We live in a time of incredible technological advancements and as a result, we also live in a time of unprecedented competition in business. The upside of this is that the consumer marketplace has become full of comparatively high quality and comparatively priced goods. The challenge in that, of course, is that when companies are no longer competing on quality, many begin to compete on price. Price competition is a race to zero that nobody wants to win.
Many readers will recall the 1986 book Kaizen: The Key to Japan's Competitive Success and how it popularized the phrase ‘continuous improvement.' One way to stay out of the price race is to look for efficiencies and continuously optimize every element of how we do business. This article will focus on the area of channel marketing and how having a holistic view of your brand's entire spend is a starting point of enormous power for those looking to make incremental, continuous improvement to their business processes.
If you sell through a complex channel, it's virtually impossible to get a holistic, real view of your incentives programs results. The independent nature of the channel creates a significant lack of visibility to sales and promotional activities and their respective results from the dealer to the end consumer, especially if 30% of more of your sales are to “long tail” or non-national retailers. The solution is to have your programs built out virtually in a way that mimics the structure of your channel. Having a virtual build of your channel structure and the visibility this brings is the foundation to successful modelling, experimentation and refinement of future programs.
As long as your programs are being built out to mirror your channel structure, this is a great time to make sure all SKU identifiers, serial numbers, dealer names and other pertinent information are being correctly entered into the system. By doing this, you are paving the way to more valuable reporting once your programs have gone live.
We frequently audit old program data for prospects and clients, uncovering inaccuracies and vulnerabilities that are rooted in this simple understanding of “garbage in, garbage out” where reporting is concerned.
Here's An Example:
To illustrate, here's an analog of a reporting challenge we see all the time. Let's say that you as the manufacturer have a small regional chain you sell to called Al's Tires. (I made this store name up, but if you're out there Al, I hope you don't mind!)
If your program is built on a single software platform that mirrors your channel, Al's Tires can be set to pop up as a drop-down selection option for every type of claim being entered from co-op, sell through allowance, SPIFF or at the consumer rebate level. Each person entering any of these claims simply selects Al's Tires from the list and you have clean data in your report.
On the other hand if your programs are run across multiple systems and the channel has not been properly built in those systems or, even worse, you're still using paper claims, here are some of the ways Al's Tires is likely to show up in your reporting:
- A1 Tires
- Al's Tires
- Al's Tyres
- Al Tyre
- Al Tires
- Al Tyres
- All Tires
- All Tyres
- Al's Tire's
No exaggeration: this is a very typical, very realistic scenario with these same types of data entry errors happening across every single data point in every program. Consider now the quality of reporting you receive with inaccurate SKU numbers, sale price, claim amount and any other reporting data that is important to how your company makes decisions. You can see how this one simple problem can really throw off your center of gravity when it's time to plan future campaigns, new product decisions, and deciding on new dealer territories.
Vulnerability of Multiple Systems
Let's face it: the future of smart strategy is in big data and part of what is going to make us smart is not just knowing and understanding was has happened with our programs, but rather beginning to spot important points of interrelatedness. Having access to all of the data around each incentive allows us to start drawing inferences as to what the best use of our promotional spend is going to be.
Here's an example:
There is a consumer rebate claim in your software platform for a set of tires that the claimant purchased for the family's luxury SUV. A related claim also exists in the system: the salesperson that sold the tires to the consumer received a SPIFF of $23 on the deal. The dealership where that salesperson work has really been maximizing their available co-op dollars this past quarter and had been experimenting with some media buys promoting that particular SKU.
If you were running your rebates, sales incentives and co-op programs across three different specialized applications or three different specialty providers, it's nearly impossible to begin to connect the dots between how your co-op and sales incentive dollars have influenced this sale. If you are running a paper-based, mail in rebate campaign you are also missing the opportunity to learn more about this consumer and build out future remarketing opportunities with them!
Consider the implications of knowing that the data in your reporting is solid.
Could your company soon be test-modelling programs prior to launch using predictive analytics? With your enhanced visibility into your sales channel you can keep an eye on data such as transactions and run rates in real time but, more importantly, you can start to lean harder and with more confidence on your data to guide the way to ever-improved programs and profitability.
A lifelong technology entrepreneur, Jason Atkins is the founder and CEO of 360incentives. 360incentives is the world's first integrated incentive software platform, allowing brands to run spiffs, rebates, co-op/MDF, and sell-through allowances all processed and paid with 100% audit and powerful analytics to predict what to do next. For more information, visit: http://www.360incentives.com.