5. In this session...

6. 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 A “pay-for-performance” monetary reward

7. Track fund usage across promotions Evaluate program’s profitability Set up complex programs Make promotions visible throughout organization Monitor compliance Process claims Settle payments Reconcile short-pays Manual Error-prone Tedious Administrative Analytical Maintenance

8. Off-invoice discounts Bill backs Lump sums Bill back workbench Payments Deduction workbench Estimated vs. actual fund cost usage Promotional effectiveness Funds Allowance contracts Workflow approvals Cubes PlanGenerate SettleAnalyze

9. Plan promotion Process claims Execute sales Analyze promotion Create a fund Set up a trade allowance for a bill back Settle payment Order Processor Marketing ManagerSuper Sales RepMarketing Manager Accounts Receivable Administrator Credit and Collections Manager Cumulate and process the bill-back Create and invoice sales orders Reconcile customer short-pay with the deduction due Run analysis

11. Promotion planning Funds and allocations Allowance agreements 3 merchandizing events Payment settlement Integration into regular A/R process Deduction workbench Claim processing Promotion analysis Fund details report Actual cost report Analysis view / graphs Trade allowance cube Automatic creation and accrual Billback workbench Reduced administration time and errors Quantified baseline for negotiations Better utilization of marketing promotion funds Flexible incentive setup accommodates multiple promotion forms

13. Trade allowancesCustomer rebates Fund allocation per customer hierarchy, products and events N/A Bill-back, off-invoice, lump sumRebate (=bill-back) ComprehensiveLimited Tool-driven Workbench tool Enabled Focus on promotional agreement management, fund planning and analysis Rebate offers without promotional agreement planning Promotion planning Allowance types Analytics Claim processing Deduction management Customer requirements Workflow-based approval

14. Define Agreement Post Customer Invoices Process Claims 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

15. Define charges Define broker contracts Post sales invoices Process broker claims Broker's fee is a payment to an agent for the service of facilitating transactions between buyers and sellers

17. Key take-aways

18. * 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. Possible solution Offer incentives to reduce return rates of high-volume high-returning customers