Last week I received an email from my Dell representative's sales manager. It was five paragraphs, and started out great: "
"Many of our customers have told us that, in the wake of this financial crisis, their IT budgets have been reduced, and that their finance organizations are requiring several competitive bids for every purchase. Let us help you get the most out of your end-of-year budgets."
If he had stopped there it would have been good for him, for the rep, for Dell and for me. But he didn't. He kept going and wrecked everything! He wrote:
"Our 'refuse-to-lose' commitment to you is to lead with the best pricing we can offer, taking into account your company's total spend with Dell. We promise to work hard to get you the best value for your company at the best price available. Our goal is to BEAT every competitive bid you send us. We're still in search of a bid that we can't beat!"
Again, if he stopped at "best value for your company" he would have been fine but no, he also went so far to offer the "best price available". Even that wouldn't have been fatal - Dell's best price, as opposed to the best price on the planet - but he finished with "beat every competitive bid".
I'm having a difficult time believing that this is Dell's new strategy. If it is, it is surely a sign of the times. It's much easier for me to believe that this is the manager's strategy. Either way, if you don't have any money, best price, lowest price, lower than that price is still something that you can't afford to pay for. If you do have the money, and you were going to purchase technology before the year ended, Dell would have probably earned this business anyway (this went to loyal Dell customers) at their regular prices.
If you sell by undercutting, you erode your value, modify your market position, change what your brand stands for and turn the market into an even more price sensitive, commodity driven horror show.
What do you think?