Rebate Revenue Management With Andrew Butt Of Enable | Soar Payments LLC
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Rebate Revenue Management With Andrew Butt Of Enable

Rebate Revenue accounts for an ever increasing amount of revenue margin across so many industries. In this episode Andrew Butt, CEO of Enable gives us a closer look into the way modern software can transform the rebate revenue management process creating efficiency and data transparency.

Payments & Fintech Insights In This Episode

  • Why rebate revenue is a crucial for providing additional product margin for business owners.
  • The story behind Enable and how shrinking margins inspired the creation of a more modern software.
  • Integration and security priorities with highly confidential agreements in B2B partnerships.
  • Andrew’s insights into future of rebate revenue.
  • And so much more!

Featured on the Show

Episode Transcript

Heather: Hey, everyone. Welcome to another episode of “PayPod.” I’m your host, Heather Bodie. And today, we’re going to be exploring the world of rebate revenue. Joining me to help dig into this topic is Andrew Butt, co-founder, and CEO of Enable, a modern, cloud-based B2B software solution for rebate management. Andrew, welcome to the show.

Andrew: Great to be here. Thanks for having me.

Heather: Absolutely. So, to get us started, and set the stage a little bit for our conversation, talk to me about rebate revenue management in general. Why is it so crucial?

Andrew: Sure, absolutely. Okay. So, we all know and understand that if you are a distributor or a retailer, you buy products at a certain price and then sell it for probably a higher price, you know, hopefully, and then you make your gross margin in the middle. So, that’s widely understood. But what many people don’t realize is there’s actually a whole load of back-end deals exist between manufacturers and distributors and retailers, which really provide additional margin, and significant additional margin, based on specific behaviors being achieved. So, in other words, you can make that kind of difference between cost price and sell price by just buying and selling, but then there’s a whole load of additional revenue which you can earn in the form of a rebate if you can kind of execute that well. And what’s happened in recent years is they’ve actually switched around, where most of the margin used to be that simple kind of buy and sell. Now, most of the margin is actually rebated back. So that’s why it’s important.

Heather: Wow. And I know that your company, Enable, offers powerful solutions when it comes to managing that rebate revenue, but for those of us that are unfamiliar, give us the juice. What’s the story behind your company? How did it come to be?

Andrew: Sure, absolutely. So, I was running a e-commerce division of a large distributor in the UK, it’s actually now the largest of its kind, distributing products for Procter & Gamble, and Unilever, and Gillette, and those sorts of companies. And what my co-founder and I realized is kind of what I just talked through, which is the gross margin was getting smaller and smaller and smaller. And we’re at a stage where sometimes we’re actually selling at cost price, or even below cost price, and then claiming these significant rebates. And the rebates were getting much more complicated. So, all the manufacturers had deals, the deals were increasing, they were product-specific, location-specific, and really were kind of asking us to do all sorts of things in order to then claim the margin back. So, this is what we saw going on, and there was a complete lack of modern software to handle that well. So, we were using spreadsheets.

Heather: Oh, my gosh.

Andrew: Yeah. Most people were using spreadsheets. So that was really the inspiration behind launching a software platform which became Enable.

Heather: I can only imagine how overwhelming that must be, trying to manage rebates in Excel, especially when you say there’s such a level of complexity to it. Or even, I noticed on your website, some of your customers are relying on that data from trading partners. So they’re not even necessarily holding the data themselves. And it sounds like an accounting nightmare. So, what specific services does Enable offer, and for which industries?

Andrew: Sure. No, you’re absolutely right there, Heather, that it’s a nightmare across lots of functions and, you know, the relationships between people like finance and commercial are often stretched because of this. And then certainly, the relationships between trading partners are also challenging, or can be challenging. So, we kind of started out dealing with the accounting aspect first, and we work with CFOs and their teams, and they use the software to calculate all of these rebate deals and generate accruals, and bearing in mind, the accrual is all of their profit, in many cases, so they’re quite big accruals, and then actually collect the revenue, or pay the revenue out, if they’re a finance team and a manufacturer.

