We usually see discounts offered on items at a store or while shopping online.
These are incentives offered to customers before purchase (buy one get one) or during a purchase (10% above $36) on reaching an eligible amount.
But do you also know your retailers or wholesalers also get incentivized by their manufacturer or supplier in a certain way?
In the B2B landscape, it is called rebates. Offering rebates is a common practice; we see this in industries like retail and e-commerce, though it's not confined solely to these sectors.
In this blog, we will dive into rebates, how rebates are managed, and understand why we created a software category for it.
What is a rebate, and what does rebate management software do?
A rebate is a form of incentive offered to businesses by their suppliers or manufacturers after meeting agreed-upon targets of selling goods (by values or volumes). It can be in the form of cashback, cash reduction, or refund that is paid retrospectively to drive growth in the business and foster business relationships.
Typically, there are two types of rebates: customer rebates and supplier rebates. Both of them only differ in how different entities look at it. If a supplier pays rebates to its customer, it is a customer rebate. A customer calls it a supplier rebate while claiming it from a supplier.
The type of rebate doesn’t matter as much as managing it does. It can be complex to manage rebates for multiple parties if done manually. It can also lead to significant errors in the form of overpaying from suppliers or underclaiming from customers.
Rebate management software helps automate the entire process, from creating rebate programs for customers to rebate payouts. It removes the risk of error involved in the manual calculation and helps match rebate accruals against the actual sales made.
Customers can easily claim rebates, and suppliers get to see each rebate performance on a single intuitive dashboard. A good rebate management software is also capable of identifying fraudulent transactions, helping companies avoid unnecessary losses.
Why did we create a rebate management category on G2?
Rebate management is increasingly becoming popular across various industries. To name a few, retail, manufacturing, building material, automotive parts, pharmaceutical, etc., are the most sought-after industries to use rebate management software in their business.
While rebate as a concept dates back to the 19th century, rebate management was always practiced in the industry manually.
Usually, the revenue and finance departments of the company would spend hours calculating rebates and making paper-based rebate agreements. As a consequence of this, the partners would always face issues getting their claims refunded on time.
The traditional method of managing rebates was broken and never a profitable strategy for the company. Instead, the businesses would always end up incurring losses due to inaccuracy and overpayment.
However, with the inception of rebate management software, the entire process of creating, managing, and processing rebates was streamlined. They are no longer manually calculated, and software would create rebate agreements for partners with unique rule-based conditions for each agreement.
As the market for rebate management software continues to grow, G2 also acknowledges that having such a software category is no longer a choice; it’s a must.
At present, G2 already has categories such as Loyalty Management Software, Rewards and Incentives Software, and Trade Promotion Management Software that help businesses incentivize their customers and boost sales.
The software products in the rebate management category are also present in Revenue Management Software, Partner Management Software, and Channel Incentives Management (CIM) Software categories. It means that rebate management solutions are also capable of catering to the other needs of the customers, such as revenue management, partner management, etc.
The addition of the new software category is a big win-win for G2 since it would expand the capabilities of G2 buyers and vendors looking for ideal rebate software.
Criteria to get included in this category
Every category on G2 has some inclusion criteria that a software has to qualify to get included in that category. These inclusion criteria are a reflection of the core features of the software.
Below is a list of features of the rebate management category that software vendors have to refer to while requesting to get added to the category.
- Create rebate program: This software must be able to create rebate programs for their customers and define eligibility criteria and terms for each program. The software also should have the ability to track and scale these programs as and when required.
- Track rebate process: The software must be able to calculate rebates as per program rules and transaction data. It also involves calculating complex tiered rebates. It should also provide customers with an easy-to-use interface to claim rebates.
- Process rebate payment: After the final calculation of rebate, the software should have some capacity or must be able to integrate with payment processing systems to facilitate the processing of rebate payments.
- Analyze rebate performance: It should generate detailed reports and insights to monitor the progress and effectiveness of the rebate program to make informed decisions and improvements on the existing program.
The future of rebate management software
The rebate management category has over 25 products as of now. Moving forward, it will attract more software vendors as the industry starts seeing the value of this software.
Users will actively start implementing, using, and reviewing this software on G2, and user-generated content will help vendors analyze competition and help them in their marketing efforts.
Additionally, they will also be able to gain insights into product experience from real users, which will help further software vendors in product development and improvisation.
Learn more about how trade marketing helps connect B2B businesses to consumers.
Edited by Jigmee Bhutia
by Priya Patel
by Blue Bowen