In this scenario we will be looking at how distribution players can improve rebate performance while providing complete financial visibility through analytics KPIs. Businesses establish rebates to incentivize growth or sustain business at targeted accounts. To monitor progress on sales versus the rebate objective throughout the rebate period, sales and business teams need to view data on sales volume or revenue for the product(s) involved in the rebate, updated on a monthly basis, and including a view of the target apportioned across the time periods where the rebate is in effect. With Pricefx it is not only possible but fast, reliable and streamlined.
Use Case Situation Description
User Role:
Sales Executive, Manager, or Analyst; Pricing or Product Manager or Analyst
Business Objective:
Our business establishes rebates to incentivize growth or sustain business at targeted accounts. For the sake of achieving the business objectives, our sales and business teams need to be able to monitor progress on sales versus the rebate objective throughout the rebate period. This helps us remind the customer of progress toward attaining the rebate payment and maintains targeted business levels. It also helps us understand the likelihood of making the rebate payout at the end of the rebate period.
Complication:
Once a rebate is established with a customer, viewing sales performance data against the rebate target is not easily done. Data on sales volume or revenue must be obtained for the product(s) involved in the rebate and must be updated on a monthly basis. Graphs or tables of this data must include a view of the target apportioned across the time periods where the rebate is in effect to show progress versus the goal. Additionally, automated calculation of a metric of effectiveness is needed to allow sales to see if progress versus the goal is consistent or “lumpy”, where it is likely preferred for planning purposes to have sales evenly spread across the rebate period instead of catching up with large chunks of sales volume close to the end of the rebate period.
Capability Needed:
The ability to generate views of current sales revenue or volume for the rebate time period against the rebate goal for the product(s) covered under the rebate agreement.
Benefit:
Understanding customer performance and enabling higher realization of rebate goal outcomes.
KPIs:
Revenue or volume versus target; rebate effectiveness
Calculations:
Rebate effectiveness = [(Sum of absolute value of (actual – goal) for all time periods in rebate) / number of time periods in rebate] * 100