So, all of the accounting and finance side of it is where we started, but very quickly, we moved into the commercial teams. So, the buying teams, the purchasing people, the category managers, who kind of negotiate all of these deals with manufacturers, and also the salespeople and sales teams within manufacturers, who are their counterparts. And so, we kind of did finance first, then commercial. And that took us into this collaboration space, where those companies are actually collaborating online to reach these deals and then track them and execute them to make them work. That was the kind of sequence of events.

Heather: So, that combination of increased transparency among the partnerships and also just, in general, like you said, getting away from Excel spreadsheets and creating this operational efficiency. It’s so, so important to make sure that the company is running as successfully as possible. If I’m a new customer and I want to become an Enable client myself, how does that sign-up process work? What is that journey like? Is it what you were just referring to? Like, you come in and work with the accounting team first, or is there anything else you can sort of add to that of what it’s like to onboard?

Andrew: Sure, absolutely. So, first of all, any company can sign up with Enable and use our system immediately, and they can use it in accounting first if they want to, and finance. And as I said, that’s often the starting point, but it doesn’t have to be. They could just start using it in their purchasing teams straight away, or their sales teams, and start creating their deals within Enable. But a critical thing is once a company gets started on Enable, they then invite their trading partners. So, imagine you’re a distributor or a retailer and you’re dealing with 500 manufacturers or suppliers. You can actually invite all of them to use Enable free of charge. They can then immediately see all of these deals and rebates that they have with you, and you can actually collaborate with them online. So, we have tens of thousands of trading partners that have been set up and represented within our system, and many of them actually use Enable in a kind of free-of-charge capacity, which is the other kind of onboarding route.

Heather: And is that the permanent setup? Do each of those individual partners remain sort of free-of-charge in their relationship with whoever it is that is managing the rebates, or do they eventually need their own account?

Andrew: Well, they can use it free of charge forever, and that gives them almost like a read-only view or a limited view into Enable with the trading partner that invited them. And there’s real crossover as well. So, often, one trading partner will be trading with many Enable customers, and all of those show up, and they can access that free of charge as well. But there does come a point where they really want full access. They want to create their own deals, not just review them, and want to have all of the power that a full Enable customer has. So, that’s been exciting for us in actually upgrading those guys from free of charge into a full kind of customer. And that happens all the time.

Heather: I know integrations can be a big sticking point for a lot of businesses. I know myself, I’ve been an entrepreneur for many years, and led a non-profit, and I feel like every time I’m in a new venture, we have 15 different platforms, and we want as many of them to speak to each other as possible. Can you talk to me about Enable’s approach to integrating with other platforms?

Andrew: Yes. Yeah, sure. No, I completely agree. And we actually decided when we first started this to be agnostic of any specific ERP system or CRM system, because customers use all of them, and often they use multiple of them as well. So, we have modern integration methods where, for example, we have REST APIs, and we also have the more traditional batch SFTP-type methods, because transferring this data en masse, on, say, an automated daily basis, is actually the preference of many companies. So, we’ve kept agnostic. Having said that, we are building out native connectors to more and more ERP systems, because we want to make it easy, and take all the friction out, so someone can just slide up on Enable, start using it the next day, and almost with a single mouse click, get it plugged into their CRM system. So, we’ll never be kind of wedded to or embedded within a specific system, but we are agnostic, and plug into whichever system people use.

Heather: Great. It sounds incredibly seamless, but inevitably, like with all platforms, someone will need help troubleshooting an issue. How does Enable approach providing quality support?

Andrew: Sure. Well, we’ve always said that we’re not just a piece of software where we provide the software and that’s it. So, we have a big investment in customer success. One of the great benefits of having very, very strong investors behind us is we can make long-term investments. And so, we can almost overspend on having the best support, you know, a very high number of people in the team, in lots of different locations. And we don’t even [inaudible 00:09:12] so it’s not like we’re… We’re not charging for our time. We don’t charge by the day or anything. Anyone who has a subscription to our software has open access to our customer success teams. We will load data, load agreements, provide support, provide training, do almost anything that helps the customer get maximum value out of our system.

