Case Study: How Miller Wittman Helped One Client Save $2 Million in Six Weeks

The Miller Wittman team recently completed a project that saved our client $2 million in rebates without interrupting service or reducing sales in any way…all in just six weeks! Here, you’ll learn how we did it as well as some big takeaways you can apply to your own programs.

Some Background on Our Client

Our client is a worldwide brand that sells commercial and consumer products through their dealer network. In this instance, we worked with a large consumer division that was looking to maximize the value of their promotions.

The previous year, we worked with their marketing team on strategies to strengthen their relationship with their channel. Our research on various aspects of their business gave us keen insight into the tools they had available, competitive market conditions, and what motivated and influenced consumers.

Even so, this project had a remarkable turnaround.

The Problem Our Client Was Facing

Our client had been tasked with trying to reduce costs while maintaining sales growth.

They had begun looking at the tools and programs they were currently using to determine: if they were actually helping them accomplish their goals; if there were additional things they could do to encourage sales or cut costs; and, if so, how would they finance those additional programs?

A Simple and Effective Solution

As the Miller Wittman team stepped in, one of the tools we honed in on was their rebate programming — its effectiveness, the return on investment it provided, and whether or not it was actually influencing customers’ buying decisions.

We considered a number of solutions, taking into account what their competitors were doing, their sales by product, and what their channel and sales people had to say.

We embarked on a thorough analysis of all their programs: who they were aimed at, the results they were having, and what was and wasn’t working. Through that evaluation, we identified a particular rebate program that wasn’t bringing the results the company was hoping for…and was costing them millions they didn’t need to spend. What’s more, this program wasn’t influencing sales or eliciting any other positive behavior from consumers. And yet, it had been in place for a long time, with an automatic renewal each year.

We determined that discontinuing this rebate program would not only save the company a significant amount of money, but would also have no detrimental effect on sales.

The previous season, they had spent $2 million on this program. Not renewing it for another year meant they wouldn’t need to continue spending money on a program that wasn’t working, freeing them up to invest that money in other ways on behalf of their channel.

The Challenges of Completing This Project

No project is without its challenges, and this was no exception.

One of the biggest challenges in eliminating this rebate program was the change management that was needed within the company’s sales group. They had been using this program for many years, so there was some concern that they would be taking a tool away from their dealers without providing them with a replacement.

With an adjustment like this, there’s always an element of change management around actually making the switch, and then there’s the additional element of constant evaluation of where you should be focusing your efforts and spending money.

This rebate program was automatically renewed from year to year whether it was effective or not. It was only natural to have some team members who didn’t want it to be taken away because they were afraid it wouldn’t be replaced with an equivalent program or that additional tools would be taken from them in the future.

When you take a tool off the table like this and you don’t replace it with something else, it can be difficult to get buy-in and earn the trust of the team that something will replace it. We needed to convince them that the money they were spending wasn’t moving the needle anyway. It simply wasn't effective.

Eventually, the sales team came around and recognized this program wasn’t having the impact they thought it was — they were giving money away they didn’t need to give away. And in the end, no one missed it.

Additionally, the effectiveness of this program wasn’t being tracked. They needed to establish a common language and metrics to measure so they could discuss the program’s results and make an informed decision on whether to move forward with it or not.

The Results: Huge Savings and No Disruption of Sales

Removing this rebate program saved the company from spending $2 million on a tool that wasn’t working, enabling them to invest that money in other ways to benefit their channel.

$2 million is a massive return on investment for any company — especially in such a short period of time. Even better, making this change did not cause any disruption or loss of sales. The sales team continued to hit all their sales targets.

5 Takeaways You Can Apply to Your Own Programs

This was a simple, yet effective project that resulted in big returns for our client. And this experience was ripe with lessons that are applicable to making changes to any program.

1. It Takes Bravery To Make a Change

First of all, to make beneficial changes like this, you need to be brave. You need to take chances and trust your gut (qualitative) along with the quantitative data. Change can be scary, but evolution is imperative.

Something we see all too often is that company leadership may be highly trained and have years and years of experience, but they wait for 100% proof before making a move. They want to be absolutely sure they have the right answer before they make changes.

