Better together: how customers benefit from collaborative partnerships
In the past, manufacturers and distributors didn’t trust each other. They co-existed in a relationship of convenience simply because of the financial benefits of collaboration. But, today, both parties are increasingly realizing that collaborative partnerships benefits both the customer, and the bottom line.
Why is there a lack of trust and collaboration between trading partners?
In the past, a lot of secrecy surrounded deals. Manufacturers believed distributors lacked commitment to the product and promotional programmes, as well as lacking sales and marketing skills. They felt frustrated by their inability to speak directly to customers.
On the other side, distributors believed manufacturers couldn’t manage territories effectively and lacked clearly-defined goals or plans to help achieve their goals. They felt unsupported. They feared manufacturers would dump them with little notice – negating their investment and effort in marketing.
With this lack of trust, collaborative partnerships suffered.
As a result, until recently, the combination of complex deals, admin challenges, technology constraints, and poor communication resulted in a lack of clarity, disorganized deal information, and a lack of visibility. It’s not surprising that 4% of potential rebate revenue typically went unclaimed.
The tide has turned: Adversarial relationships are turning into true partnerships
Today, however, we live in an era of customer-centricity. This focus on providing value to customers has forced both parties to see the benefits of collaborative partnerships, instead of settling for transactional or even adversarial relationships.
What enabled this sea change? The realization that companies are no longer competing as individual businesses anymore, they’re now competing at the supply chain level, too. In an article in Retail Week, Precima Director, Martin Black, says, “Trading partners need to work together for the benefit of the shopper if they want profitable sales to grow”.
As a result, trading partners are not only sharing more information – when they have the tools available to do so – they’re sharing broader goals and objectives. Retailers are looking ahead and expect their suppliers to support them, and when retailers communicate their expectations, share plans, and gather insights based on common information, beautiful things happen.
Perceptions of collaboration have changed
It’s hardly surprising, therefore, that perceptions of collaboration are changing for the better. According to research by Precima released in June 2020, 92% of retailers and 85% of suppliers say collaboration has improved. Unfortunately, only 62% of retailers say they are satisfied or very satisfied that suppliers deliver what they promise. Only 59% believe their suppliers have a vision for the future. And while 58% of suppliers believe their retailers should understand their business priorities, there is only a 46% satisfaction rating in this area.
The research concludes that “Adopting a common platform for improved collaboration with one version of the truth is the key to shopper-centricity”.
It’s time to make information sharing easier. The key to unlocking access to data – and the insights it reveals – is ensuring everyone is using a simple, effective tool to collaborate.
What are the benefits of collaborative partnerships?
Research by McKinsey confirms what any pro-collaboration participant in the supply chain knows in their gut, “When buyers and suppliers are willing and able to cooperate, they can often find ways to unlock significant new sources of value that benefit them both”.
The benefits of general supply chain collaboration include shorter lead times, lower out-of-stock levels, improved customer service metrics, lower transportation and warehousing costs, risk mitigation, improved forecasting, planning and capacity management, and even innovative new product development.
Collaborative partnerships start with open communication and improved visibility into customer demand and supplier performance. It results in lower costs, shared best practices, better-negotiated deals, competitive advantage, and, ultimately, increased revenue and profit for both parties.
As a McKinsey survey of more than 100 large organizations in multiple sectors concludes, “companies that regularly collaborated with suppliers demonstrated higher growth, lower operating costs, and greater profitability than their industry peers”.
Why trading partners need to partner more closely than ever before to win, serve and retain customers
In today’s disruption-prone business landscape trading partners need to collaborate to help win customers’ attention and retain their loyalty thanks to increased competition from multiple channels, complex products, an ever-expanding range of consumer needs, and fierce competition for materials and components.
But being able to meet shoppers’ needs and their expectations of product availability and quick delivery requires accurate demand forecasting, capacity planning, supplier quality management, and order fulfillment based on the clear visibility of underlying data. When retailers and distributors can use consumer data to respond rapidly to changing market conditions, predict shifts in demand, and track other changes in consumer behavior, they can work with producers to orient supply chains around these insights.
As our CEO, Andrew Butt, reminds us in an article in SCMR, “Effective supply chains are built on healthy relationships”. The good news is that both manufacturers and distributors have more digital tools to forge and maintain these collaborative partnerships than ever before.
How Enable helps to streamline collaboration
When it’s time to maximize the performance of B2B deals, while improving financial transparency and operational efficiency, SaaS-based collaboration tools can help. Rebate management software like Enable allows trading partners to share key information, manage, and align, complex incentive programs and rebate agreements, review, negotiate, agree, and even update any trading partner agreements. And once the deal is signed, users can then track and calculate sales and purchases, compare them against agreements, receive alerts when thresholds are about to be met, and so much more.
When sales data and processes are shared between partners and built on a stable, solid foundation, joint collaboration happens. Agreements are recorded in a standardized way, clarity is improved, business activity forecasts are more accurate, and rebate sign-off is simpler. This results in new, collaborative partnerships based on honesty, clarity, and shared goals, and leads to mutually-beneficial growth and profitability.
The key to long, successful collaborative partnerships starts with an intelligent business plan and is sustained by the use of intelligent software. When partners develop and pursue shared goals, make communication and collaboration top priorities, and streamline strategic planning, the only element remaining is making sure that planning, agreeing and rewarding rebates is seamless. That’s where rebate management software comes in.
Deal collaboration is a no-brainer
At Enable, our vision is to support and enhance a thriving ecosystem of manufacturers and distributors, working together to give maximum service, value, and choice to customers. We do this by enabling trusted trading relationships to serve customers better together with rebate management software that helps trading partners create, execute, track, and collaborate on trading programs.
We know that when all parties in the supply chain work together for the benefit of the customer, everyone benefits. That’s why, today, companies and vendors need to partner more closely than ever before to win, serve and retain customers. Trading partners involved in collaborative partnerships will be the winners.
How to enhance collaborative partnerships to boost rebate effectiveness
With Enable’s supplier collaboration portal, Collaborator, you can easily and securely share deals with trading partners, giving you the ability to work together to boost your rebate earnings, while building collaborative partnerships to serve customers better together.
So if you’re looking for rebate management software that helps distributors, buying groups and manufacturers take full control of rebates & B2B deals, look no further. Sign up to try Enable for free.