your going to buy a system maybe try and spend more than five or six hundred for one.

JMO
Posted by agdude (2 comments )
Reply Link Flag
business stand point
I have worked in the industry for over ten years now and I see more Dells in for repair than any other model, yes I know they sell more, but that's not my point. I have people coming to me and paying me to due their warranty work because they can't get through to Dell Support or get the run around doing it. Personally I have one I bought off the internet, didn't pay much for it, and don't expect much out of it. If your going to buy a system maybe try and spend more than five or six hundred for one.

JMO
Posted by agdude (2 comments )
Reply Link Flag
Guess they'll have to cut ad spending at CNET
The wasted ad money they spend at this "news" site will pay for the cutbacks. Better off since CNET is finished.
Posted by (156 comments )
Reply Link Flag
Guess they'll have to cut ad spending at CNET
The wasted ad money they spend at this "news" site will pay for the cutbacks. Better off since CNET is finished.
Posted by (156 comments )
Reply Link Flag
Dell is going to lose market share until they use AMD processors
Dell is going to lose market share until they use AMD processors. HP uses AMD Athlon processors in some product lines and they have much more bang for the buck than Dell computers running Pentium 4s.
Posted by lingsun (482 comments )
Reply Link Flag
until TODAY
The conroe reviews are all over the internet today......no one will want an AMD CPU that cost more, runs slower and is hotter.

Offering AMD did nothing for Dell but make their manufacting line more complicated.
Posted by Lindy01 (443 comments )
Link Flag
Only For Small Time Buyers Though
I can complain because I have dealt with Dell on a home PC level as well, but changing to AMD might not be a benefit for them, unless they offer both (which then they are reducing purchasing volume.

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.
Posted by Brandon Bartelds (42 comments )
Link Flag
they also need to cut out the vaporware
The XPS 700 sounded so good that people decided to
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.
Posted by Jackson Cracker (272 comments )
Link Flag
Dell is going to lose market share until they use AMD processors
Dell is going to lose market share until they use AMD processors. HP uses AMD Athlon processors in some product lines and they have much more bang for the buck than Dell computers running Pentium 4s.
Posted by lingsun (482 comments )
Reply Link Flag
until TODAY
The conroe reviews are all over the internet today......no one will want an AMD CPU that cost more, runs slower and is hotter.

Offering AMD did nothing for Dell but make their manufacting line more complicated.
Posted by Lindy01 (443 comments )
Link Flag
Only For Small Time Buyers Though
I can complain because I have dealt with Dell on a home PC level as well, but changing to AMD might not be a benefit for them, unless they offer both (which then they are reducing purchasing volume.

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.
Posted by Brandon Bartelds (42 comments )
Link Flag
they also need to cut out the vaporware
The XPS 700 sounded so good that people decided to
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.
Posted by Jackson Cracker (272 comments )
Link Flag
So how much did Dell pay for this article?
How much money did they pay for another fluff piece by these CNET "journalists?"
Posted by (156 comments )
Reply Link Flag
So how much did Dell pay for this article?
How much money did they pay for another fluff piece by these CNET "journalists?"
Posted by (156 comments )
Reply Link Flag
How about ENGLISH speaking support
Dell needs to move support BACK to USA
Posted by ErvServer (25 comments )
Reply Link Flag
How about ENGLISH speaking support
Dell needs to move support BACK to USA
Posted by ErvServer (25 comments )
Reply Link Flag
English speaking support reps
several times I've talked to people I couldn't even understand, DELL needs to move support BACK to USA
Posted by ErvServer (25 comments )
Reply Link Flag
I agree with USA tech's
AMEN.
Posted by pdonket (2 comments )
Link Flag
It's called GOLD SUPPORT
Dell does offer a better support center based in Austin TX. It's their Gold Support option. If you want to pay more for support to get that US resident support center, then go for it. I don't care where I call as long as I can get my hardware replaced.
Posted by ajlane83 (5 comments )
Link Flag
English speaking support reps
several times I've talked to people I couldn't even understand, DELL needs to move support BACK to USA
Posted by ErvServer (25 comments )
Reply Link Flag
I agree with USA tech's
AMEN.
Posted by pdonket (2 comments )
Link Flag
It's called GOLD SUPPORT
Dell does offer a better support center based in Austin TX. It's their Gold Support option. If you want to pay more for support to get that US resident support center, then go for it. I don't care where I call as long as I can get my hardware replaced.
Posted by ajlane83 (5 comments )
Link Flag
While they're at it..
It wouldn't hurt to get some of that trialware crap off their new pristine installations. I had to practically wipe the hard drive of my new Dell laptop. I complained to their support but I think it fell on Indian ears.
Posted by GrandpaN1947 (187 comments )
Reply Link Flag
While they're at it..
It wouldn't hurt to get some of that trialware crap off their new pristine installations. I had to practically wipe the hard drive of my new Dell laptop. I complained to their support but I think it fell on Indian ears.
Posted by GrandpaN1947 (187 comments )
Reply Link Flag
Cheaper Laptops
Just found this resource on Cheaper Laptops. <a class="jive-link-external" href="http://www.glass.in/result.php?Keywords=Cheaper+Laptops" target="_newWindow">http://www.glass.in/result.php?Keywords=Cheaper+Laptops</a> If you are seriosuly looking for one, then go ahead and let me know if it helps.
Posted by 206538395198018178908092208948 (141 comments )
Reply Link Flag
 

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