Professional Documents
Culture Documents
New delivery methods are shifting how companies consume hardware and software -
shifting from CapEx to subscription. Companies need to encourage different sales
behaviors in their partners.
Relevance and knowledge are more important in tech buying decisions. Partners need to
move from selling features and functions to selling solutions.
In order to penetrate new markets, tech companies will need to add new partners to the mix
that have specific market expertise and skills.
Accenture contends that a combination of these trends will likely require tech companies to
increase incentive spending further to influence behaviors and drive revenue in the channel.
Bottom line: as much of 10% of channel partner incentives are overspent or generating
insufficient ROI.
Three common factors are driving incentive effectiveness and overspending: Complexity,
Decentralization, and Infrastructure Limitations.
Complexity
Ad-hoc collection, collection and use of POS (point of sale) channel data
Insufficient analytics
This limits visibility into ROI and insight into strategic fit and effectiveness.
3. Sizing the Opportunity
Most companies find cost savings / revenue growth opportunities in 5 areas:
1. Partner compensation - commissions / bonuses based on hitting targets;
2. Deal registration programs - partners registering individual sales opportunities for
additional benefits;
3. Market Development Funds (MDFs) - Unallocated funds provided to partners to cultivate
new markets;
4. Cooperative (Co-Op) advertising - joint advertising or marketing efforts; and
5. Sales promotions - including incentives used to promote new products, move out excess
inventory or end-of-life product, etc.
Accenture estimates benefits of $24-$72MM over 3 years for a typical high tech company with
annual sales of $10B that generates 80% of its revenue through indirect partner channels.
4. Path to Optimizing Incentive Spending
A four-step process: Plan, Execute, Evaluate and Monitor/Reporting.
Plan
Identify clear objectives
Design overall channel incentive strategy, modeling / budgeting
Critical capabilities
o Target Management - individual partner performance targets
o Incentive Modeling - program parameters and expected uplift
o Product / Offering Maintenance - leverage product and offer data for accrual and
payout
Execute
Develop clear, intuitive programs that are easy for the partner community to understand
and use
Process fundamentals
o Setting up business rules
o Enrolling partners in the programs
o Collect, cleanse, normalize and enrich partner POS data
o Distributing incentive funds
Evaluate
Ensuring payments are timely and accurate
Identify and eliminate channel incentive overpayments
Activities include:
o Validating partner compliance with program
o Manage overspending from duplicate payments, ineligible stocking of incentives,
or fraudulent submissions
o Calculating ROI and determining effectiveness
Monitor and Reporting
Key capabilities
o Sales performance reporting - partners and sales management evaluate across the
channel in detail.
o Operational reporting - sales ops performance
o Management reporting - aggregate reporting for senior leadership
5. Getting Started
A six-step process to get going:
1. Decide on - and explicitly state - your indirect channel incentive strategy
2. Define a common channel spend taxonomy
3. Consolidate and prioritize "voice of partner" input
4. Create a channel waterfall and channel sales use case inventory
5. Identify hypotheses for optimizing channel spend
6. Create a partner total rewards statement
Conclusions
Up to 10% of channel incentives are overspent or generating insufficient ROI. This
translates into roughly $25 - $75 million over 3 years for a typical large, $10B tech
company.
Many opportunities exist to improve the ROI of incentive spending, but companies needs
to think and act differently.
Knock down intra-organizational barriers that drive inefficiency and waste
Reduce complexity
Expected results
o Improved ROI
o Reclaim millions each year in overpayments
o More eff ectively leverage partners to drive revenue growth
Para las empresas que tienen como objetivo el crecimiento existe un gran potencial de las ventas
a través de canales indirectos para expandir el alcance de ventas de una empresa, sin embargo, la
mayoría de las empresas tienen problemas para expandir sus ventas a través de los canales.
Los programas de incentivos deben estar dirigidos a los mercados con mayor potencial de
crecimiento. Para esto es necesario contar con información de la segmentación de los clientes y
conocer el papel que juegan los canales con ellos. Segmentar le mercado consiste en dividir la base
de clientes con base en diferentes criterios para identificar los diferentes mercados objetivos.
