You may have heard the following key facts about rebates before, but what do they have to do with leveraging your data to drive revenue growth with rebates? In this blog post, we summarize the essence of a webinar on how to achieve this goal by improving how you manage rebates. Read on to get the majority of value crammed into a 52-minute presentation in one brief article.

• According to Bessemer Venture Partners, the supply chain and logistics industry is a nearly 10 trillion market, representing more than 10% of global GDP today.
• It's also growing at around 500 billion each year.
• Gartner and Forrester suggest 75% of sales may be through partners, but actually, more than 90% of sales are partner assisted.

That was the starting point of a conversation between Zoe Cooke, Senior Account Executive at Enable, and Bob Gay, Rebate and Incentive Program Specialist at Advance Auto Parts (AAP).

Zoe helps distributors, manufacturers, and buying groups find the right way to manage complex deals and speaks authoritatively about the Deal Economy and how to rethink rebates and supplier deals to help both sides of trading relationships.

Bob is an expert in using rebates to identify market trends and exploit new business opportunities. His history of growing revenues through sales, program creation, operations improvement, and intensive business development makes him an expert on leveraging data to drive revenue growth with rebates.

Together, their conversation in this webinar reveals how you can leverage your rebate data to drive revenue growth.

Optimizing all revenue streams

It’s definitely the right time to re-evaluate rebates as a strategic business tool to attain revenue growth, according to Zoe. But that’s only possible if rebates are manageable, visible, trusted, and productive. They can’t be seen as an add-on, a nice-to-have, or a giveaway to sweeten a sour or distrustful sales relationship.

Bob agrees. He knows the key to successful deals is not creating them but managing them effectively. To avoid them becoming completely unwieldy, he knew they needed to develop, implement, and follow through with a solid strategy.

Initially, he joined his company, AAP, because they were looking for someone to help with rebates while projecting them into the future – using incentives, promos, and rebates effectively. He knew using automation was key to achieving his strategic goals. But he also needed a tool to do more than merely help him wrangle rebates. It had to provide full interaction and transparency to set the stage for profitable growth from both sides.

“I was really hired to set the stage with wrangling rebates, knowing what we're doing, creating a definitive ROI, but it really resulted in taking that extra step with not only looking at ROI but making sure that we serve both our internal and external customers.”

– Bob Gay, Rebate and Incentive Program Specialist at Advance Auto Parts (AAP)

What you need to consider to maximize profits

Zoe has observed that forward-thinking companies are realizing how effective rebate management has positively impacts the bottom line. The benefits of good rebate management include: Having mutually-profitable trading relationships, finding an additional revenue stream, discovering missed deal earnings, or avoiding overpayments (depending on your perspective).

But she points out that it’s necessary to have control and visibility to see what’s going on, make improvements, and execute deal management swiftly. “Inaccurate reports, and even accurate reports should not be what’s holding you back,” she says. “Your reports need to be easily accessible, accurate, and able to provide insight.” If you can’t see what’s performing well or badly, you may be leaving opportunities on the table.

That’s why Bob is focusing on these data points to maximize profits. He says you should consider:

• Where the funds are coming from
• Where they’re being managed
• Where they’re going to.

Bob warns us that pass-through rebates (or prebates) become very complex, very quickly. Without a sound system to manage them, you get bad data in, which leads to bad data coming out.

Obviously, Bob reminds us, you should be tracking every vendor’s sales, promotions, and income long before you pay rebates out to a customer: Dollars in, dollars out, and percentage of rebates or units. But he cautions: It becomes incredibly difficult to manage without a system. “When you start to run multiple promos with multiple vendors, they’re never going to start at the same time, have the same terms, conditions, percentages, units, and products. It becomes quite unwieldy.”

What other complexities is Bob using Enable to manage? They include:

• Paying out accurately and on time
• Avoiding both underpayment and overpayment
• Ensuring industries that operate in the red for most of the year get rebates which put them into the black in the third or fourth quarter of the year.

