Manufacturers and suppliers use rebates to drive sell-through of specific products while providing incentives to value-oriented customers.
NB: This is an excerpt from our latest eBook. Click here to download the full eBook.
While rebates have often proven successful, where the challenges occur is managing what can be extremely complex sales strategies (and what’s to be paid) across complex organizations.
Bringing order to your payable rebates program
It’s no secret that margins are tight for manufacturers and suppliers.
Raw material costs, shipping, production, labor, among other moving parts and expenditures all contribute to what is a complex game of managing margins and maximizing revenues. Data has become valuable currency to help manage variable aspects of business, find new opportunities, uncover challenges, increase efficiencies and prepare for the future.
Manufacturers and suppliers recognize the inherent value in data. It’s why they invest significant resources into integrating software, systems and sensors into a business intelligence solution for a single source of truth. It’s why they look to capitalize on data aggregated from across the enterprise to produce insights that improve every aspect of operations. With information, companies can better track key performance indicators that help them effectively manage costs so they can maximize the earning potential for all their products and services.
For decades, manufacturers and suppliers have used rebates to drive sell-through of specific products while providing incentives to value-oriented customers. Strategies behind the use of rebates have also evolved from an attempt to quickly boost sales to more long-term tactics focused on driving customer loyalty and brand affinity. At its core, manufacturing is among the most complex industries to manage. The large number of SKUs, customers, suppliers and transactions is only made more complicated when you throw in pricing strategies and rebate programs.
Tight margins make rebates even more important, however.
Manufacturers and suppliers turn to payable rebates to incentivize sales, both short and longterm. While rebates have often proven successful, where the challenges occur is managing what can be extremely complex sales strategies (and what’s to be paid) across complex organizations.
Rebate programs can be complex and time consuming.
Consider that many manufacturers offer hundreds to thousands of products through a variety of sales channels to a geographically dispersed customer base.
Now consider the number of transactions that one of these ecosystems can produce daily, monthly or annually. The combinations of types of rebates to products, customers, locations and transactions can be a major headache for anyone tasked with administration. Given the complexity, companies appoint a rebates manager or finance team member dedicated to managing the program, which can take up to two or three weeks out of the month.
Most organizations, unfortunately, manage their rebates programs using ill-suited spreadsheets, which adds to the existing challenges. For those that use spreadsheets for any type of data tracking, you know the limitations. Data is static, meaning that what you see is a simple snapshot in time, and may not reflect the actual state of the business. Manipulating fields can be a challenge, particularly when attempting to convert the raw data into actionable intelligence. Spreadsheets are prone to human error and lack agility, or the ability to go beyond the numbers you see. Updating the data is a tedious manual process, while any comparative analysis requires more rows, columns and spreadsheets.
This was an excerpt from our latest eBook 'Bring order to your payable rebates program'. Click here or on the button below to download the full eBook.