¿Por qué resulta difícil obtener crecimiento de revenue, nuevos clientes, nuevos mercados a través
de los canales? Se necesita tener una visión clara de la segmentación del mercado para conocer
quienes son los clientes finales de la empresa a los cuales le venden los canales y a que vertical de
la industria pertenecen. Es necesario establecer un sistema de clasificación de los canales para
crear estrategias de incentivos con base en sus fortalezas y debilidades.
Para maximizar la efectividad de los incentivos se recomienda los siguiente:
Calcular el ROI con base en el gasto de los incentivos
Agilizar los pagos de incentivos
Asegurarse que los pagos sean precisos y sin errores
Obtener visibilidad en tiempo real del desempeño de los programas de incentivos
Probar y modelar los programas de incentivos con información histórica.
Cut through the complexity smarter incentives drive results Dan Hawtof
¿Qué se deben hacer los proveedores para maximizar la participación de los canales en los
incentivos?
Reducir los procesos manuales. El 80% de la administración de los incentivos a canales se hace de
manera manual, es decir a través de hojas de cálculo. Al mismo tiempo que los incentivos ofrecidos
son altamente complejos. Se debe transitar hacia el uso de una plataforma flexible que se encargue
del calculo y administración de los programas de incentivos.
Incentivar los comportamientos que conducen a ventas. Los comportamientos más importantes
para la generación de ventas observados son, generación de leads, registro de ventas futuras,
planeación conjunta, creación de soluciones. Usando la plataforma de incentivos se pueden ligar
los comportamientos y las ventas para hacer un incentivo más completo.
Simplificar los incentivos. Mientras más sencillos sean los incentivos, mayor es la participación
de los canales.
Sales Promotion Models Robert C. Blattberg, Scott A. Neslin
En este artículo se habla de los diferentes modelos de promociones la teoría que hay detrás de cada
uno de ellos y los métodos que se usan para medir los resultados obtenidos a través de estos. Se
definen y se describen los principales tipos de promociones y se plantean modelos matemáticos
con los cuales se pueden representar, así como las principales variables de interés detrás de cada
modelo.
Los primeros intentos para medir los efectos de las promociones se hacen usando modelos
estocásticos en los cuales las ventas base (nivel de ventas en ausencia de una promoción) se
determinan con un sencillo modelo estocástico, usualmente una modelo Markoviano.
Hay dos tipos de data que se usa para analizar las promociones de ventas: ventas por periodo y
ventas en punto de venta. Las ventas por periodo representan los envíos de productos a un área del
mercado de manera periódica ya sea semanal, mensual, trimestral, etc. Las ventas en punto de
venta es la compilación de las ventas realizadas en las tiendas y dan la posibilidad de analizar
factores como lealtad a la marca, repetición de compras y segmentación del mercado según datos
demográficos.
En la figura 1.3 se muestran las diferentes maneras de abordar los modelos de análisis de las
promociones de ventas. Existe una principal distinción entre los tipos de modelos que hay estos
pueden ser de tipo descriptivo o prescriptivo. Los modelos descriptivos miden los efectos de las
promociones mientras que los modelos prescriptivos utilizan un modelo descriptivo para hacer una
recomendación normativa a los gerentes en cargo. Los modelos descriptivos estos se diferencian
según el tipo de data que usan. Los modelos prescriptivos pueden ser de dos tipos, cálculo de
decisiones y de optimización. El modelo de cálculo de decisiones consiste en la creación de un
modelo descriptivo con la ayuda de los managers y se utiliza para evaluar una serie de decisiones
a tomar. Los modelos de optimización toman un modelo descriptivo y lo combinan con una función
matemática la cual al ser optimizada se dicta el curso de acción a tomar.
También se habla de los tipos de promociones según la audiencia a la cual está dirigida. Existen
tres actores principales en las promociones: el fabricante o proveedor, el canal o revendedor, y el
consumidor final.
