What if you could meet your sales goals, without comprising on your brand image with deep discounts?

What if you could drive customer loyalty without affecting your top-line revenue?

With an effective Rebate management program, you can do this and much more.

Simply put, a rebate is a delayed or deferred discount. The buyer can only avail of the benefit offered by the seller after the completion of the sale.

Consider this simple example:

Richard went to the mall to buy a brand-new phone. While returning home, he got a message informing him that if he made another purchase from the brand in the next 6 months, he would get a 5% cashback for his phone, and another 10% cashback on his next purchase from the brand!

That is what rebates do. They incentivize buyer behavior, which can in turn can be used to boost your sales, increase customer loyalty, drive sales through a particular channel etc. This makes rebates a very versatile promotional tool for businesses to drive various consumer or value chain behaviors.

Rebate Management Challenges:

When we speak to our customers who do not have a sophisticated Rebate Management program in place, they commonly cite the follow key challenges in rolling out a rebate management program for distributors and customers:

  • Centralized rebate agreement maintenance: The rebate agreement defines the conditions, and prerequisites for rebates, mode of settlement, and more. These agreements are often created and maintained by different teams, mostly in non-standard documents, leading to lack of uniformity when it comes to rolling out rebates to customers.
  • Accruals management: Accruals refer to the amount of rebate $s that have been earned, but not paid. Businesses need to forecast the amount of promotional dollars that are yet to be paid in the form of rebates, to account for it, plan for operationalizing it and accurately track their profitability.
  • Tracking & reconciliation: Tracking sales invoices and mapping these invoices to rebates offered, is time consuming, often requiring lot of manual intervention, and can lead to customer dissatisfaction if there is a lack of transparency.
  • Disbursing rebate claims: Once the final rebate amount has been computed and agreed upon with the customer or distributor, Rebate $sneed be sent to a bank account or an online wallet to complete the rebate cycle. The key challenge encountered in this step is automating the rebate calculation and disbursement. If the disbursement process is manual, this can lead to errors and ultimately customer dissatisfaction.

Why should you invest in creating an effective Rebate Management program?

Challenges aside, several large corporations shave managed to successfully roll out a rebate management program in both B2B and B2C sales channels. These companies cite the following benefits of an effective Rebate management program.

An Effective sales incentive tool

Volume or revenue rebates are used widely to encourage consumers to buy more. The rebate is promised after the purchase of a certain volume of products or after the customer spends a certain amount of money. These rebates are tiered smartly which requires the consumer to spend more to earn more rebates. Thereby, encouraging more sales.

Positively influence customer loyalty

Loyalty rebate programs are designed mainly for customer retention by incentivizing regular buying

For instance, end of year rebates which are offered to distributors, if they meet annual sales targets, or a rebate for customers that buy at least one product every month.

Reinvigorate dormant buyers

Underperforming market segments or channels can be rekindled with attractive rebate marketing strategies which encourage dormant buyers to make a fresh purchase. These types of rebates can be rolled out to buyers in a specific geographic location of strategic importance or incentivize distributors with additional payouts tied to meeting sales penetration goals in specific markets.

A versatile tool: Incentivize both buying and selling behavior

Discounts are uni dimensional, because they can only be used to incentivize buying behavior, whereas rebates can also be used to incentivize selling in the value chain. If you offer too much a price discount to a distributor, they will just load up their warehouse with your product and sell it at the same velocity as before. However, you can change that by offering them a sell-side rebate, for e.g. $5 per unit rebate if you sell 500 units before May.

Promote without affecting brand equity

When was the last time you heard a premium brand like Gucci, Porche, or Rolex offer a discount? Never! Fluctuations in retail price impact brand equity and perceived value. Rebates, on the other hand, have a degree of separation from the price. Thus, they can be used effortlessly in any phase of the buyer’s journey and for all types of buyers.

How to get started?

With digitization, many companies rely on rebate management solutions to manage and roll out their rebate programs to customers and distributors.

Companies that once depended on legacy software or makeshift spreadsheets for rebate management are taking the advanced route with modern rebate management solutions. Wondering what’s fueling this rapid shift?

The answer is simple: machine learning algorithms.

Machine learning churns out new insights from expansive data pools and consumer trends to design cutting-edge, robust rebate programs. It also provides quantifiable results that translate to more transparency among stakeholders.

A good rebate management solution is like a genie that takes care of most of the backend work on its own with little to no human intervention. Thus, eliminating the risks of human error and reducing the burdening cost of human capital
Vistaar offers an advanced, machine learning driven, rebate management platform that employs advanced technology to –

  • Design effective rebate programs
  • Calculate rebates with utmost precision
  • And make the process quick and efficient.

Get in touch with us to know how Vistaar can help your company roll out an effective Rebate Management program.

Shashank Misra

About Shashank Misra

Shashank Misra is a Director of solution consulting at Vistaar, who has spent more than 10 years advising Vistaar’s prospects and customers in the Beverage Alcohol industry on all things pricing

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