VP of Client Engagement at rSTAR Technologies.
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A recent Deloitte survey reported that the manufacturing industry is experiencing positive economic indicators despite historic labor and supply chain challenges. This can be attributed to many manufacturers adopting innovative solutions to continue their digital transformation.
Looking at the Deloitte survey, it seems that manufacturing has made significant progress in technology initiatives. But one area often lags others in digital transformation: rebate management programs.
Studies have demonstrated the measurable, positive impact on margins many companies have seen as a result of implementing rebate management solutions. In addition, automating rebate programs makes them more efficient and productive, builds customer loyalty and offers the potential to boost ROI.
I’m often shocked at the number and complexity of spreadsheets that companies are using to manage their rebate programs. Today, when we automate so many business processes, why are we still using spreadsheets to manage loyalty programs that have the potential to generate additional revenue?
Why automate a rebate management program?
How much time does it take to manage your current rebate management program? The answer is probably hard to pin down.
Manual processes take considerably longer than automated ones. Updating spreadsheets for rebate programs may involve multiple files and worksheets as well as numerous data entry steps, resulting in a lengthy process to establish rebate parameters, track participants and issue rewards.
You may also be experiencing losses to efficiency in not automating. Calculating the actual rebate amounts can be quite cumbersome using spreadsheet formulas. Finding the error in a formula can be a needle in a haystack—and not finding it could result in potential overpayments, leading to expensive losses.
Your partner loyalty can also be affected. The longer you take to make payouts, the longer it takes to build partner loyalty. If it takes 90 days to get paid, partners may seek other manufacturers who pay quickly.
Now, imagine if this process were automated.
The financial gains from automating your rebate management program can be great.
Automated rebate management drives channel revenue by providing insights on incentives that optimize sales, maximize volume and profits and mitigate partnership misalignment risks. Companies can adapt more quickly to changing market conditions, better protect their profit margins and reduce the potential revenue loss that arises from slow adjustments to change.
In this time of extreme economic volatility, every moment can amount to millions of revenue gains or losses. An automated rebate management system provides stability and simplifies real-time pricing customization and incentivization.
Automated rebate management also reduces credit risk by offsetting what companies owe or are owed. It improves cash flow and creates more marketing and sales opportunities. Supply chain partners have more flexibility to develop innovative pricing agreements that consider changing market conditions, potential disruptions and other relevant variables. These increase manufacturers’ profit margins even in tight conditions.
Furthermore, automated rebate management brings significant efficiency gains in terms of time and cost reductions in the supply chain by streamlining payment and procurement processes.
Finally, with increased visibility associated with automated rebate management, manufacturers can easily track spending outside the approved supply chain, which can help identify significant opportunities. This makes it easier to both measure incentives and repeat profitable ones.
Automating your rebate management program can also increase your partner loyalty.
Manufacturers enjoy increased sales in which partners and distributors experience fast and easy processes. Easier processes mean happy partners and distributors; this is good for business. The world is becoming more fast-paced, and expectations keep rising. Fewer and fewer distributors are willing to stick around for the complexities of a manual rebate management program.
Treating existing stakeholders well brings an immediate loyalty increase. Manufacturers can give as many special discounts, promotions and incentives as they want. They are also better positioned to retain distributors, build loyalty and save on sales and marketing costs.
Automating your rebate management program allows you to update it more easily.
Automated rebate management makes it easier for manufacturers to update variables like rebate types, dates, eligibility thresholds and more. This saves time spent on manual updates. With automated rebate management, real-time business intelligence informs rebate adjustment decisions on program optimization to increase revenue opportunities and gain a competitive edge.
What steps should companies take to automate their rebate management program?
I advise a five-step approach for companies seeking to leverage the benefits offered by automating their rebate management program.
1. Assess your current processes to date. What are the known pain points?
2. Now, map out what the best-case scenario would look like. If you could remove the pain points, what would your process look like? What are the potential efficiency gains?
3. Conduct vendor, product and solutions research.
4. Complete your due diligence and assess what makes the most sense for your company. What is stopping you from automating?
5. Consider whether you need an implementation partner to complete or tweak the process—or whether you want to opt for a new software platform and build up your automated rebate management program from scratch.
Is your company ready to automate its rebate management program?
It’s a truism in marketing that it costs more to win a new customer than to sell to an existing one. Automated rebate management programs promote beneficial relationships that save time for the sales and marketing team, save money for the manufacturer and increase channel revenue opportunities.
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