Las promociones hechas por el fabricante y dirigidas a los revendedores son llamadas channel
incentives, promociones hechas por el fabricante y dirigidas al cliente final son llamadas
Incentivos a cliente final y las promociones hechas por el revendedor y dirigidas al cliente final
son llamadas incentivos del minorista, uno de los principales objetivos de los incentivos a
canales es que los vendedores transmitan una parte del beneficio obtenido al cliente final a
manera de un descuento o promoción lo cual se conoce como pass through.
El objetivo del artículo es describir los principales modelos promocionales que existen hasta el
momento según la clasificación hecha en el diagrama anterior.
Section 2 covers descriptive models, and is organized in subsections devoted to coupons, trade
promotions and retailer promotions. The general format of each subsection is to begin with a
discussion of the phenomena that determine the overall impact or profitability of the particular
promotion. We then discuss attempts to model these phenomena. Section 3 covers prescriptive
models. We describe a selection of models that can be applied to couponing, trade promotions and
retailer promotions. Much of the research to date has been descriptive modeling and has been
driven by the availability of data. As a result, the models we review may not cover all the
managerial issues. In summarizing the chapter in Section 4, we will compare the work that has
been done with the work that needs to be done.
In this section, we have reviewed both optimization models and decision-calculus models for
helping to plan and manage promotional programs. Decision-calculus models tend to add realism
and comprehensiveness, while the optimization models tend to be simpler. Since data may not be
available for all the realistic phenomena included in the decision-calculus models, they often rely
on judgment for many of their parameters. In addition, since complex models are difficult to solve
for a single optimal solution, decision-calculus models emphasize testing alternatives rather than
finding a single optimal solution.
Coordinating supply chains with sales rebate contracts and vendor managed inventory
W.K.Wong, J.Qi, S.Y.S. Leung
Una forma en que se puede mejorar el rendimiento de los canales es por medio de la coordinación
de la cadena de suministro. Wong en su artículo demuestra que usando un rebate de ventas en
conjunto con un sistema de inventario manejado por el proveedor (IMP) se logra coordinar la
cadena de suministro.
Se propone un modelo de cadena de suministro de tipo two echelon en donde un proveedor atiende
a múltiples revendedores usando un sistema de inventario IMP que permite al proveedor recolectar
la información de sus ventas, usando esta información el proveedor aplica rebates de ventas. En el
sistema IMP el proveedor determina un nivel de inventario para cada canal con base en el nivel de
servicio al cliente. Una vez definido esto el proveedor se encarga de monitorear y reabastecer
periódicamente a los minoristas para mantener el nivel de inventario definido. Adicionalmente, el
modelo usado está basado en el modelo de newsvendor para tomar en cuenta factores como costos
de exceso de inventario y ventas perdidas. Se estudian dos escenarios: canales independientes con
una función de demanda sensible únicamente a su precio y canales en competencia con una función
de demanda que es influenciada por los precios de los demás canales.
Los resultados demuestran que cuando se combina un rebate de venta con sistema IMP se alcanza
una coordinación perfecta en la cadena de suministro. Analizando los dos escenarios propuestos
referentes a canales independientes y en competencia se concluye que el nivel de competencia
entre los canales influye en la distribución de ganancias entre el proveedor y los revendedores. El
proveedor obtiene mayores ganancias a mayor competencia entre los canales.
Coordinating supply chains is an effective way to improve channel performance. This paper details
how a sales rebate contract helps achieve supply chain coordination. A model in the context of a
two-echelon supply chain with a single supplier serving multiple retailers in vendor-managed
inventory (VMI) partnership is proposed. With the use of VMI the application of the sales rebate
contract since information sharing in VMI partnership allows the supplier to obtain actual sales
data. The proposed model demonstrates that the supplier gains more profit with competing retailers
than without as competition among the retailers lowers the prices and thus stimulates demand.
In today’s global market, more and more companies realize that the performance of their
businesses depends largely on external collaboration and coordination across the supply chain. As
chain members are primarily concerned about their individual interests which may not contribute
to the overall supply chain performance, their decisions may result in an inefficient network system
with problems like high costs, compromised customer service and a weakened strategic position
(Fugate et al., 2005).