Heather: That’s incredible.

Andrew: The reason we do that is we know we’re growing at a very fast rate, and we will build economies of scale as we get more customers. So we want to make that investment now.

Heather: So, when it comes to, like you said, you’re loading data, you’ve got this incredible quality support team, customer support team. When it comes to security and privacy, I know in financial tech we play a really key role in protecting customers’ and business data. What’s Enable’s philosophy when it comes to data security? And how do you put that into action?

Andrew: Absolutely. For us, these kind of deals, these B2B agreements and rebates that our customers have, are highly, highly confidential, because they are negotiating these with each of their trading partners, and we have many competitors using our system. So you can imagine if those deals leaked out, it would be very detrimental. So we do take it very seriously, and we have a whole range of kind of physical and, you know, software-based security. We have all of the latest accreditation. So, we started out with ISO 27001, and then we added things like SOC 1, SOC 2, Type 1 and Type 2. So we’re regularly audited by external auditors. We’ve made big investments in that, so it’s really helped us improve the business. And, as I said, physical security as well, as that type of security, with really using the best datacenters, hosting providers, all of those things you’d expect. Also, we do regular penetration testing, where we commission external companies to do that on a very, very regular basis.

Heather: Wonderful. So, let’s talk a little bit about the future. What do you see in the future for rebate revenue? And coupled with that, what’s next for Enable? Any exciting offerings or projects, partnerships? Anything you can give us the scoop on what’s next?

Andrew: Absolutely. So, there’s no question this revenue is growing significantly, because customer expectations are rising. This is end customers I’m talking about. They’re more demanding, and manufacturers and suppliers want to be much more targeted in their offerings, so they need their partners, you know, again, their retailers, their distributors, to be able to get the right product to the right people in the right quantity at the right time. And the way that they drive all of that behavior is through these deals. It doesn’t work just by buy-and-sell pricing. It has to have these deals behind it, which are timebound, product-specific, customer-specific. They’re becoming more dynamic, more sophisticated, and growing in value and volume.

So, you know, this, today, affects around 70% of global trade, and the actual amount of rebate revenue is in the trillions. So it’s already huge, and we are seeing that grow. So, that’s the direction it’s going in. Terms of Enable, this is such an untapped space, and it’s such a fragmented market, because we’re in many verticals, so whether it might be where we started, with DCS, which is kind of health, beauty, and household, whether it’s construction materials, plumbing, electrical, HVAC, or whether it’s food service, pharmaceuticals, automotive, all of these industries are big for us. But when you go into those industries, everyone is using Excel, and they can be a $10 billion company, revenue, or a $10 million company, and it’s just a huge opportunity.

Heather: That is wild, I think.

Andrew: It is. And that’s why we’re keeping laser-focused. So, we’re not kind of going into brand-new functionality, because this needs to be done so well, and there’s so much we can do. We’re getting deeper and deeper in this space. We do have some great partners. And so, if you look at things like pricing optimization, that is an adjacency. It’s alongside B2B deals and rebate revenue, and it’s not something we’re going to do, because it’s another huge space. So, we’ve got some great partners there. And also, we partner with industry. So, we recently announced a partnership with something called IDEA, which is owned by the electrical industry, and that has 90% of electrical component manufacturers and distributors already using this platform. So, we’ve partnered there, and we are bundling in and offering Enable to all of those companies. So, those are some of the things we’re working on right now.

Heather: I had no idea that I would be so geeked out about rebate revenue management. I mean, I feel like if we could talk for another hour, I would absolutely wanna do that. But unfortunately, our time is limited today, and we are now in our final segment, a segment we like to do on every show. Five questions, rapid-fire. Andrew, how are you feeling? Are you ready?

