It simply doesn’t matter what type of market your business operates in, if you aren’t doing everything you can to retain customers, you’re dead in the water. It's just that simple. Customer retention is an essential part of business growth. It’s one thing to capture and close on new opportunities, but it’s something else entirely to retain business for the long-term. With this in mind, I thought I would provide a sample back-end rebate excel sheet for customer retention. The process is simple and straightforward and is ideally suited for B2B sales.
This sample back-end rebate excel sheet has several inherent benefits. First, it’s not a contractual agreement on supply. Customers can opt out of the rebate program at any time. Second, the program provides your company with the right of last refusal. Third, it guarantees customer “buy in” on the plan, thereby assuring your company has immediate information on market pricing. Fourth, it puts the onus on your customer to work with you to retain their business. When they’re confronted with a competitive bid, they’ll immediately contact you to discuss the lower pricing. This puts you in the driver’s seat and protects your company’s gross profit %. We’ll examine each one of these aforementioned benefits in detail.
1. This is not a contract: Your customer doesn’t have to sign any binding contractual agreement. They opt into the program on their own and can leave on their own. This makes it very easy to propose and much easier to manage. There are no liabilities for either party to be concerned about.
2. Right of Last Refusal: As the customer progresses through their rebate program, they accumulate credit which is accrued in the customer’s "bank". This rebate is only provided at the end of the program. If they receive a competitive bid, they’ll call you to match so they don’t lose their rebate.
3. Provides Market Price Data: Once your customer is quoted a lower price, they’ll immediately call you to discuss the lower competitive bid. Why? Simply put, once they’ve accumulated credit within their rebate, they won’t want to lose that rebate. The best of both worlds is to get the lower price and keep the rebate. Since they have the rebate with you, and not your competitor, the customer will want you to match your competitor’s pricing.
4. Improves Customer Retention: The rebate program improves customer retention because it forces your customer to become an active participant in how you manage their account. They’ll continually work with you to discuss market pricing, future demand, delivery schedules and will be more than willing to provide you with insight into market trends.
Rebate Programs are Reward Programs
When thinking of the back end rebate program, think of the reward programs run by some of today’s largest companies. Consumers never sign a contract. Instead, they simply return to the business and continue to purchase. Whether it is frequent flyer miles or free coffees, these programs work and work well. However, in B2B sales & marketing, they work even better. This is because customers will provide you with specific market data about pricing, competitive offers and the general approaches your competitors are taking. Consider the three highlighted BLUE price points in the sample back-end rebate excel sheet for customer retention.
April, June & September: In each of these months, your customer contacts you to discuss a lower competitive bid they received. Your company then has the choice to match the competitive bid or hold firm on price. Your decision to do this rests with measuring the lower price and its impact on your product’s gross profit. If you match, you retain the business and your customer retains their rebate. However, if the price quoted by your competition is too low, then you simply choose not to match and your customer forfeits their rebate total.
Using Back-End Rebate Excel Sheet
All of the BLUE shaded areas are ones you can occupy with your variables. You input your product’s price, the quantity, your product’s costs and your customer’s rebate amount per-unit purchased. The YELLOW shaded area will show the accumulated amount within the “Customer’s Bank”. All other non-shaded areas don’t need to be occupied. The excel sheet will calculate your Gross Profit/Sale, your Gross Profit % (Before Rebate), your Customer’s Bank Total/Transaction and your Gross Profit % (After Rebate)
When using the sample back-end rebate excel sheet for customer retention, be sure to come to an agreement as to the duration of the program. Most importantly, make sure your customer understands that the rebate amount will only be provided at the end of the rebate period. This allows you to ensure that they continue to come back to you and provide you with competitive pricing information. However, the purpose is not to rest on your laurels and force your customer to do all the work.
Running multiple rebate programs will allow you to be proactive when a lower price hits the market. Once it does, call your other customers in advance and provide them with the new lower price. It will show your company is both proactive and aware of what’s going on in your market. Here is the excel sheet:Download Back-End Rebate
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