Build The Best Instant Rebate Programs

Here’s the problem with a lot of channel marketing incentives; they unintentionally end up creating adversarialism between business partners who truly need each other to succeed.  In recent years, sell-through allowances (STAs) have been a hot button issue of this type.

Very similar to STAs, you have instant rebate programs. On the surface they are very different because the retail price of the item is reduced right at the till and they have the front-facing appearance of the entire incentive being given to the consumer (which it often is).

What makes these two similar is that both instant rebates and STAs create the same problem for the retailer: they are out of pocket until they get paid back by the manufacturer or distributor.

To complicate it further, in the appliance world, for example, the manufacturer typically only pays 70-80% of the rebate to their partner and even then, on a very long payment cycle which could be quarterly or even longer.

So, as a channel marketing professional, here’s your challenge: you have a program that creates a bit of friction between you and your partners, but you still feel compelled to offer instant rebates because consumers love them.

What’s good for driving consumer purchases should naturally be good for your retailers too, so let’s have a look at how to fix this.

Create a quick, consistent pay cycle.

Change the way that your claims get entered, processed and paid and you will benefit from a simple principle of behavioural economics – your partners are engaged with your brand more often, therefore you are top of mind with your partners and therefore they sell more of your products.  When you create a culture of more frequent claim entry and payment, you obviously benefit by having happy partners but where you can benefit even further is by the increased visibility into the performance metrics of your own campaign.  Watch how it’s working and where it’s working and make little tweaks on the fly.  See?  You’re crushing it, now!

Consider user experience.

Your retailers don’t want to be doing a big burn of human resources in order to be entering claims more often, but they do want to get paid more often.

So, set program parameters to include more frequent claim entry, but make that claim entry as simple as possible. Then, re-examine it and simplify again.  Offer them simple ways to enter claims via the Internet, either on a per-transation basis or via the uploading of an export from their POS system; whichever is easiest for them.

Provide these individuals with visibility into what they’ve been paid.

Just as you benefit from having real-time reporting into your campaigns performance, you also benefit from providing real-time claim payment data to your partners.  They can find information quickly and easily creating less of a time-drain on them and you. 

Pay fast.

I know we say this about all programs, but it’s simply because it’s equally true for all programs. You are trying to change people’s behavior, you need to show the way by changing your behavior.  If you pay your sales incentives out quickly, you fix one of the main issues that retailers have with instant rebates by getting the money back into their pockets faster.

So here’s the big idea: change the behavior of your partners’ frequency of submitting claims, which enables you to change payment frequency and put yourself top of mind with them.

When you pay quickly, you will change their behavior.

Fast filing/reporting equals shorter path to valuable campaign metrics. Want to discuss this in more detail? Let’s talk.


Kevin Martin 360 IncentivesKevin Martin is a Sales Channel Incentive Specialist at   Connect with him on LinkedIn right here.