Why your Traditional Channel Sales Incentive Programs are Failing
Anything worth doing is worth doing well. That’s certainly the case when it comes to a company and its channel sales incentive programs for partners. Managing indirect channel sales incentive programs and price adjustments are complicated. In order to manage sales incentive programs precise and accurate data are needed.
Other channel incentive programs that require accurate date are, but not limited to :
- past and current sales performances measurements
- channel inventory evaluation
- consumer behavior assessments
- determining ROI
- managing stack up agreements (an order of- precedence parameter that determines how indirect channel incentives interact with each other)
- identifying improperly submitted claims
- accruals calculations
- revenue and liabilities statements
- structuring program guidelines
- and a plethora of other multi-faceted pricing adjustment procedures
Problems with Spreadsheets:
Now, who’s to say Excel spreadsheets haven’t helped optimize day-to-day business operations? They most certainly have, and in a multitude of ways. But in regards to indirect channel incentives, Excel spreadsheets don’t have the necessary features or capabilities pricing adjustments require in order to be successful.
In fact, the technical limitations ingrained within Excel’s software is not only inadequate but also may present a potentially catastrophic problem.
That’s because, without an intuitively engineered management system in place, managing indirect channel sales incentive programs become unified and disorganized.
As a result, manufacturers deal with:
- Overpaid claims
- Open-to-interpretation program guidelines
- Revenue leakage
- Vague business objectives
- Partner frustration
- Intentionally exploited submitted claims due to a company’s lack of authoritative resources
Mistakes are often made in the tedious and complex pricing agreement process between businesses. These mistakes can be detrimental.
What to Implement into your Channel Sales Incentive Programs
Take a look at the following key guidelines for designing automated sales incentive programs
1.) Start Date, End Date & Deadline for Claims
Without a tangible time frame that details whether or not a claim should or should not be credited, expect issues.
However, start dates start only after the distributor achieves POS to the end-customer. Once the supplier’s channel partner completes a transaction, the distributor is now “on the clock” to submit a specific claim(s) before the required program end date. Or, depending on certain regulations, the inclusion of an end date may not be included in the claim agreement.
2.) Qualifying Product
In order to approve the off-invoice discount, each claim is either accepted or rejected.
One of the more prominent reasons suppliers experience false claims/loss of income is program administrators ‘green lighting’ rebates based on vague requirements. However, the CMR Ship and Debit module eliminate this ambiguity with robust data management software that authorizes price agreements based on item type/group, product ‘family’ or stock keeping unit (SKU).
In building sales incentive programs, it’s imperative to segment the basic restrictions before delving into specifics, as this helps fuse the algorithmic process.
3.) Eligible Partners
Sales incentive programs should always be based on some level of exclusivity. Resellers, end-users, certain companies, regions, states, and countries should all have some level of access to your module in order to keep your ‘business channel hierarchy’ healthy and happy.
4.) Rules for Programs
At the end of the day, it’s your program. Each incentive program should require concise qualifications that eradicate falsely approved claims, human error, disputed invoices and overpayment in order to eliminate price erosion. Each program should also be unique in that it may require stricter qualifications for ‘sexier’ discounts.
Personalize your program based on:
- your ‘preferred’ eligible channel partners
- the type(s) of product
- the minimum or maximum quantity of inventory sold
- set thresholds for volume incentive discounts
- add linear rate per unit price % differential or total net % price differential.
The CMR Ship and Debit detail real-time reporting so that you can make necessary adjustments, forgo a particular requirement or add additional stipulations.
5.) Exclusive or Stacked
Here is where many claim program administrators struggle. Stacking discounted claims, or submitting multiple claims together, provides channel partners with a singular credited price based on calculating individual programs simultaneously. In most cases, your rebate program will usually remain exclusive to one ‘agreed’ discount as this process simplifies regulations for both you and your channel partners. Although stacking comes with its certain pitfalls, the rewards can be extremely beneficial. Stacking provides flexible options for channel partners to explore while gaining unique monetary advantages (which competitors may not offer).
But how you choose to discount your stacked programs is contingent on your own guidelines:
- Can the discount be stacked with other discounts?
- If two programs are stacked, are they calculated on the base price of the transaction, or is one calculated based on the net price after the initial discount?
Properly managing program ‘priorities’ is essential for establishing a successful automated claims process. The Ship and Debit module provides a seamless process, allowing you to modify claim priorities based on market urgency, clientele, stacking priority, etc. Ultimately, the program administrator has the final say in determining which claims are automated first.
Implement Automation to Manage your Indirect Channel Sales Incentive Programs
Computer Market Research (CMR) Ship and Debit module, a state-of-the-art promotional rebate platform that seamlessly validates submitted claims, adjusts the accrual price and feeds real-time reporting of channel sales data, dispute management, and data export.
CMR’s Ship and Debit module offers a user-friendly interface and built-in customizable features. The module gives you the freedom to tailor your sales incentive programs based on your own specific guidelines. And with its sophisticated web security data software, you control the level of access acquired to each channeling partner.