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Dell Simplifies Price Structure, Cutting Promos

Round Rock, Texas — Dell said it will begin to dramatically reduce the number of rebates, special discounts and other promotional offers on its PCs, peripherals and CE products to make its pricing more transparent and less confusing for customers.

Ro Parra, senior VP and general manager for Dell’s home and small business group, noted during a conference call that the company would regularly offer upwards of 50 promotions on a single product over a three-month period. “It was far too confusing” — for both consumers and Dell sales reps, he said — “and customers would wonder ‘How do I know the promotion I got today won’t be better tomorrow?’”

Dell plans to reduce the number of promotions tied to a single product by 80 percent over the next 12 to 18 months, beginning in August with a reduction of mail-in rebates.

The moves, which affect Inspiron notebooks, Dimension desktops, Dell TVs and other products and services for consumers and small businesses, will return Dell to its original model of everyday value pricing. Net pricing on products will remain largely unchanged, Para said, as the company reduces promotions and list prices in parallel.

Dell will also extend its now standard 90-day warranty to the company’s original one-year period, while expanding the scope of coverage. Parra acknowledged that reducing technical support for certain areas like operating systems “was a mistake.”

The changes are part of a previously announced effort by Dell to “regain its leadership position in customer experience,” the company said. The initiative includes a $100 million investment that will go toward hiring and retraining thousands of sales and support personnel, adding 10 new call centers in North America, deploying an online diagnostic tool to troubleshoot problems remotely, enhancing and improving product design.