Are you dealing with rebates strategically? Or does their often burdensome administration lend itself towards more disorganized, chaotic, and siloed approaches? In this article, we discuss how to get your rebate strategy on the right path to maximize the benefits of the rebates you already manage, and set yourself up for future success, improved partnerships, and better relationships.
Why do businesses get it wrong?
Planning an effective rebate strategy is an art. When rebates work well they consolidate relationships between buyers, suppliers, and customers. They incentivize and then reward loyalty. And they foster mutually-beneficial business relationships.
But there’s a key factor at play here – rebates demonstrate all these benefits when they work. When they don’t work they are a time-consuming yet unrewarding activity, at best, and a destroyer of relationships and trust, at worst.
Why do businesses get rebate management wrong? It’s not about the intentions behind the deals – the logic is usually solid (new products, new regions, improved market penetration, or simply more sales).
As with any complex initiative, the devil is in the details.
Unfortunately when it takes months, if not multiple quarters, to determine whether a rebate approach is working or not, even the best intentions, and focus on details can let down multiple partners who rely on rebates to bolster profits, or even show a healthy bottom line. It’s hardly the procurement, finance, commercial, sales, or management team’s fault if they are unable to predict the future.
But what if they could? Or, if not predict the future, at least envision the likelihood of deal success? What if all partners could see whether they’ll reach the next tier, and target their behavior appropriately? What if it were possible to streamline processes, improve collaboration, gain total deal visibility, and enhance reporting and forecasting? These days, that’s perfectly possible.
What does a strong rebate strategy look like?
A strong rebate strategy can often be the foundation of business success, the difference between profit and loss, and a proactive strategy to enhance customer loyalty. However, a rebate strategy – no matter how far forward-looking it is – will fail if trading partners are not aligned.
Manufacturers’ Monthly openly states that rebate management is, “a complex process and, for manufacturers with fewer resources, some might skip more sophisticated rebate programs entirely”. But for those that do, the key lies in having a “complete and transparent view of every aspect of the customer’s account and relationship with you.” Does it sound like a utopia? Perhaps. But, they say, “it’s an achievable utopia”.
At Enable, we’ve worked with more than 2,000 customers and have an annual churn rate of 0.00%. As the SaaS platform that drives trusted relationships between B2B trading partners, we know that focusing on the strategic value of B2B deals has multiple benefits – but only if it’s handled correctly.
A strong rebate strategy applies many of the principles of a good ERP strategy it:
- Is aligned with your business strategy
- Has clearly-defined KPIs and success indicators
- Makes the most of your data strategy – or can even define it
- Challenges you to optimize your processes
- Is always evolving to make the best use of the latest relevant and appropriate technologies.
However, just like implementing a new ERP, Deloitte reminds us that some fundamentals must be in place to make the implementation a success. It’s important to have good deals that benefit all parties. But these can’t exist in isolation. A great rebate strategy is based on a solid vision and a clear understanding of business needs. It gets the right mix of business partners at the table. It has a clear roadmap. And it engages relevant stakeholders by using appropriate change management principles – mostly by helping them want to participate.
A great rebate management strategy also considers how functions and processes interact and helps smooth out the transitions between their integration points. It’s based on solid, accurate data, and enables people to use that data as close to real-time as possible. And, possibly most importantly, it helps all parties see the true status of their deals.
We would be remiss to say that a great rebate management strategy is only about the details. It’s not. It’s also about the bigger picture. But without the details, rebates might as well not exist. In the past, it wasn’t easy to track those details. Now, it is.
There’s a reason that Chadwell Supply is turning rebates from a cost center into a profit center and Grafton has claimed income they would have missed without Enable. There’s a reason Auto-Wares calls it “game-changing software” and Browne chose Enable to replace their entire ERP. You can read all of their customer stories individually, or you can trust that the key to rebate success lies in using the right tools for the job.
Walt Disney once famously said, “There is no magic in magic, it’s all in the details.” The same applies to rebates.
Tips for building an effective rebate strategy
Rome wasn’t built in a day, and neither is a successful rebate program (although, with automation, it can be built in a matter of days or weeks, not months, as may have been the case in the past). But where should companies who have relied on manual, or semi-automated rebate management processes start to build an effective rebate strategy?
Here are our tips.
- Start by streamlining your processes. Or, at least, identify what your current processes are and be open to improvement.
- Consider the cost of current rebate management efforts and the benefits of improving efficiency.
- Ask your customers what would make their lives easier and search for a solution that works for them, and you.
- Examine ways you can reduce errors, or duplication by automating processes.
- Make sure you know whether your separate systems can be integrated, or have experts to support you with data integration and cleansing.
- Consider the business needs of any departments and functions currently impacted by elements of the rebate management process.
- Involve those who will be using, or benefiting from, a rebate management solution and their leaders to build alignment.
How rebate management software can support you
Managing rebates effectively doesn’t just give you data confidence and smarter trading which can lead to better opportunities, and stronger relationships, they transform the entire rebate experience. Good rebate management software can help improve communication, manage supply chain risks, improve stability, share best practices, reduce costs or increase rebate income, and even provide a competitive advantage. If these benefits aren’t enough, read even more about the benefits of rebate management software.
In essence, the long-term benefits of streamlined processes, and improved visibility cannot be denied. That’s why we’re proud to be so much more than rebate management software.
But don’t just believe us. Try us, for free. Sign up for a free trial and get a feel for how Enable’s platform can drive profitable growth for your business and get your rebate strategy on the right path to maximize benefits