Dell customer service gets threatened with Blogosphere and Digg retaliation
So I’m looking to purchase a desktop that has around 1TB storage capacity, high end ram, good video card, and a 30 inch monitor. Last time I purchased a Dell things didn’t go so smoothly. So I configure the package online at Dell and it prices out to be around $3200 and the telephone sales agent manages to get the price reduced to just below $3000. I refuse to purchase the computer from both the female sales agent, and male manager because they won’t lower the price by $100 for me. Is this a good policy or a bad policy that Dell won’t negotiate with their customers? Are there no exceptions; especially after being threatened with blogosphere retaliation and being featured on Digg!? Well this is somewhat of a comical post - but enjoy the video and let me know what you think of Dell. The following are my hypotheses on why Dell refused to lower their price after a lot of verbal abuse and counter-offers on the phone:Dell profit margins are so slim that they are unable to negotiate prices because they know exactly how much they make on the deal before the deal is made. Therefore, all sales prices are reversely capt as that $100 would have pushed them into “Undesired Profit Territory”. “Undesired Profit Territory” is a concept that I recently conceived when thinking about the psychological make-up of multi-million dollar corporations. Dell has strict policies about selling below certain price points in all circumstances. Dell is not in business to make just a few dollars on every transaction, they want to make at least $100, $200, or $300 on every transaction; they know what their historical and future Revenue Per Action is. They know exactly how much they make on average for every point of sale. That profit amount with Dell is 4.82% of every transaction. So if they were to sell me $100 worth of goods, they would make $4.82 cents . On my $3000 purchase they would have made (30x$4.82) $144.60. I was asking them to go down another $100; thus leaving them at only $44.60 worth of profit. Therefore, Dell’s “Undesired Profit Territory” is anything less that $144.60 for every transaction. In other words any transaction that results in a profit less than 4.82%
In corporations just as in American government, there are only a hand few of key employees that have ultimate and undisputed power. Corporate CEO’s that control a majority of the outstanding shares are kings of international Power organizations. Michael Dell (who owns over 216 million shares worth over 4 billion 600 million dollars) and his accountants, as well as a few key upper level managers are the only ones that know of “charges” that appear on the books - therefore, they can basically purchase whatever they want as long as they control the company, it’s actually their company, and other large, though minority shareholders, very rarely say anything about exec level extravagances so long as they aren’t leveraged or down a tremendous amount as is. In other words, at super huge corporations, minority shareholders can go fuck themselves, no one knows whats going on but the majority owners; and believe me they got it going on.
Normally 9-5′rs have absolutely no concept of what it means to have a billion dollars or more; the only people who can conceive what its like to be a billionaire are those who are either close, have it, or day-dream about it at end. It’s actually hard to realize what it’s like to be a billionaire and purchase basically anything you want. Now think about people that have more then a billion, like 20 billion dollars, or 80 billion dollars. Instead of thinking about purchasing homes; you think about buildings, oil tankers, anywhere you can put huge amounts of money and receive a good rate of return on that amount. The stock market ultimately becomes your super market and you have to purchase items that can retain their value and grow at least 5% a year; not rotten tomatoes.
Tags: Billionaires, blogosphere, Corporations, Dell, dell customer service, digg effect, michael dell, power, Profit Margins, rich
