Why B2B customer rebate
programs fail — and how to
make yours succeed
A guide for manufacturers and
vendors in every industry who
are looking to regain control
of their customer rebate
This guide will show you the practical steps to take to
maximize the long term value of customer rebates.
Why customer rebate programs
Why customer rebates matter
What’s stopping you from managing
customer rebates effectively
The impact on your business of
poor customer rebate management
How to fix it: practical steps you can
start taking today
Our vision: the deal economy
How dedicated customer rebate
management software can help
Too often, customer rebate
programs don’t deliver
The power of this idea is clear from the huge sums
of rebate revenue that change hands every year. In
North America in 2018, manufacturers sold $6.6 trillion
of goods through distributors, merchants and other
wholesalers, and paid out $500bn in retrospective
rebates. We call this the deal economy.
But—there’s a problem. For many vendors, managing
rebate programs has become a never-ending battle. Key
processes aren’t standardized or optimized. Recording
and tracking agreements effectively begins to feel
impossible. Data integrity falls, and compliance risks
increase. Worse, it becomes all too easy to end up in
long, unnecessary disputes with customers.
Instead of an inspired idea, the deal economy rapidly
becomes a drain on manufacturers’ resources, and—in
the worst cases—a threat to very relationships it was
designed to promote.
The idea behind customer rebate
programs is truly inspired. You reward
distributors and buying groups for
helping you to sell more product, and in
the process, you win their loyalty—while
driving mutual, strategic growth.
The B2B deal economy in
figures: North America
• 15 product categories
• $6.6 trillion of goods sold through
• $500 billion paid in retrospective
Source: Benfield Consulting, 2018
Says Industrial Supply Magazine’s research.
The good news? It doesn’t have to be
this way. The guide you’re now reading
outlines some practical steps you can
take to regain control of your customer
rebate programs, and start maximizing
their value to your business.
Why customer rebates matter
When customer rebate programs are well managed, they’re an effective way of
encouraging loyalty to your business. But more than that, they’re a covenant between
vendor and buyer. A formal commitment to work together, and to succeed together.
As such, they’re also an important mechanism for
directing strategic business growth—empowering
manufacturers to push specific products, in specific
quantities and geographies.
Four benefits of effective
customer rebate management
CAREFULLY DESIGNED, EFFECTIVELY MANAGED
REBATE PROGRAMS HELP MANUFACTURERS
Forge long-lasting business relationships: Handled
well, rebate programs can provide a proven loyalty
incentive for your distributors and buying groups.
Plan for mutual success: You and your distributors
have one key goal in common—increasing profitable
growth through sales of your products. Rebate programs
recognize this, and create a platform for mutually
Drive sales strategically, and at scale: Want to make
rapid in-roads in a new market? Or push a new product
extra hard? Rebate programs extend your influence,
ensuring your distributors’ efforts are in line with your
own strategic aims.
Increase marketing and customer service
effectiveness: Close alignment between suppliers and
distributors can lead to more consistent marketing,
better-informed customer service staff, added value for
customers—and greater sales for everyone.
MOST POPULAR CUSTOMER REBATE TYPES:
Volume-based rebate: You pay a retrospective
rebate to your customer when sales of a certain
product or product category exceed a certain
Value-based rebate: You pay a retrospective rebate
to your customer when sales of a certain product or
product category exceed a certain value.
Co-op funds: Funds where you match (co-op) your
customers’ funds for a variety of marketing and sales
Market development funds (MDF): Funding for
distributor sales and marketing campaigns designed
to generate demand and sales for your products.
Special pricing allowances (SPAs): Funding to
help your distributors match a competitive price in
What’s stopping you managing
customer rebates effectively?
The trouble is, customer rebate programs aren’t always the growth and loyalty
machines they’re intended to be.
Instead, they can quickly become a massive
administrative headache, a drain on everyone’s
resources, and source of long-running disputes. The
ROI of joint planning is difficult to measure, and
instead of driving selling behavior, rebates become
nothing more than deferred discounts.
The reasons for this are threefold: deal complexity,
technology constraints, and internal process
CUSTOMER REBATE DEALS CAN CREATE
A NUMBER OF DIFFERENT KINDS OF
Volume: A manufacturer may have scores of rebate
agreements in place at any one time. It’s easy for
tracking performance against each one but it can be
a time-consuming and error-prone process.
Variety: Almost every customer rebate deal has
different objectives, terms and thresholds. This often
makes reflecting them in finance systems a challenge
and a chore.
Intricacy: Many customer rebate deals involve
multiple layers of terms and restrictions. Unless
you and your distributors clearly understand
their implications, it’s easy for you to find yourself
rejecting claims, and damaging the relationships
you’re trying to build.
Vendors have traditionally managed their customer
rebate programs using two different technologies—
neither of which is designed to cope with the full
complexity of the task.
