Why Customer Rebates are the Best Thing (For Customer Success) Since Sliced Bread
There are two sides to the customer rebate story: the customers’ side where, historically, retailers and distributors have not always been paid the full value of the rebates they should have received; and the manufacturers’ side (those who offer the incentives in the first place). When the old enmities are laid to rest, though, customer rebates can be the best thing since sliced bread for customer success.
Customer rebates have a bad reputation
In the past, those giving away rebates were accused of dishonesty and of trying to make it difficult for their customers to claim rebates. This led to great customer dissatisfaction as, in many cases, the accusations were valid. However, it wasn’t just that manufacturers wanted to hold on to as much cash as possible, or that some customer rebates were designed to obfuscate the true costs. Often, manufacturers were simply trying to do the best they could with the information they had available. And that information was often inaccurate, almost always locked away in nearly incomprehensible spreadsheets, and regularly difficult to validate. Without accurate records, or a consistent way of recording, communicating, tracking and assessing rebates, it’s not surprising that they couldn’t always pay out in full.
There’s a new way of looking at manufacturer / customer relationships
Today, there’s an alternative way of seeing customer rebates, and a number of manufacturers are embracing the customer who wants a structured, planned trading arrangement with them because they understand that customer rebates are an opportunity for mutual benefit. Obviously, customers who insist on having rebates want to buy your goods. Some manufacturers think that is enough. However, forward-thinking manufacturers go a step further. For them, rebates are a way to serve their customers better and to engage in a joint go-to-market strategy. They see rebate management as an essential part of their growth strategy and treat customers as true partners. These are the kinds of manufacturers who are turning away from spreadsheets and towards software to help them manage customer rebates far more efficiently.
Providing deal clarity for both manufacturers and distributors
When we first built our rebate management software, the idea was to help retailers and distributors claim more of the rebates to which they are entitled. But we soon realised that forward-thinking manufacturers were seeing the benefits of customer rebate management, too. They understood that the world is changing and in this era of authenticity the best way to retain their customers and keep them happy is to make life as easy as possible for them. This is why more and more manufacturers are now using customer rebate management software to incentivize their customers for success. They know that a good customer rebate management approach allows them to grow their market share and their footprint, which ultimately means their customers will be more likely to choose their goods over their competitors’ ones. And the more of their product is sold, the more their business stands to benefit.
Forward-thinking manufacturers know that customer rebates are about:
- developing common business plans and shared goal setting
- investing in the relationship for mutual success
- creating a partnership based on shared goals and a solid foundation and
- investing in shared marketing material and product distribution.
A call for better rebate management for mutual success
In an ideal world, customer rebate management helps both participants in a deal agreement grow their businesses because they invest in each other. As a result, rebates reward performance and help both sides align their financial goals for optimal reward. When deals are managed properly, they can be the foundation of excellent customer relationships and can be a highly-valued financial management solution. When this happens, customer rebates really are the best thing for customer success since sliced bread. However, manual systems can often get in the way of true visibility, information sharing, and trust – and they are still in common use on both sides of the deal economy.
Until recently, there wasn’t an easy way to track customer rebates
Since great customer relationships depend on great visibility of deals and deal conditions, we wondered why more manufacturers and customers haven’t joined together to make life simpler? After all, everyone is on the same mission to get products into market. The answer lies, in part, that until relatively recently there wasn’t an easy way to track customer rebates. Clunky, bloated spreadsheets may have given one side visibility of rebate management and progress (if they could be kept up to date accurately), but the information wasn’t easy to share or track or reconcile. Now, there is a solution that can serve both parties.
Benefits of digitalizing customer rebates
Customer rebate management software allows for mutual agreement, electronic sign-off and real-time visibility of sales versus targets. It gives everyone involved in the process greater visibility and can help improve purchase and sales activity. Plus, it’s a tool that ends up giving everyone involved in the deal fewer headaches. In addition, it is also possible for manufacturers to provide financial management solutions to their customers. Manufacturers can offer agility in structuring financial goals, controlled cost pricing in branches, ensure group profit protection, and help their customers balance cash flow and margins. For customers who value cash flow more highly than profitability, or see margin as being more important than cash flow, this kind of flexibility gives customers a huge advantage – and builds a stronger relationship for mutual benefit. Essentially, good customer rebate management is about giving customers choice, having flexible agreements and finding a tailored solution for them, but it is only possible if the information exchange between both manufacturers and customers is accurate, up-to-date and flows both ways. Rebate deals that allow full visibility, flexibility and encourage collaboration help reward your customers’ success, and create better sales for you!
Which side do you want to be on?
It just remains to ask: if you’re a manufacturer handling customer rebates, which side do you want to be on? The side that has historically penalized their customers for being almost committed to them, or the side that listens to their customers, agrees on how best to serve their needs and, incidentally, sells more products as a result? Ultimately it seems likely that, in this era of authenticity, those who embrace a genuine relationship with their customers based on openness and mutually-beneficial sales are going to stay ahead of the game. Making deals honest and transparent is a win-win for both sides. And that’s why customer rebates can be the best thing since sliced bread – when they bring manufacturers and their customers together and help them set aside the troubles of the past.