The global economic outlook is a mixed bag of decline, stagnation and growth, and how it affects your company depends on your region and markets. Distributors must navigate moderate growth while facing persistently high inflation in some areas and a full-scale recession in others. Successful manufacturers and distributors aren’t taking a wait-and-see approach in this complex environment. Instead, they’re redefining their growth equation and driving strategy decisions that increase revenue and profitability amid the turmoil.
Growth is about unifying pricing, selling and rebate management initiatives. According to CFOs of North American and European manufacturers and distributors, growth strategies have shifted to include a healthy mix of strong partnerships, smart pricing and advanced sales and incentive strategies.
In the 2024-2025 Top Growth Drivers Report for Manufacturing and Distribution, CFOs identify their preferred financial strategies for driving growth as enhancing channel/partner programs (60%), rebate programs (56%), price optimization (54%) and advanced RevOps tools and processes (54%). These strategies don’t come without challenges, but with the right tech and a good cross-functional approach, they can be well worth the effort.
Rebate programs are profitable – but often painful, too
Maintaining strong partnerships and implementing win-win incentives to increase purchases aren’t new ideas. Rebate programs are known to be a best practice for driving strategic growth across price, volume and mix. They can encourage specific customer behavior and help build customer and supplier loyalty. 87% of North American and 77% of European CFOs say their rebate programs have increased organizational revenue, and 88% say their customers love them.
The rise of these programs might be surprising and perhaps even a little frustrating for many finance teams. After all, rebates have a reputation for being painfully inefficient. Are the rebates actually working? Are discounts being extended based on purchase promises that aren’t fulfilled? How can you report against the activity accurately? Payouts based on promises made by a salesperson on the back of a napkin are difficult to fulfill on time and impossible to measure. In fact, 61% of finance teams say their program is a mess for these and other reasons.
Easing the administrative burden with tech
It’s well known that finance teams have been slower to adopt automation and AI than other areas of the business. McKinsey’s recent CFO survey found that the primary reason CFOs aren’t automating faster is that they don’t think they can fit the implementation effort in their already-demanding workloads.
A lack of modern technology compounds the problems with inefficiency and inaccuracy common to “administratively burdensome” rebate programs. It also increases the workloads of the finance team members responsible. Just over half of the CFOs in the Top Growth Drivers Report rely on an in-house application or manual processes like spreadsheets and email to administer rebates. And yet, only 18% of finance teams consider implementing AI to be their primary challenge in the next 12 months.
Good data, automation and a layer of AI-fueled intelligence will smooth out many of the wrinkles associated with the financial strategies distributors use today. Sales-, service- and support-driven communication can also reveal important insights and strengthen relationships, but there is no substitute for technology-driven fact-finding, automated updates and AI-powered analysis. With the right tech, you can get a much better sense of partner needs, customer preferences, buying behaviors, market trends and competitive intelligence.
By allowing AI to remove the heavy lift of data analysis, you can make rebate programs and processes more efficient, strengthen sales performance and scale growth strategies across departments for quick, corrective actions.
Finance and sales collaboration
The financial strategies distributors use today require another component: CFO-CRO collaboration. Aligning teams toward the shared goal of growing revenue starts with giving everyone a seat at the table. Focus areas may differ among sales, marketing and finance teams, but the goals should be the same.
Sales and marketing leaders may begin crafting a rebate program that increases purchases and grows market share. Finance focuses on program execution to achieve maximum profitability. What is the program making against costs? How is that being tracked and recorded? Detailed, ongoing transactional visibility is necessary to ensure participant compliance and accurate rebate financial reporting.
RevOps tools and processes will elevate your top pricing and selling strategies, including rebate management. Aligning operations, systems and data to support the entire revenue cycle is table stakes for effective growth.
End the one-size-fits-all response
A volatile global economy is causing distributors to shift their financial strategies from the status quo into a mix of strong partnerships, smart pricing and advanced sales and incentive initiatives. As economic conditions evolve, so do customer behaviors and sentiments. The goal is to have a detailed understanding of these expectations and meet them with a quick, tailored response—there’s no such thing as an effective one-size-fits-all response anymore.
You’ll find the insights you need through good data and collaboration. That doesn’t mean more data — who wants more data, anyway? Instead, leverage the data you already have by leaning on technology that offers predictive and prescriptive actions toward growth and profitability.
Eric Carrasquilla is CEO of Vendavo, a provider of solutions for B2B pricing, selling and rebate management.