Andrew: I’m ready, I think.

Heather: Okay. All right. Quickly. Make a prediction about the future of rebate revenue in general. What do you expect to happen in the sort of immediate future, next 12 to 24 months?

Andrew: Yeah, so, I think it’s going to increase by 50%, and I think it’s gonna be moving into a lot of intangibles. It came from physical goods, but intangibles, and also goods not for resale, as well as goods for resale.

Heather: What’s one cool piece of payment or finance-related technology that you’ve come across that impresses you?

Andrew: I moved to the U.S. two years ago, and one thing I’ve used in the last 12 months is Venmo. I know it’s not necessarily the latest invention, but I think, you know, paying people from your phone on Venmo has been really, really convenient.

Heather: Absolutely. It helps maintain friendships. It’s a wonderful, wonderful tool. All right. In the next five years, growing number of people around the world will be purchases with either Bitcoin or Apple Pay or some other platform. Which one, and why?

Andrew: I’ve actually been looking at stablecoin, and I do see the whole appeal of transferring money online which isn’t tied to a bank. There’s huge benefits there. So, I actually see, you know, aside from some of the negative press recently from Bitcoin, actually, stablecoin will be a huge currency, and platform.

Heather: What’s one piece of advice that you have for someone considering the financial technology industry as a career?

Andrew: Yeah. I think we’re even now only just inventing things here. We’re right at the beginning of an exciting journey. So, I think focusing on solving a very specific problem, and something that…you know, now is the best time to be doing that, in terms of being able to reach customers, raise capital, and I think focus is what I would say. So, great timing, great thing to be doing, and keep focused.

Heather: Right. Keep finding those industries that are using Excel spreadsheets for enormous elements of their revenue.

Andrew: Yeah. And specific use cases. So, pick a very, very specific use case that you can understand and solve for.

Heather: Beautiful. All right. Last but not least, what’s the best business advice you’ve ever received, and from whom?

Andrew: Yes. That’s a difficult one. There’s a lot of people that have given me a lot of great advice over the years. It probably is what I was saying before about focus, in that human nature is that we take on way too much, and we don’t say “no” enough. And, you know, the Steve Jobs phrase of 1,000 nos for every yes I think is a great ratio, and the best human quality is attention, and narrowing down and having that laser focus. So, you know, saying no to things that you really, really, really want to do, that’s what focus is, not just saying no to something that you actually aren’t that bothered about. So, that’s what I’d say is the best advice I’ve heard. Of course, I mean, Jony Ive and Steve Jobs are famous for that advice, so I’d have to credit them for that.

Heather: Oof. I felt that advice in my guts just now, so thank you for bringing that back to the surface. I’ve heard it before, but it feels like it hits different each time I hear it. So, great. All right, Andrew, that does it. Thank you so much for joining us today. If folks wanna get in touch or learn more about your company, where can they find you?

Andrew: LinkedIn is best for me. Just find me there and send me a message on LinkedIn. Connect with me on LinkedIn, please.

Heather: Beautiful. Beautiful. Well, thank you, again, and good luck with all of the amazing opportunity you have on this runway ahead of you and during this exciting time. I really, really am excited about the work you’re doing and excited to follow what happens next.

Andrew: That’s really appreciated, Heather. It’s certainly exciting. And again, thank you for having me on your show.

Heather: If you enjoyed this episode and wanna hear more, head on over to soarpay.com/podcast to subscribe on your podcast listening platform of choice. That’s soarpay.com/podcast.

Industry Spotlight

Enable

Enable is a modern, cloud-based SaaS solution for B2B rebate management. The software is used by procurement and finance professionals in distribution, wholesale and manufacturing across over 50 industries so that they can have an easy, seamless solution to execute and track their full range of trading programs. With Enable you can model every rebate deal with ease, even the most complex ones. Manage all your deals and rebate calculations on one simple platform. No more relying on Excel.