Press Releases

Latest release from Syncron improves bonus and rebate management, improves visibility of pocket margin

STOCKHOLM, Sweden – 22 January 2015 – Today, Syncron International, an aftermarket inventory optimization company, announced enhancements to its Global Price Management software, including bonus and rebate management, enhanced competitor pricing methods and target-cost optimization.

With enhancements to bonus and rebate management, Syncron users will have greater visibility of the pocket price, which is the final price for an item.  This price includes all discounts and promotions, as well as end-of-the-year rebates and bonuses provided to the customer.  This price represents what the company will have ‘in-pocket’ after all rebates and bonuses are applied.

“The businesses we serve often focus on the impact of discounts on the net margins. Equally important, and often underestimated, is the possibility to maximize your pocket margins by sound rebate/bonus management,” said Per Almberg, Product Manager for Global Price Management at Syncron. “As rebates and bonuses are often driving sales by providing incentive for customers to purchase more products, especially towards the end of year”

At the year end, it is common for companies to enter into contracts with customers to incentivize loyalty and spending.  These contracts provide a bonus or rebate if the customer purchases a targeted amount. These bonuses and rebates can impact the pocket margin, which is the actual profit when all bonus and rebates are paid out to the customers at the end of the year. Without visibility to these off-invoice adjustments, companies mistakenly believe that products are generating higher margins.

“Rebates serve as a great incentive for customers to reach higher levels of spending before the end of the year,” said Almberg. “Our software will now indicate whether a bonus or rebate has been achieved or estimate the likelihood of achievement based on the customers’ purchase patterns.”

To further support the client’s need for visibility of year-end rebates and bonuses, Syncron added a ‘What-If’ simulation tool for off-invoice adjustments. This will enable price analysts to perform analysis of what the effects will be on the pocket profit and margin if a contract with new rebate and bonus rules is signed with a customer for the next year.

In addition to bonus and rebate management, Syncron added advanced competitor pricing functionality to address a common problem when applying competitor pricing logic – lack of data. When a competitor reference price is not available, the price management software will apply a price using the technical specifications of the product, like horsepower or length.

When applying different types of value based pricing logic, Syncron calculates the optimal price based on the value drivers applied for that segment of products. However, there are cases when this approach does not allow the user to achieve the expected margin level because the cost is too high.

Syncron now enables users to calculate a target cost based on target margins and prices. Cases when the cost is higher than the calculated target cost can then serve as guidelines for the purchasing department. The purchasing department can use this information to find an appropriate alternative. Any cost reduction under these circumstances will have a direct impact on profit.

Syncron also added analytics to evaluate and set the right price levels – to avoid cross boarder trading and to cope with special local conditions. This functionality is useful for specific markets in relation to the global base prices.

To improve the usability of the application, tooltips with useful information about products, customers, orders, and prices were added.

With these enhancements, Syncron expands its service to the aftermarket, which is an area of expertise for the company. Syncron customers using version 14.2 are already benefiting from these enhancements.