SPREADSHEETS:When a manufacturer starts
creating, recording and tracking rebate programs, it will
often reach for the quickest fix—generic spreadsheet
software. But as deal volume and variety increases, the
serious limitations of this simple solution become all
too apparent. Updating multiple spreadsheets is slow
work, with a high risk of errors and omissions. Equally
slow is the process of extracting the data that sales
teams, finance teams, commercial teams, customers and
regulators all need.
ERP SYSTEMS: Most leading ERP systems (think
SAP, or Oracle) now include some rebate management
functionality. The problem is, the tools they provide
tend to be relatively limited, supporting only the most
common types of deal. As a result many manufacturers
end up using their ERP system for the deals that fit
neatly into the systems’ box, and spreadsheets for all the
deals that don’t—and effective management becomes
even tougher as a result.
DESPITE THEIR BEST EFFORTS, MOST MANUFACTURERS HAVE PROCESS INEFFICIENCIES
THAT CAN GET IN THE WAY OF EFFECTIVE REBATE MANAGEMENT:
Poor communication between functions: In most instances, it’s an organization’s sales teams which
negotiate rebate deals with customers—often adapting standard agreements made by their commercial
analyst colleagues. The Finance team, meanwhile, must accurately accrue for the liabilities rebate deals
create. If communication and data sharing between any of these teams is flawed, effective rebate
management can quickly become impossible.
No structured process for producing agreements: Deals that are struck in conversation with
customers are often recorded in an ad-hoc way. The result? More deals that can’t be reproduced in the
ERP system, and have to be tracked using complicated, unsecure spreadsheets.
A concentration of knowledge: The real heavy lifting of rebate management often falls to a single,
specialist rebate accountant. If that person is sick, or away on vacation, it’s easy for key processes to grind
to a halt.
The impact of poor customer
When customer rebates are poorly managed, they can actually have a
negative effect on your business.
Damage to relationships: As we’ve seen, rebates are meant to encourage mutually beneficial relationships between
suppliers and distributors. But disputes of the terms of a deal—or a customer’s performance against it—can lead to a
loss of trust, a souring of relations and, in the worst instances, a relationship’s end.
Mounting administrative costs: Managing rebate data within your ERP system—and the labyrinth of spreadsheets
you’ve built up around it—can quickly become someone’s full-time job.
Misaligned efforts: Your marketing and customer service efforts stay misaligned with those of your distributors, as
you fail to unite around shared sales objectives.
A false picture of profitability: Whether you’ve a commercial analyst or a finance professional performing true
margin analysis, they need to have easy access to reliable rebate data. If they don’t, there’s a real danger they won’t be
able to accurately evaluate the profitability of products or customers, compromising your business’s ability to make
smart, strategic decisions.
Compliance issues: As we’ve seen, rebate accounting can get very complex, very quickly. You may need to accrue
for liabilities across hundreds of deals, collect data on sales to indirect customers, and even respond to changes in the
membership of buying groups. But however complicated the task becomes, maintaining a complete and accurate audit
trail is essential. Fail to do so, and you risk falling foul of financial regulations.
Security issues: Managing rebate agreements in a spreadsheet doesn’t just create a huge amount of work, it creates an
unnecessary security risk—making sensitive data easy to alter, copy and lose.
How to fix it: practical steps
you can start taking today
In our experience, every company that sets out to regain control of their
customer rebates sees considerable benefits as a result. Those benefits range
from the immediate (a reduced administrative burden and deeper business
insights) to the long-term (the ability to work more closely and strategically with
The size and extent of the benefits you see will depend on the approach you take to handling customer rebates more
effectively. These seven steps can be considered a best-practice approach to turning customer rebates from an
administrative nightmare into a dynamic engine for business growth.
Think strategically about rebate deals: Take a step back and remember to view rebates not just as a bargaining
tool or a necessary evil, but as a mechanism for mutual co-operation and growth. Identify the customers that present
the greatest strategic opportunity, and focus on negotiating mutually-beneficial rebate agreements as part of an
achievable growth plan.
Negotiate viable rebate terms: It’s essential to negotiate a structure that can be implemented identically by you and
your customer. You should also make sure all calculations are readily accessible to both parties, to minimize the risk of
Expel ambiguity from rebate agreements: Ambiguously worded agreements, unclear signoff procedures, no
single version of the truth and over-reliance on individuals (and their spreadsheets) all compound to create risk and
uncertainty for you and your customers. So, take a systematic approach to agreement content, internal approval,
customer sign-off, change management, and rebate accounting.
Maintain a clear audit trail: Develop a rebate management approach that lets you capture an audit trail
automatically. This trial should include all rebate deals, changes to deals, all relevant data and rebate calculations.
