By offering rebates, you can shift stock and boost orders without relying on up-front discounts. Rebates are a useful pricing tactic because your customer only gets the discount after making a purchase, or series of purchases.
But if you offer rebates with multiple resellers or on multiple products, you end up with an administrative challenge. So is there such a thing as easy rebate management?
Yes – if you set up and manage your programmes effectively. These 4 best practices will help you use rebates to manage stock, improve cash flow, improve reseller relationships and increase sales revenue.
1. Set objectives
You need to understand your goals to determine the best type of rebate. Are you incentivising your channel, your end customers or both? Is the rebate based on purchase volume? Repeat purchases? What percentage are you offering?
Once you’ve set your objectives and structured your rebate programme accordingly, review your strategy on a regular basis to ensure you’re on track with your goals.
2. Have agreements with resellers
Do this up front and you mitigate the risk of future disagreements, ensure transparency and facilitate collaboration. Rebates take time and effort to set up, and this helps you safeguard your business and keep processes slick.
3. Implement a rebate monitoring and management system
Monitoring rebates can be challenging if you’re relying on spreadsheets with manual data entry, where it’s difficult for multiple people to make changes. You and your resellers need access to accurate figures, with a clear audit trail. There are rebate management tools available that simplify these processes, reduce the administrative burden on staff and integrate with your finance and ERP systems.
4. Train sales teams
To get value from rebates, sales teams need to be proactive about promoting them to customers. They need accurate information on stock availability and they need to know when rebates change, so that they can quote accurately and manage customer expectations. You don’t want to be in a situation where a customer is quoted what they think is a net price, only to realise later it’s price net of rebate.
Do you offer rebates to resellers or end users? What tips would you give other businesses?
Key takeaways
- Understand your objectives before setting a rebate.
- Have agreements with resellers to minimise risk and facilitate collaboration
- Ensure all parties have access to information about the rebate programme
- Review and monitor your rebate strategy – don’t just adopt the same one year after year
Get in touch with us today to find out more about our business finance and equipment leasing options.
