August 15 by Michael Carrell
Across all industries, such as manufacturing, technology, software, healthcare/life sciences, consumer packaged goods, and financial services, enterprises are driving growth by adding subscriptions to the blend of business models they offer. To manage the complexity of the full spectrum of blended business models, companies start by automating middle office processes. Automation of business processes like quoting, contracting, ordering, fulfilling, invoicing, and renewing, improves revenue generation; reduces the cost to buy, sell and deliver; reduces risk and improves business agility. If you are fortunate enough to have automated across all your channels quoting, contracting, and revenue management processes, you are operating within a feature-rich Quote-to-Cash application footprint. By automating these processes, you have put controls in place – discount thresholds, approvals, etc. These controls are important and necessary, but they do not always provide the impact or give you the optimal business outcomes. Simply put, you are not tapping into the full potential of middle office Quote-to-Cash business transformation. While the controls are vital, you need to fundamentally change the behavior of the user to drive the desired outcome. So what changes the behavior of the user?
There are a variety of ways to change the behavior at the point of executing a task.
There is a whole series of things at the point of executing something that can change the behavior of the user. For example, imagine a seller puts a proposal together and at the point of quoting, you affect the behavior of the seller by illuminating their compensation. The seller can see in real-time how a change in quoting tactic can affect their compensation. This is a powerful way to drive a better outcome for your enterprise.
By leveraging incentives across all your sales channels – direct sales, partners, e-commerce websites – you’ll drive better outcomes by optimizing price, margin, and deal size for your enterprise.
Flawlessly Execute Optimal Promotional Campaigns for Subscriptions
Offering promotions goes beyond the obvious pricing/discounting at the time of quoting to encourage a customer to buy. Of course, that is a very important capability of a Quote-to-Cash solution, because when you set the price, or offer a discount, that establishes the maximum or ceiling price you’ll be able to command. A more sophisticated way to drive buying behavior is to offer a promotion.
A promotion could be a flat amount, tiered amounts, quantity-based, or amount-based, and all promotional programs will have a time-frame of applicability. You should be able to create one blanket promotion, or customized promotions per region or collections of accounts. Plus these promotions should be leveraged across any of your selling channels: direct sales, partners, e-commerce websites. You’ll need a system to manage the creation and execution of the promotional programs, manage the approvals and exceptions, and the analysis of the results, costs, and benefits including performing A/B testing, and make on-the-fly adjustments to optimize the yield on each campaign.
• Increasing customer lifetime value: Promotions can increase customer loyalty, and create target upsell and cross sell opportunities for sellers.
• Increasing revenue and growth: Various promotional strategies enables companies to increase deal size and to promote high-margin products.
Manage Rebates with Flexibility and Speed for Subscriptions
Promotions drive behavior during the initial buying cycle. Rebates may be thought about at the beginning of the buying cycle, but they tend to have more influence with ongoing customers, where product offers with long customer lifecycles, or recurring and ever-increasing volumes of business transactions are your company’s goal. Most people are familiar with rebates for physical goods typically used in industries like consumer packaged goods or manufacturing/industrial equipment, but it’s equally behavior-driving to offer rebates in subscription-based or usage-based online business services. For example, for each 100 new users who activate on the Software-as-a-Service (SaaS), the buyer receives a rebate.
Like promotions, rebates drive optimal revenue generating behaviors across multiple channels including direct sales, partners, e-commerce websites.
You will efficiently grow your business when you streamline rebate management, simplify rebate processing, and recommend rebate programs to your sellers, partners, and ecommerce customers – all while – mitigating revenue leakage. You’ll need a way to administer complex rebate programs with ease including setting-up eligibility and benefits in one central location. You’ll have to be able to create, update, or amend fixed amount or tiered rebates, based on revenue, volume or performance. And to keep your customers, partners and your finance department happy (and stay compliant in your financial reporting), you’ll have to be able to calculate and process payments with speed and accuracy including rebate accruals, actual payments, and retrospective calculations.
Leveraging incentive technologies will provide positive business outcomes including:
• Eliminating manual processes: You’ll manage rebate programs in one central location. Because rebates integrate with approval workflows, you’ll prevent errors and comply with policies.
• Providing insights into program performance: You’ll be able to track and evaluate program performances and ensure alignment with business objectives.
• Transforming top-line growth: Your enterprise will increase deal size and cash flows while preserving your company’s profit margin.
As you move into offering subscriptions as part of your portfolio, or as you shift to improve how you sell, deliver, and manage subscriptions, ask yourself does my Quote-to-Cash platform combine commercial process automation with behavior applications, including promotions, sales compensation, and rebates to align and drive revenue-winning behaviors across buyers and sellers?