Meet Sourcing and Procurement Expectations for Net Spend Rebates as a Tech CEO
Source: Meet Sourcing and Procurement Expectations for Net Spend Rebates as a Tech CEO, 13 September 2022, Christine Tenneson
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The prevalence and usage of rebate programs is increasing at a rapid pace. Enable’s research found that 2 in 3 manufacturers offer annual rebate programs to influence long-term behavioral changes and for distributors, rebates make up a significant portion of their net profit, ranging from 60 to 100 percent.
Sourcing, procurement and vendor management (SPVM) departments are increasingly involved with rebates. But they are no longer only part of large enterprises. With small and midsize businesses (SMBs) also having these functions, customers across all industries and sizes are now seeking rebate offerings as part of their request for proposals (RFPs) from solution providers. Therefore, tech CEOs are being prompted to assess their rebate strategy as per the Gartner report.
Gartner estimates that 90% of organizations with revenue under $250M do not offer a customer rebate program. Nonetheless, for solution providers who utilize them, rebates can serve as a significant differentiator and an effective means of enhancing customer acquisition and retention.
According to Gartner, solution providers must now make a choice on offering customer rebate programs — how broadly if they do, and if not, they must be prepared to articulate to customers why a program is not offered. When competing against larger providers, it is important to recognize that they may also offer a rebate program.
Download the Gartner report for insights into:
- Managing expectations: when to offer or not to offer a rebate program
- The benefits and risks of a customer rebate program
- Ensuring your customer rebate program is market-competitive
- Structuring and designing customer rebate programs