How do we automatically process & verify thousands of product rebate claims?

Client Background

The client operates in an industry where increasingly fierce price competition is the norm. The industry is known to have suppliers / competitors that make use of predatory pricing strategies – discounting products up to 40% to attract customers by undercutting their rivals. Products were originally priced in excess of $20,000. Our client determined that without a discount on the products, they would lose market share; however the company was reluctant to drop prices to the competitors’ level.

The solution was for regional managers to negotiate a discount or rebate in order to retain select existing customers. These specific customers would pay the client full retail price and then submit a claim for the item specifying who they sold it to, the selling price, and the date of sale and invoice number.

Key Challenges

The rebate program submissions were most commonly submitted on a monthly or quarterly basis via Excel. These spreadsheets would often contain more than two thousand items that would require verification from the regional manager. To save time, the regional managers implemented a ‘spot check’ system, which meant claims were checked intermittently to ensure they met the requirements of the program. Much of the confirmation was based on notes they had made and their own memory of the rebate agreement.

The subjective nature of the rebate negotiation resulted in inconsistency among the sales from region to region. Additionally, the lack of precision of the rebate payments was also an issue as there was not a firm or comprehensive system in place to verify the claims. Seeing as sales managers were not able to recall certain individual negotiations, the client worried they were overpaying rebates to ineligible customers.