When implemented properly, B2B rebate programs are one of the most powerful pricing strategies for boosting sales, improving customer loyalty and influencing desirable customer behaviours.
No matter if you’re looking to incentivise and reward buyers for making large purchases, generate demand for high margin products, move old inventory, or drive revenue or volume growth in a particular product line, your B2B rebate programme can help you do it all.
When you offer the right incentive to the right buyer at the right time, you can increase sales volume and meet your most important business goals. However, due to their inherent complexity and the many different types of rebate you can offer – volume rebates, value rebates, growth rebates, product mix rebates, to name but a few – B2B rebate incentive programmes can quickly become difficult to manage if not structured correctly.
The problem, of course, comes from offering multiple rebates to multiple buyers across multiple products. Before long, you’re faced with the huge administrative challenge of trying to record and track all the agreements you’ve made, keep on top of any changes that occur, constantly perform recalculations based on those changes and manage all the rebate claims that come pouring in.
What, then, can organisations do to improve the rebate management process?
1. Don’t Use Spreadsheets
Many organisations still rely on the age-old spreadsheet to manage B2B customer rebates. This is risky, time-consuming and almost inevitably leads to errors as ever more rebate agreements – and types of agreement – are added and more and more sheets are needed. B2B rebate programs are multi-faceted and complex and can quickly swamp a spreadsheet with data.
As more data is added, not only does the likelihood of data entry errors increase, but it becomes harder and harder to extract the data that your sales teams, finance teams and regulators all need.
Put simply, when it comes to rebate management, spreadsheets aren’t up to the task. They are neither a safe nor scalable solution for structuring an effective B2B rebate programme. Thankfully, there is an alternative.
2. Do Use Rebate Management Software
The best way to improve your B2B rebate programme is to ditch the cumbersome spreadsheet and use a solution that’s specifically designed to support the rebate management process instead. Rebate management software is purpose-built to handle multiple deal types with multiple buyers across multiple products – precisely what your B2B rebate programme needs to do.
Managing complex rebate deals is a long-term endeavour. Calculations need to be constantly performed, price changes have to be maintained and all purchases must be continuously tracked against all agreements that are made.
In order to reduce the risk of error and vastly improve the reliability and efficiency of your B2B rebate programme, implementing rebate management software is the only dependable solution.
Today’s most sophisticated solutions come with built-in calculation engines that process all of your rebate data in real time, eliminating the need for manual data entry – and the associated risks of errors or omissions – giving you accurate, up-to-the-minute results.
What’s more, rebate management software platforms automatically recalculate rebates when things change, ensuring accuracy at all times with little or no manual intervention required.
3. Personalise Your Incentives
To keep things simple, often so a spreadsheet can cope, many companies that offer rebates take the blanket approach – that is, they offer the same deal to all customers. While convenient, relying on such a pricing strategy negates the ultimate purpose of B2B rebate programs – influencing desirable customer behaviours.
Rebates should be awarded when a buyer meets a certain threshold, such as total spend or total volume.
For companies that take the blanket approach, the trouble is that the rebates they offer simply become expected discounts year after year.
In such scenarios, the rebate doesn’t incentivise greater purchases and there is no way to measure the impact of the rebate on customer behaviour. In particular, disorganised scenarios, companies sometimes don’t even check to confirm that the buyer actually reached the threshold necessary to receive the rebate, but hand it out anyway.
The primary cause of this – and for not personalising incentive programmes in the first place – is the lack of a reliable system to track which buyers deserve which rebates.
Of course, personalising rebates increases the complexity of the pricing strategy. However, rebate management software solves this issue. With a powerful rebate management software system, numerous deal types are already built into the system ready to be personalised for different customers to drive different behaviours.
The system will then automatically track the various deals, centralising all rebate data as it does so, giving you a clear view of the effectiveness of your incentive programmes while preventing incorrect pay outs that negatively impact your profit margin.
4. Analyse Proposed Deals Before Agreeing to Them Commercially
Rebates impact margins – the more money you give back to buyers, the less profit your organisation makes. As such, it is essential to ensure that your rebate pricing strategy achieves its strategic goals without eroding your margins to unsustainable levels. To do so, you need to model deals to gain greater insight into the financial implications of any deal you want to put forward.
With rebate management software, deal modelling tools allow you to draft new deals to evaluate how they will likely perform.
Existing sales data can be fed into the engine and data dimensions can be adjusted to let you know what would happen should the conditions of the deal be changed. In this way, you can clearly see if a proposed deal will meet business objectives and how it will impact your margins.
5. Assign Roles and Responsibilities and Automate Your Management Workflows
Approvals and authorisations are crucial parts of B2B rebate programs. In order to keep everything running smoothly, responsibilities will need to be assigned to planning, setting up, promoting, executing and analysing your rebate strategy.
All agreements made must be processed and approved at the right level, as well any changes that occur throughout the rebate lifecycle. The trouble is however, many organisations don’t have a working system in place that defines specific roles and responsibilities for each stage of the process, which can lead to delays, bottlenecks and important tasks being missed.
A rebate management software solution solves these problems.
Today’s systems come with configurable workflow engines, which enable organisations to ensure that all agreements are audited, processed and approved by appropriate parties consistently and efficiently.
Automated reminders can be set to alert relevant individuals whenever their actions are required, meaning all sign-offs take place in a timely fashion and that all incentive programs are being proactively tracked and managed.
Streamline Your B2B Rebate Programme with e-bate – the Ultimate Rebate Management Solution
Building successful B2B rebate programs means having the right tools to do the job accurately and efficiently.
Ultimately, this means putting an end to spreadsheets and adopting a powerful, purpose-built system that optimises your processes and helps you reap the full rewards of your incentive programme.
e-bate is the ultimate rebate management solution. Delivered as a SaaS, e-bate is designed from the ground up to help companies structure and manage their B2B rebate programs and overcome the challenges of managing complex pricing strategies. With a built-in calculation engine, automated workflow engine and powerful deal modelling features allowing you to make rapid assessments of the deals you are negotiating, e-bate is your single source of all rebate information, providing you with the insights you need to make proactive decisions that drive business value.