With supply chains under increasing stress from inflation, geopolitical tension, and the lasting effects of the pandemic, relationships between supply chain partners have suffered. It’s more difficult to maintain partnerships when deliveries are delayed, prices are subject to change without warning, and other disruptions are happening all the time.
This is why rebates have never been more vital – they allow supply chain partners to build more sustainable relationships by driving mutually beneficial commercial agreements, sales strategies, and other productive behaviors. To fully leverage rebates, companies need rebate strategists who know which incentives will maximize volume and profits, optimize the sales mix, and mitigate risks posed by misalignments with supply chain partners. These strategists need buy-in across the leadership team to ensure that the company is negotiating and executing rebate management strategies that make the most sense for the business.
The CFO and other members of the finance team are responsible for building a rebate management platform capable of quickly adapting to changing market conditions, protecting margins, and forging stronger relationships with partners. Effective rebate strategists need stakeholder support across departments and teams, the ability to collect high-quality data, and a centralized digital platform to facilitate all the above. With the right rebate strategy in place, companies will minimize the risks they face from future supply chain disruptions and identify a broad range of new business opportunities.
Your rebate strategy has never been more important
As companies attempt to navigate a period of extreme economic volatility, rebates provide stability by allowing companies to customize their pricing in real time and incentivize mutually beneficial behaviors. Rebates also help companies reduce their credit risk by offsetting what they owe (or are owed), create opportunities for joint marketing and sales operations, and improve cash flow – which is especially critical when margins are tight.
Rebates provide significant efficiency gains across the supply chain. For example, finance teams can use centralized digital platforms (which are used to negotiate and manage rebates) to automate and streamline payment and procurement processes. This provides huge benefits to CPOs. According to a recent Deloitte survey, CPOs spend 74 percent of their time on transactional and operational activities – a proportion that falls to 63 percent among top performers. Rebates give supply chain partners far more flexibility by allowing them to develop innovative pricing agreements that take shifting market conditions, potential disruptions, and other relevant variables into account.
Finally, digital rebate management platforms provide trading partner visibility, help companies predict demand (and determine whether they have the capacity to meet it), and provide insight about supply chain operations. At a time when 90 percent of supply chain professionals say visibility is a high priority, a comprehensive rebate management solution helps them keep track of discretionary spend outside of the approved supply chain, performance against rebate targets and where the biggest opportunities exist.
What does the rebate strategist do?
The role of finance teams is rapidly evolving – 97 percent of CFOs say their level of strategic influence has increased, and the dismal state of the global economy has accelerated this trend. Today’s finance leaders are expected to spend more time generating insights than merely calculating and reporting, and they’re steadily becoming more integral to the decision-making process. Rebates are essential tools for strategy-oriented organizations because they make it possible to align business strategies across partnerships and reconcile projections with reality.
Rebate strategists use data to evaluate market conditions, identify commercial opportunities, and bring all key stakeholders together around a single source of reliable and actionable information. They work closely with other departments and teams (as well as trading partners) to determine where resources can be deployed most efficiently, how to measure performance, and how to update manual operations and processes which are slow and prone to error. An Enable survey recently found that over one-third of companies still use spreadsheets to negotiate, document, and share deals – a sign that the pace of digital transformation is sluggish.
Rebate strategists have to generate internal support for rebate management and digitization. Companies are often reluctant to invest in new technologies, as they think outmoded manual processes are sufficient. In many cases, companies aren’t even aware of how much the lack of a rebate strategy is costing them, which makes it difficult for finance leaders to present their case. These are just a few of the reasons rebate strategists should have an ongoing discussion with their colleagues about rebates and how they fit into the process of digital transformation.
How to become a rebate strategist
As with finance professionals more generally, rebate strategists need to have an in-depth understanding of how the business functions. They should have wide exposure to different segments of the business, and it’s crucial to constantly ask questions: Where else does this customer buy from? Why don’t we get the sale? Have we considered a rebate incentive? Have we tried personalizing a rebate instead of just looking at sales discounts? When rebate strategists have thorough knowledge of the business, they’ll be in a better position to build high-quality data models that produce actionable insights.
Rebate strategists hold themselves and their teams accountable when they miss financial targets, which is why they have to be capable of measuring performance across the supply chain. The ability to track performance will also help rebate strategists productively engage with stakeholders – it’s much easier to build internal support for your initiatives when you have concrete data to back them up. However, it’s important to remember that data analysis is only as good as the data you gather in the first place – the expression “rubbish in, rubbish out” is particularly salient when it comes to financial data. And once you have that data, don’t be shy about sharing it. While many finance professionals hide behind spreadsheets and email, rebate strategists are actively engaged with the business to see what the numbers actually mean.
Rebates are powerful financial tools that help companies adapt to shifting market conditions, negotiate creative and lucrative commercial agreements, and build healthy relationships with their partners. But rebates don’t develop, negotiate, and implement themselves. It’s essential for finance leaders to be rebate strategists who know how to use their knowledge of the business to negotiate innovative and effective deals, rigorously track the performance of their financial strategies, and earn stakeholder support across the board.
