Rebates can either be your best business friend or a time and revenue killer. That’s why we’re already looking into the rebate and channel management trends that will shape 2025. Mike Slavin, Business Consultant at Vendavo, unpacks the strategies businesses need to stay competitive, including how to take charge of trade partner relationships, leverage flexible rebate programs, and drive efficiency with robust software tools.
As businesses prepare for 2025, the economic landscape remains a mix of opportunities and uncertainties. Continued global shifts, evolving trade relationships, and the rise of advanced technologies mean strategies that worked in the past may no longer be enough.
Companies need to rethink how they manage relationships, optimize programs, and leverage tools to stay competitive. Let’s take a look at four critical trends shaping rebate and channel management in the year ahead, from tackling economic unpredictability to embracing AI and analytics.
1. Continued economic uncertainty
Economic uncertainty was a common theme throughout 2024, and it will continue in 2025, with a lot of factors at play. The new U.S. administration could bring significant policy changes:
- Will new tariffs impact trade dynamics?
- How will ongoing global conflicts evolve?
- What will happen to interest rates?
- How might shifting alliances and trade partnerships impact global supply chains?
The conversation around a global recession remains divided. Looking back, some experts anticipated a broad recession in 2024, while others suggested slowdowns confined to specific industries.
Now, as we look to 2025, the outlook has shifted to cautious optimism. Many forecasts are predicting continued economic growth – in the US maybe a 2% GDP growth with Europe maybe 1% – in the coming year.
2. Creative new uses for off-invoice programs
In 2025, forward-thinking businesses will find new and creative uses for off-invoice programs. Companies now have a greater understanding that rebates and off-invoice programs are a low-risk way to drive customer behavior. They know they need this to put teeth into their policies with their customers and suppliers.
In addition, businesses will continue to understand that one-size-fits-all approaches are no longer going to apply to these programs and that they need to be flexible. If you can adapt, you’ll stay ahead of uncertainty and unpredictable markets.
3. Taking charge of trade partner relationships
Vendavo surveyed 300+ CFOs and general managers at manufacturers and distributors in 2024 and learned a lot about what’s working and not working in rebate management. Respondents report rebate programs are widely effective but challenging. Increased revenues from these initiatives were reported by 86% of respondents in North America and 78% in Europe, and 85% say their customers love the programs
To that end, businesses are going to want to take charge of their trade partner relationships. If you’re a distributor, your trade partners are your vendors and your customers. If you’re a manufacturer, that’s your customers.
Rebate program usage has traditionally been reactive, with a lot of businesses forced into managing rebate programs because their key suppliers have issued them. So, they have to be able to manage the program to take advantage of what their suppliers are doing. On the customer side, there appear to be more cases where people are dealing with vendor programs versus customer programs.
Rebate automation is key. More than half (51%) of respondents report they rely on an in-house application or manual processes like spreadsheets and email to manage rebates, even though purpose-built automation eases the administrative burden and lowers compliance risk.
Businesses with robust, flexible rebate channel management capabilities will be able to dictate terms, so we’re likely going to be seeing more of that in 2025. Those that want to stay on top of rebate management will also need robust tools to support them.
Learn more about Vendavo’s Rebate & Channel Manager
4. Increased use of AI & analytics
There will be an increased use of AI and analytics in the rebates and channel management world. We’ll likely see usage of new and rebranded AI-driven analytics tools increase. That means rebate and off-invoice program managers will spend more time analyzing what’s working (or not working), as well as finding new opportunities to expand their rebate channel management programs. That could involve using some AI to find where the opportunities are. Some business will want to do rebate forecasting as well.
All these actions will require robust software – like Vendavo’s Rebate & Channel Manager, which is AI-driven – to help identify those opportunities for growth.
Where to Go in 2025
There are always areas for improvement in your rebate programs. Take inventory of what you’re doing with your off-invoice programs in the new year. Consider:
- Are there untapped opportunities to expand or refine your programs?
- Do you have rebate programs consistently across all suppliers, or are there gaps?
- Where can you make changes to improve efficiency and buy-in?
- Are your programs aligned with your broader business and sales goals?
- Are you using the right tools, systems, and data to optimize program performance and track ROI?
It’s about taking charge rather than reacting, and being proactive when it comes to rebate and channel management. Companies with the right flexible tools can go to their suppliers and say, “Look, instead of me asking for better prices all the time, give me some programs that will tie in with what I’m actually doing.”
That agency is going to be the important thing.
How Vendavo Can Help
Vendavo has been powering the profit transformations of global manufacturers and distributors for more than 25 years. A successful profit transformation requires unified pricing, selling, and rebate management – and that’s what Vendavo does best.
Ready to start your profit transformation with AI-powered solutions you can trust? Reach out today to request a demo or speak with an expert about your business needs.