It would not be possible for him to manage his company’s complex rebates and incentives without a proper system.

“Depending on your creativity, it [the rebate program] becomes more and more difficult to manage, especially if you're even somewhat attempting to do it with an Excel spreadsheet.

Your ultimate incentive is to have that ROI with purchases from your customer… It’s in their best interest. It's in your best interest. And it becomes a mutually acceptable way of doing business.

But the key part behind that is visibility and accuracy.”

– Bob Gay, Rebate and Incentive Program Specialist at Advance Auto Parts (AAP)

ERP solutions vs. rebate management software

There’s an omnipresent question regarding rebates: Is it better to manage them through an Enterprise Resource Planning solution (ERP) or a specialized piece of software? Bob explains why he decided to go with Enable’s specialized rebate management solution in the end.

Initially, he needed to choose whether to build a solution in house – with all the complexity, time, and cost required – or to buy a solution with the full capability they were looking for. He immediately discarded the possibility of using spreadsheets. “There's a lot of creative salespeople out there. And there's a lot of programs that you can implement that you simply cannot manage in an Excel system or on an Excel spreadsheet. It's just simply not accurate or auditable.” Then, he thought an ERP might be the solution.

Bob explains he wanted to manage rebates within a system, “And keep track of it, have visibility of it. And ultimately, at the end of the day, show our customers the reason that they're doing business with us. Because a promo doesn't do any good if they don't have the visibility to it and have buy-in.”

However, he soon discovered they were simply not up to the task.

Unfortunately, in his experience, the complexity of AAP’s rebates simply exceeded an ERP’s ability. “It became impossible [to use an ERP] because you're asking an ERP to manage not only just the funds, which of course they're set up to do, but you're asking them to manage customers, your entire product hierarchy. And the capability was simply not there.”

According to what he read, ERP failures range between 45% to 65% or, in some industries, upwards of 85%. For AAP, this risk was simply too great.

The alternative was a specialized system that deals with rebates, promos, and programs all day long and understands the complex relationships between trading partners: From manufacturers, through various iterations of wholesalers and franchisees, to DIY and in-use customers.

He needed it to handle customized deals, have a central repository of contracts and agreements, and manage the audit trail. Critically, he knew the system must be able to ensure good data went in so that good data could come out again, calculations could be made automatically, and deal success and profitability could be forecast effectively.

“We very, very quickly found out that none of the primary ERP systems that we were looking at could handle our complexity of programs…

Bottom line, when it came to ERPs, the granularity simply wasn't there. So if the granularity wasn't there, the modelling to see what programs would work in certain situations was also not there.”

– Bob Gay, Rebate and Incentive Program Specialist at Advance Auto Parts (AAP)

Lastly, he knew it would be much quicker to put a specialized system in than wait for an ERP. Zoe explains that Enable’s implementation typically takes 8-10 weeks to go live. “But you can actually pretty much immediately start working with the platform. You can start creating deals within about two weeks, and get that immediate impact on tracking.”

“It almost goes without saying that you can implement a rebate management system quicker than you can in ERP.

With the absolute known functionality of a rebate management system and how quickly it can be implemented, you almost can't afford not to implement it, because you're either wasting the ability of the system or waiting on an ERP for less capability.”

– Bob Gay, Rebate and Incentive Program Specialist at Advance Auto Parts (AAP)

What else did the webinar contain?

We hope you found value from this webinar summary, but this blog post is only the tip of the iceberg – covering the webinar’s first 30 minutes or so.

Discover more about Bob’s incredible depth of knowledge about rebates and incentives by watching the entire webinar.

You’ll also hear the audience members’ questions – including what ‘clear’ data is and how you get there. And you’ll hear about how to create a partnership with your vendor, the importance of having visibility for trading partners, and the recommendations Zoe shared to keep up with the ever-evolving rebate management landscape.

And if you’re ready to leverage data to drive revenue growth Bob’s rebate management system, Enable, get in touch or start your free trial now.

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