Knowledge is power: “Knowing thyself is the beginning of all wisdom” is a quote attributed to various ancient Greek philosophers. We think by combining knowledge of yourself with that of your customers, you’ll gain the wisdom to know how to best serve them.
Pricing, Loyalty, and Rebate Management software solutions can provide you with this knowledge. These tools turn the footprints left by your customers into wisdom that you can leverage into profitable decisions.
Protecting market share and revenue
If companies sell to fickle customers or commodity markets products that aren’t as desirable or high quality as those of their competitors, they must do something to somehow stand out.
These companies could be, for instance, animal health and veterinary companies, or healthcare, cosmetics, manufacturing, automotive, chemical, construction and FMCG, trade, transport, or distribution channel companies, or service providers.
They have to work particularly hard to protect their market share and revenue, especially against smaller, more agile, dynamic innovators. These companies must think deeply how to maintain their revenue flow and develop clear strategies to retain clients and protect their business.
Pricing, rebate, and customer loyalty strategies
For these companies, protecting revenue depends as much on product quality as it does on how they interact with customers and the market.
Investing in customer relationships, rebates, loyalty programs, and carefully managed pricing can help them protect profits, gain a competitive advantage, and nurture fruitful relationships with customers.
Generally speaking, pricing strategies can attract customers, loyalty programmes retain customers, and rebate programmes incentivise channel partners and lock in repeat business.
Conducting these activities systematically can also give insights into buying behaviour that will help predict and influence demand, avoid customer churn, and grow revenue.
Why aren’t spreadsheets or home-grown systems good enough?
Large companies have multiple products, customers, channels, pricing levels and loyalty incentives. Spreadsheets or home-grown systems will eventually fail to manage so many moving parts well – accuracy may suffer, and the business may not discover customer motivations and buying habits. And so, its market share, or revenue from existing customers will suffer.
This complexity is best handled by a dedicated, purpose-built system which can improve marketing ROI, increase brand awareness, customer service, build customer loyalty, and reduce costs. This is because purpose-built tools are designed to help companies:
Be relevant to customers.
- By tracking customer spending across multiple channels and enabling businesses to better understand their customers’ purchasing habits, companies can target customers with personalized offers and promotions.
- Customers can enjoy personalized experiences with rewards tailored to each of their requirements.
Create loyal customers.
- Customers can get incentives for repeat purchases and by reaching certain spending milestones.
- Customers become loyal when they are rewarded for repeat business or given other valid reasons to keep coming back. This can be especially important for businesses in highly competitive markets.
- Companies can reduce customer churn by disincentivising switching to a competitor. Customers enrolled in a rebate or loyalty program may be hesitant to give up the rewards they have earned.
Grow customer base.
- Discounts and promotions can attract new customers, especially if you have competitor pricing intelligence.
Improve marketing ROI.
- Software packages normally allow users to identify business objectives such as improving marketing ROI, building customer loyalty, gaining greater market penetration, save money, or increase profit margins.
Core functionality of purpose-built software.
The specific functionality of rebate, loyalty, and pricing management software solutions will vary depending on companies’ business needs; however, most solutions have the following basic functionality:
- Rebate management: create and manage rebate programs, track customer eligibility, calculate rebate amounts, and issue rebates.
- Loyalty management: create and manage loyalty programs, track customer activity, award points or rewards, and redeem rewards.
- Pricing management: create and manage pricing rules, track product prices, and generate reports.
- Reporting: many tools have sophisticated reporting functionality that clearly show rebate and loyalty program performance, pricing, and other metrics.
- Integration with other systems, such as CRM, ERP, and e-commerce platforms.
Some additional features may include:
- Fraud detection that prevents fraudulent claims and protect businesses from financial losses.
- A self-service portal for customers to track their rebates and rewards, redeem rewards, and manage their account information.
- Mobile and cross-platform apps for customers and salespeople to access key information on the go.
8 hidden value-add considerations that make a difference.
All platforms provide plenty of information about features and benefits, but it’s important to check which tools best fit your needs and work habits. These 8 considerations may help guide you in finding the potential fit.
1. Service and support
Consider how much service and support you might need, then check the provider’s SLA to understand how much support your supplier will bundle into the deal. Is it enough, or will they charge you upfront for more support than you need? Some software providers are supported by big name consultancies, which may add to their appeal, or conversely, the extra cost might put you off.
2. Sector and subject matter expertise of provider
Most providers have some knowledge of, but not necessarily particular expertise in, your sector. We happen to have accumulated extensive experience and insight into the animal health, pharma and nutrition sectors that allows us to add significant value. Consider how important it is for you to have a provider well-versed in the peculiarities of your sector.
How important is data analysis and reporting for you? Some tools focus on the process and may fall short of data analysis and flexible reporting, visualisation, and predictive functionality, which can be important for generating insights to improve your bottom line. It’s also wise to leverage these unique insights beyond your rebate system, to sales management systems such as CRMs – so integration (point 6 below) is another key consideration.
4. Scope and dynamic flexibility
Do you want a modular system, or an all-in-one? Bespoke, or off the shelf? Some solutions can be implemented module by module, while others might only come as fully functional, complete systems. Some solutions, like our PriceWise, can be fully tailored to customers’ needs, while others come as one size fits all. Another consideration is how quickly your system can deploy commercial decisions. Because commercial situations can change very fast, you might need to deploy pricing and other market decisions instantly across your organisation. If that’s a likely scenario, choose a system capable of doing so.
Deployment costs and timescales vary significantly between providers. As a benchmark, consider that we can fully deploy PriceWise in 4 to 6 weeks.
6. Integration with your existing IT environment
Most platforms integrate with standard systems, but if your systems are complex, or security is a vital consideration, you might want to choose a technology supplier that has built the platform rather than a reseller. Technology companies are more likely than resellers to integrate and adapt their solutions to your specific requirements.
Will the system you purchase be fully utilized? Most platforms are feature-rich, but many also have multiple points of friction which could make them unintuitive, frustrating, or hard to use. This will undermine user adoption, especially if users are resistant to new ways and new workflows. Thoroughly road-test the usability of the systems you are considering, because user adoption may make or break your ROI.
Add up all the overt and hidden costs, and ensure you will still get a good ROI.
We recommend you collect all your stakeholder needs, and create a scorecard, or a decision matrix that includes not only the features you need, but also a clear view of what you want from the 8 value-add considerations listed here.
In this article, we have shown the importance of pricing, rebate, and customer loyalty strategies for businesses that want to protect their market share and revenue. We also discussed why you might want to use purpose-built software to manage these strategies.
In addition to the core functionality of rebate, loyalty, and pricing management, there are several hidden value-adds that businesses should consider when choosing a software solution. By considering these hidden value-adds, you can gain so much more value, and protect and grow your market share and revenue more effectively.
Our own product, PriceWise, is an end-to-end solution for managing pricing and rebate programs. It covers each process: from client recruitment to contract management, contract tracking, and finally assistance in automatic customer pay-outs. Request a demo, or contact me to find out more.