In this session ...
A “pay-for-performance”
monetary reward
a form of sales promotion
used by marketers as incentives to sales
offered in return for a specific
performance
typically not paid until after the purchase
Analytical
•
•
Administrative
•
•
•
•
Monitor compliance
Process claims
Settle payments
Reconcile short-pays
Manual
Error-prone
Tedious
Track fund usage across
promotions
Evaluate program’s
profitability
Maintenance
•
•
Set up complex programs
Make promotions visible
throughout organization
Funds
Bill backs
Allowance contracts
Plan
Generate
Analyze
Settle
Workflow approvals
Estimated vs. actual
fund cost usage
Lump sums
Promotional
effectiveness
Cubes
Off-invoice discounts
Deduction workbench
Bill back workbench
Payments
Process trade allowance
Plan
promotion
Create a fund
Marketing Manager
Set up a
trade allowance
for a bill back
Super Sales Rep
Execute
sales
Process
claims
Settle
payment
Analyze
promotion
Create and invoice
sales orders
Cumulate and
process
the bill-back
Reconcile customer
short-pay with the
deduction due
Run analysis
Order Processor
Accounts Receivable
Administrator
Credit and
Collections Manager
Marketing Manager
Promotion
planning
Funds and allocations
Allowance agreements
3 merchandizing events
Better utilization of
marketing promotion
funds
Flexible incentive
setup accommodates
multiple promotion
forms
Claim
processing
Automatic creation
and accrual
Billback workbench
Payment
settlement
Integration into
regular A/R process
Deduction workbench
Reduced administration time and errors
Promotion
analysis
Fund details report
Actual cost report
Analysis view / graphs
Trade allowance cube
Quantified baseline
for negotiations
Promotion planning
Allowance types
Analytics
Claim processing
Deduction management
Workflow-based approval
Customer requirements
Trade allowances
Customer rebates
Fund allocation per customer hierarchy,
products and events
N/A
Bill-back, off-invoice, lump sum
Rebate (=bill-back)
Comprehensive
Limited
Tool-driven
Tool-driven
Workbench tool
Workbench tool
Enabled
Enabled
Focus on promotional agreement
management, fund planning and analysis
Rebate offers without promotional
agreement planning
Royalty is a usage-based payment made by one party to another
for the right to ongoing use of an asset or an intellectual property
Define
Agreement
Post
Customer
Invoices
Process
Claims
Broker's fee is a payment to an agent for the service of
facilitating transactions between buyers and sellers
Define
charges
Define broker
contracts
Post sales
invoices
Process
broker claims
Key take-aways
Possible solution
Offer incentives to reduce return rates of high-volume high-returning customers
* Christian Schulze of the Frankfurt School of Finance and Management studied 5.9m transactions in Germany, involving
166,000 customers, for a large European online retailer
** The Economist, Return to Santa, Dec 21st 2013.
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