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The State of Special Pricing Agreements: Opportunities in Efficiency, Administration and Analytics
The State of Special Pricing Agreements: Opportunities in Efficiency, Administration and Analytics
While many types of rebates exist, none is more unique or complex than the special pricing agreement (SPA). We decided to dive deep into how companies are using SPAs to better understand needs and drivers, and this is what we found.
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We Discovered Some Surprising Trends
Many companies consider SPAs an integral part of their core business strategy in spite of how complex SPAs are, but there are plenty of opportunities for process improvement.
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One Rebate is Unique From All Others
We might even call it special — a special pricing agreement. SPAs are a complex deal type and not every business throughout the supply chain utilizes SPAs. In fact, many businesses choose to avoid them whenever possible.
Rebates Come in All Shapes and Sizes
They are designed to accomplish specific goals, allowing companies to increase brand recognition, boost sales, build product loyalty, lock-in relationships, stay competitive and so much more.
SPAs Form a Crucial Part of Many Businesses’ Core Strategies
44.3% of respondents said that SPAs are a fundamental strategy, and 42.4% report using SPAs to protect or control their margins.
What is your opinion of your SPAs from a commercial perspective?
How pressures on the supply chain have changed relationships with trading partners
How pressures on the supply chain have changed relationships with trading partners
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Small Teams Manage SPAs, and There is Room for Process Improvement
Most (71.4%) rely on a small team to manage their SPA negotiation and maintenance. Most (73.2%) rely on a small finance team to administrate the financial side of SPAs. 37.1% of these small teams spend up to 50 hours per month administering their SPAs.
When asked what functionality they’d want in a SPA solution, responses were split evenly at 20.4% wanting flexible calculation mechanisms and analytics, followed by 16.7% wanting reporting and dashboards.
Gaps Exist in Current Reporting and Analytics Capabilities
64.3% of respondents told us they have 100-5,000 SPA contracts. But a worrying 1 in 5 didn’t know how many contracts they have, how much is claimed under these contracts or if their annual SPA claims are larger or smaller than the annual value of rebates.
Frequency of friction due to misaligned objectives
Frequency of friction due to misaligned objectives
How would you rate the efficiency of your SPAs process?
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The State of Special Pricing Agreements: Opportunities in Efficiency, Administration and Analytics
While many types of rebates exist, none is more unique or complex than the special pricing agreement (SPA). We decided to dive deep into how companies are using SPAs to better understand needs and drivers, and this is what we found.
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