As of last week, Dell announced that it's going to cut back on mail-in rebates and make sale prices much more accessible to clients after complaints that the process for receiving the sale price was too complex.
Analysts believe this may help increase Dell’s customer relations but not necessarily its sales. Dell, the world’s largest personal computer maker said that item prices will stay the same.
Dell M6500. Dell Cuts Back On Mail-In Rebates. 150Dell’s sales have been down in recent quarters with tougher competition from their number 1 competitor Hewlett-Packard. Dell which sells directly to clients by way of the internet and via phone has had complaints of their poor after-sale performance. In the early 90’s Dell’s percentage growth was considerably higher and analysts wonder if Dell can once again reach these numbers.
An analyst with Cross Analysis says, "Dell is facing plenty of challenges. HP is just reinvigorated, which is one of their biggest troubles. Their competitor is back."
Dell shares ended down 68 cents, or 3 percent, at $21.70, extra than the Merrill Lynch Tech 100 index's (^MLO - news) 1.6 percent fall.
Dell M6500. Save hundreds on your next Dell buy - Incredible secrets revealed. 248 Dell anticipated a reduction of approximately 70 percent per product line inside the number of promotions for U.S. buyers and smaller businesses. Promotions connected to a single product line would decline by 80 percent.
Reductions will take affect inside the next 12 to 18 months, beginning with the Inspiron notebook computers and Dell monitors.
Moors and Cabot analyst Cindy Shaw said, “People hate rebates” and she believes this is really a positive move for Dell.
Some analysts thought Dell would introduce price cuts to contend with competitors Hewlett-Packard and Acer Inc. They continue to diminish Dell’s long-established cost advantage thanks to less expensive components and additional competent manufacturing.
In May, Dell publicized its plans to lower prices and is spending $100 million to strengthen customer service by hiring over 2,000 sales and support staff.
Dell’s senior vice president of residence and modest enterprise groups, Ro Parra stated the cutback in promotions will not affect the “net price” that clients pay but make the method of purchasing a computer less difficult.
Parra commented to reporters that consumers do not like rebates and only about 80 percent redeem them. He also said "They are problematic, and our intent would be to decrease them over time."
Dell M6500Dell as well as other retailers like Ideal Get Co are cutting back mail-in rebates. They are not considerably of an incentive to consumers mainly because they must fill out forms, send product codes and then wait many months to obtain a check.
Dell’s new focus on existing promotions is going to be paperless rebates which make analysts wonder if this may motivate buyers to take advantage of the offers.
Investigation analyst Cross stated "My greatest question is, what the monetary impact of this is? In case you don't get a great deal of hits on mail-in rebates, and now you are just going to go to instant rebates or cost cuts, then that hits everyone."
