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The Dell Swarm

Dell is exploiting social networks in a new marketing scheme being tried out in Singapore. If you agree to buy a laptop on Dell Swarm, the discounted price drops as others join your “swarm” and also buy. Here’s how Dell describes it:

  • Start by picking the laptop you would like to purchase. Be the first buyer to join a Swarm and you’ll enjoy a price lower than Dell.com’s best discounted price (after cash rebates).
  • Join a Swarm after, and you’ll enjoy a new, lower price – as will all previous buyers. To see the range of prices, simply slide the Swarm price bar downwards.
  • Once the swarms closes – which is when the limit of 15 buyers or 72 hours is reached, whichever is the earlier, the price is then finalised. This final, lowest price now becomes everyone’s purchase price – including yours!
  • To get the maximum discount, grow the Swarm by Sharing with your friends. You can share via Twitter Or post a note on your Facebook® profile and tell all of your friends Point others towards your Swarm using Digg, del.icio.us and other tools. Or simply send your friends an email directly!
  • Not ready to buy yet? You can also choose to Follow the Swarm. You’ll then receive updates via email. As well as through free SMS alerts.

We’ve seen this idea on the Web before (e.g., see Group Buying), but it is usually framed as a tool by and for consumers rather than a marketing strategy employed by vendors. This could be a big win for Dell. If it is, others will follow. The penetration of online social networking systems is much greater now and finding ways to exploit them for marketing is irresistible.

From UMBC Equity

2 Responses

  1. By Nick W on May 28th, 2009 at 5:25 am

    Some real innovation there!
    Potential for some real disruption in distribution if they expand the scope of “swarming” across geographies – ie beyond Singapore. Fascinating to watch!

  2. By viv on June 3rd, 2009 at 12:36 am

    Fascinating indeed.

    I really appreciate the fact that Dell are ‘having a go’, to me…not trying these things: is failure.

    However, I’m interested to see what pressure this creates on the expectation of price. Once a price has be transacted (publically), then by nature, that becomes the market price. Vendors can justify the value of bulk purchase, and swarming etc…but my experience has shown that the ‘will’ ask for the price that the saw, and won’t care about the process of the swarm.
    For example, a customer calls in and says that I want to pay $X for the product as that is what I saw on your website – would they really say “no, go away and generate your own swarm”?

    I see public degration of the price point, if the price is still good, they make money and win market share…nice move.

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