Consumers prefer more online transactions today. As eCommerce volume grows, so too does the demand for packaging products. To meet rising expectations for high-quality, affordable, sustainable packaging solutions, the packaging industry must be not only agile, but innovative.
This is especially true when you consider the current business landscape for most packaging manufacturers. Erratic markets, supply chain disruptions, fluctuating material costs, and other macroeconomic challenges are expected to continue in 2023 – and this volatility is a threat to enterprise profitability and stability.
One proven way for packaging manufacturers to grow revenue and cement lasting buyer-seller relationships is with rebate programs. Research shows companies that have a successful rebate program will drive an additional 2-10 percent in incremental sales. Meanwhile, companies that don’t have successful rebate programs will lose millions of dollars of earned rebate revenue every year. But rebate programs can be complex to manage and for this reason, many organizations struggle to take full advantage.
Also read: Best Practices for B2B Price Rebates and Incentives
The promise of rebates in packaging
Large volumes of packaging product create production, sales, and logistics efficiencies which can then be passed on to the customer as discounts. Problems arise, however, when a customer promises to purchase a certain volume at that low price, but then fails to do so. Instead, rebates should price on actual rather than promised purchases. A well-executed rebate program rooted in performance incentives (not assumptions) can direct preferred buyer behavior and grow organizational profitability.
Genpak recently discovered this to be true.
Food packaging manufacturer, Genpak improves customer satisfaction with rebates
Genpak, a top North American manufacturer of food packaging solutions had a rebate program, but it was managed manually and not integrated with key AP systems. Accurate, timely reporting was a challenge, so was issuing timely payments. All that changed after they implemented Vendavo Rebate & Channel Manager.
Vendavo Rebate & Channel Manager allows organizations to simplify the execution of complex agreements and power smarter rebate management. It automates the entire rebate and channel process from deal creation to accruals, payment generation and end-to-end reporting and calculates and analyzes rebates and margins.
Genpak has a long history of delivering quality solutions at the best price. They knew they needed to resconsider their rebate programs when they discovered the systems they were using to record revenue and trade spend were no longer providing accurate or consistent data. Due to the inaccurate and inconsistent data, theystruggled to consistently make rebate payments on time. They decided to modernize their technology stack.
By integrating Vendavo Rebate & Channel Manager with existing databases and AP systems, Genpak now efficiently processes invoice deductions, maintains and tracks their trial balance, provides POD end-user related pricing, accesses sales and accounting reports, and automatically cuts rebate and marketing checks to customers. In short, the company is better able to achieve their mission statement and deliver a superior customer experience with greater profitability.
Rebates are a great incentive for performance. There are several different types, so you’ll want to choose the one that best suits your organization’s goals. Get familiar with the options along with common pitfalls, and the best practices behind every profitable rebate management strategy in the eBook, The Keys to Building a Profitable Rebate Management Strategy.
Read the full Genpak case study here.