How has channel incentives “claiming” survived decades of process reengineering and years of scrutiny from six-sigma black belts? Claiming for channel incentives remains the standard practice in the marketplace. It puts the onus on the channel partner to submit a “claim”, or a request, to receive a rebate or incentive payment such as a special-pricing debit.
However, claiming is the consummate non value-add activity, the type of activity that’s the poster-child for process improvement efforts. Claims not only require manual effort on the channel partners’ part to restate what should be obvious to the supplier (how much they sold), but it requires manual processing by the supplier (or the costly out-sourced service firm of their choosing). Not to mention the wasted effort on dispute resolution. During higher-growth eras this type of inefficiency could be tolerated, but now it is clear that leading companies are recognizing that the time has come for a “claimless” incentives structure.
By collecting and accurately processing POS data in a timely manner, leading suppliers are moving toward claimless incentive payments. This best practice entails automatically calculating the rebate, special-pricing debit or other incentive and pro-actively issuing payment to the partner. Monthly statements are provided to channel partners detailing the sales volume and the resulting payment (like a bank statement). On an interim basis, as frequent as daily, performance scorecards are provided to ensure continuous communication regarding sales activity.
The “claimless” process leads to more accurate and timely payments (days rather than months), 60% – 80% less manual intervention, and higher partner loyalty ratings. With the proper system support, exceptions can be handled on a timely and efficient basis at a far lower cost than traditional out-sourced services.
http://www.infonow.com/channelincentives/
