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Negotiate Your Dell Service Contract Extensions

November 27, 2008

The service contract for our three-year-old Dell PowerEdge SC430 server was to expire at the beginning of December. Ordinarily on a piece of hardware this old I would take the chance of a hardware failure, figuring that the PC wasn’t worth enough to service. This machine, however, runs our home installation of Small Business Server 2003, making a failure a bigger pain to deal with– and the promised next-day service of significant value. That was why I had extended the original one-year service agreement for an additional two years and why it would have been worth another $200 or so to extend the agreement for another year.

So when I received a solicitation in the mail to call to extend our service agreement that is just what I did. And was quoted a price of $400 for a one year extension.

My incredulity resulted in an offer to reduce that price to $360, which I indicated still wasn’t worth my while. I ended the call and started considering other options.

Later in the day I received another call from Dell offering me a two-year extension for $270. However, I only needed a one-year extension and $270 was still too much, so I declined. The sales rep then asked me how much I was willing to pay. "$150" I answered thinking if the countered with a higher price I still might accept a price under $200. She put me on hold for a few minutes and came back on offering me a price of $140 for a one-year extension. I accepted.

A little negotiation had resulted in a 70% price reduction. Of course I hadn’t realized when I first called that this was the beginning of a negotiation– but others reading this who find themselves in a similar situation can now recognize the process for what it is.


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