In this particular instance, the concept of doing away with the rebate program had come up before, but there was a lot of worry around making that change and a lack of bravery to try it.

Bravery to make necessary changes is a key component of success.

2. Always Measure the Effectiveness of Your Programs

Every program needs to have some sort of measurable parameters you can track.

The only way to know whether what you’re doing is effective is to continuously evaluate it. For every program, you should have some kind of report card in a common language so everyone understands whether the program is winning or losing. Ask yourself:

  • How are you measuring your program?

  • How do you know whether it’s performing well or not?

  • What additional sales is it producing?

This is crucial in any program so that if you decide to end it, those involved don’t feel that something valuable is being taken away from them. Having measurable metrics to show the effectiveness of a program makes it much less personal when you decide to make a change because you have data showing clear results.

In this case, our client wasn't measuring the effectiveness of their rebate program at all. It was simply something they had been doing for a long time, so they assumed if they stopped doing it their sales would suffer. It was purely anecdotal — there was no substantive evidence that sales would suffer if the program was removed.

This is a clear example of why it’s so critical to have metrics built into any program right from the start. When you routinely measure a program’s effectiveness, every year you can examine what you expected to have happen versus what actually happened. Then you can either continue to invest in the program or discontinue it because it didn’t meet your needs.

Never put a program in place without a measurement that tells you whether it’s hitting your objective or not.

Setting it up at the beginning makes it so much easier. It becomes part of the implementation. When you put a measurement in place at the start of a program, you know what you’re going to measure and how and where you’re going to get the data.

Doing it after the fact is much more challenging: You might know what measurement you want, but not where or how to get that information. Or you’ll end up wasting a lot of time digging through mountains of data to find what you’re looking for.

If you're not ready to be brave and make a change, start measuring your results to give you the information you need to make that change in the future.

Don’t overthink it: you don’t need to measure fifty things to determine effectiveness. You just need to measure a couple of metrics that give you a report card. Consider what behavior you’re trying to drive with this program, and with who. Then determine what your measuring tool will be.

3. Set a Regular Review Schedule

Don’t underestimate the importance of regularly scheduled reviews. Once you’re tracking your metrics, you need to have a regular cadence of reviewing that data to determine if the program is successful or not.

In your reviews, you may find you’re layering programs on top of one another that are all doing the exact same thing. Without measuring results, not only could you be double-dipping in this way, you could also be leaving a big piece of the business uncovered because you’re not exactly sure what the promotion accomplishes.

We see this often with our clients: they put a lot of money into products that aren’t making them the margins they need, while at the same time they’re leaving their best products uncovered. Or in some cases they put too many promotions on their low-margin projects so they aren’t able to properly drive sales toward higher-margin products, new entries, or wherever they strategically want to go.

A regular review schedule will help you avoid these pitfalls.

4. Create a Common Language To Determine Success

You need to ensure you have a common language around your scorecard:

  • What does success mean?

  • What does mediocre performance look like?

  • What do you consider a failure?

With this language in place and a regular review schedule, you’ll have hard evidence showing you whether a program is giving you the results you want. That way, you can avoid continuing with programs simply because you’ve always done them.

Clear communication around success will also benefit your sales team. You have to arm them with information about what is and isn't working so they understand which programs are helping them achieve their goals…and which need to fall by the wayside.

When we work with our clients to make a change in their programs, we try to make it a win-win situation so the corporation, individual departments, and customers all understand why the change needed to happen.

Granted, not everyone will win every time, but there should be some common benefit and common acknowledgement around a change in programming.

5. Get an Outside Perspective

Working with a firm like Miller Wittman can help you gain a fresh perspective on your programs. We have many years of experience working with independent dealers and manufacturers, and we utilize this experience for our clients’ success.

In the case of this client, several people in the organization felt that the rebate program wasn’t effective, but they needed the added credibility of an outside perspective to make the decision to end it. We were able to come in and speak from our experience and put together an analysis for them to show them what their exposure was.

That gave the project manager more confidence to make the brave decision to change because he had us backing him.

If you’re unsure of the effectiveness of your programs, or are considering making changes, the Miller Wittman team can provide the expertise and outside perspective needed to help you make a change. Contact us today to get started.