Closely track rebate deal performance: Getting the most from re-
bate programs means taking the time to proactively monitor and drive
your customers’ performance against them—and regularly re-evaluat-
ing the programs themselves. (Something that will be much easier now
you’ve put an end to ambiguous agreements and established a full audit
Review your current rebate management systems: If your current
systems don’t allow you to manage customer rebates effectively, ex-
plore alternative options. A good customer rebate management system
will integrate seamlessly with your ERP systems and empower you to
structure, track, report on, and account for even the most complex of
customer rebate deals.
The Deal Economy
At Enable, we believe that the only way to create a successful Deal Economy is
through cooperation. We envision a collaborative world where manufacturers
and distributors work together seamlessly to win, serve and retain more
customers, more profitably.
That’s what B2B customer rebate management
means to us: a fluid exchange where both sides can
accept and track these deals.
It’s not just about distributors and suppliers both
using the right tools, internally. We want them to get
to a place where there’s connectivity – where they are
sharing data about locations, product information,
purchase transactions and deal effectiveness. But in
order to calculate the true value of deals everyone
need to access the purchase transactions: and that’s
what DealTrack does.
We are working towards achieving this vision by streamlining
the planning, measurement and execution of collaborative
B2B deals and joint business plans; and enhancing trading
relationships for mutually profitable growth.
As a result, manufacturers’ sales people will have all the
information they need to be able to help their distributors
meet their rebate targets, commercial teams can trust
their hard-negotiated deals will be accurately executed,
and both business leaders and finance teams can finally get
a good night’s rest.
WE CALL THAT A WIN-WIN.
How dedicated customer rebate
management software can help
Customer rebate management software allows for the mutual agreement,
electronic sign-off and real-time visibility of sales versus targets. It gives everyone
involved in the process greater visibility and can help improve purchase and sales
activity. Plus it’s a tool that ends up giving everyone involved in the deal fewer
THREE BENEFITS OF DEDICATED CUSTOMER REBATE MANAGEMENT SOFTWARE:
1. Save time and improve accuracy, with a single source of truth for all your rebate agreements, and automated
rebate calculation and forecasting.
2. Drive more sales with greater visibility into your rebate deals and their impact, as well as day-to-day tracking of
3. Design better rebate agreements by modelling expected performance based on historic data—and then invite
trading partners to sign deals off, within your software.
Maintain close customer
Nurture close relationships with your
key customers and you’ll be able to work
together to agree achievable deals, track
performance against them, and course-
correct swiftly if the deal isn’t delivering
as planned. A mechanism for jointly
monitoring progress on an ongoing basis,
and agreeing appropriate actions, will go
a long way towards both parties achieving
the results they want.
What you can
do to make deal
management a reality
in your organization?
A STORY TO CONVINCE THE REST OF YOUR BUSINESS.
Until recently, ATCO was relying on Microsoft Excel and
Word to help it author and manage those agreements.
Now, however, ATCO has chosen to use DealTrack to
reduce the time and money it has to spend on rebate
The software will also bring new level of performance
transparency, as Mark Kirby, President of ATCO, explains,
“I am excited about what DealTrack can do in terms of
improving deal visibility across the organization and
providing real-time performance insights.”
“DealTrack will reduce the
time and cost of calculating
rebates and help us drive more
business through more effective
execution and tracking of
promotional and support deals.”
Mark Kirby, President of ATCO
For more examples of companies who are thriving in the
deal economy with DealTrack, visit https://enable.com/
ATCO flexes to maximize the value of
customer rebate agreements
Headquartered in Fort Worth, Texas, ATCO Rubber Products is the global leader in
flex duct systems. It sells products in more than 35 countries—and incentivizes its
customers through numerous, sophisticated marketing and rebate agreements.
DealTrack from Enable is a cloud-based rebate
management application that integrates with your
existing ERP systems to manage large volumes of complex
deals and ensure that rebate accounting is accurate and
For more information, and to take a free trial, visit
Right now, too many customer rebate programs fail
to deliver. But it doesn’t have to be this way. As we’ve
shown in this guide, there are practical steps you can
take, and practical solutions you can implement, that
will turn customer rebates from an administrative
nightmare into what they were always meant to be a
sustainable source of loyalty and growth.
If you’re currently relying on ERP systems or
spreadsheets for rebate management, one of those steps
may be to implement a specialist software solution that’s
better able to handle the volume and complexity of your
Take control of customer rebates and thrive in the Deal Economy
Get in touch
Would you like
to find out how
work for you?
BOOK A DEMO ONLINE
via the website or call
UK OFFICE: +44 330 251 1057
USA OFFICE: +1 628 251 1057
FIND US ONLINE
ENABLE.COM +44 330 3112 808 +1 628 251 1057
HELLO@ENABLE.COM 10-12 THE COURTYARD
CV37 9NP, UK
535 MISSION STREET
14TH FLOOR, SAN FRANCISCO
CA 94105, UNITED STATES
UK OFFICE USA OFFICE