Much research focuses on coordination schemes achieving supply chain coordination. The sales
rebate contract is one of the contracts that coordinate the supply chain with one compliance regime,
and channel rebates are widely adopted in the hardware, software and auto industries. (Taylor,
2002). A rebate is different from an order quantity discount as it only applies to items sold to end-
users. However, it is difficult to implement a sales rebate contract in a traditional supply chain
when there are no mechanisms to facilitate the flow of sales information between the retailers and
the supplier.
VMI is an important flow coordination scheme which integrates operations between suppliers and
retailers through information sharing and business process reengineering. Its benefits to supply
chain management have been well documented (Waller et al., 1999; Disney and Towill, 2003).
The scheme allows the supplier and the retailer to form a network structure to improve the
aggregate chain profit while defending their individual interests.
Cachon (2003) also investigated whether the sales rebate contract could coordinate the retailer’s
order quantity and the retailer’s pricing, and concluded that the sales rebate contract cannot
coordinate the supply chain with voluntary compliance as the supplier makes no profit in this case.
Sales rebate is different from order rebate paid for items ordered by retailers. Retailers may
purchase more items than what can be sold due to the encouragement of order rebates, which
increases the holding cost and the end-season surplus goods, disturb the manufacturing plan, and
influence the upstream inventory, ultimately leading to the bullwhip effect (Lee et al., 1997).
A two-echelon supply chain is examined in which a supplier supplies n independent retailers in
the VMI mode. The supplier adopts a periodic review policy to replenish the inventory at a given
base-stock level in each interval. The holding cost of excess stock and the depreciation of surplus
goods are incurred by the supplier and thus the inventory risk is shifted to the supplier. Each retailer
can determine a retail price at the beginning of each period. Assuming that demand is stochastic,
elastic to prices, thus is defined as a stochastic and multiplicative function of the retailer’s price.
Step 1: The supplier specifies wholesale price schemes.
Step 2: The retailers determine the retail prices based on the wholesale price of the supplier and
set the minimum CSL.
Step 3: The supplier determines a base-stock level qi for each re tailer under the given CSL.
The wholesale price contract cannot achieve supply chain coordination in terms of retail price
setting because the supplier has to choose a wholesale price which removes the margin profit
entirely in order to achieve price coordination. In other words, the retailer prefers a higher price
than the one to maximize the chainwide profit. However, higher prices lead to reduced demand,
which results in a smaller amount of chainwide profit. Under the circumstances, a sales rebate
contract is a reasonable scheme for achieving coordination by urging the retailer to increase sales.
The key variable influencing the retailer’s choice of prices is the target threshold in the model.
Hence, the supplier should set a threshold which motivates the retailer to increase sales by lowering
the price.
Supply Chain Coordination Under Channel Rebates with Sales Effort Effects Terry A. Taylor
Channel rebates are important in the hardware, software, and auto industries. Given the narrow
margins of resellers in the computer industry manufacturers and resellers identify rebates as a
powerful channel policy (Roberts 1998).
In many settings, retailer sales effort is important in influencing demand. Retailers can influence
demand by merchandising, doing point-of-sale or other advertising, providing attractive shelf
space, and guiding consumer purchases with sales personnel. If retailer sales effort influences
demand in a multiplicative fashion, then a properly designed target rebate and returns contract
achieves coordination and win–win.
Under a no-rebate regime, the sum of the manufacturer and retailer profit is less than that of the
integrated channel.
Target rebate and returns contracts may be able to achieve channel coordination with arbitrary
profit splitting under demand distributions other than the uniform.
This paper captures a fundamental way that the retailer can influence her demand by exerting sales
effort. Analysis suggests that quota or threshold schemes which are commonly used within
organizations in, for example, salesforce compensation, can be used productively in cross-
organization transactions.
A Framework for More Valid Measures of Channel Member Performance Mark T. Spriggs
Marketing success for firms using an indirect channel often depends on the performance of
downstream resellers.