Volume INNBATE - working example
The objective of the Volume INNBATE is to attract new business from multiple buyers (existing and new). This can be accomplished by either general sales practice or through the use of INNOVO to save on Sales Costs through the reduction/elimination of:
- Inherent client acquisition costs - since INNOVO brings qualified leads without the need for advertising, marketing or repeated contacts
- Increased costs to sell spare capacity
This utilizes any Supplier spare capacity, diluting fixed costs across increased units of sale, and driving the benefits of business scaling, thereby positively impacting profitability.
A Volume INNBATE relates to company wide sales. It is NOT client specific (see Customer INNBATE working example), but instead indicates the level of incentive a company has to either:
- GROW the level of their company’s sales, and/or
- Sell spare capacity that might otherwise remain unsold
Say your company is selling $1 million in product or services a year. You would like to be at $2 million. What percentage of your revenue would it cost you to achieve that level? Maybe 20%. Then maybe you offer 4 tiers of Volume INNBATE:
- 2.5% on an additional $250,000 in sales
- 5% on an additional $500,000
- 7.5% on an additional $750,000
- 10% on an additional $1 million
Illustratively, this means:
- If a company buys from you, instead of your competitor at least an additional $250,000, they will receive 2.5%
- If either the original company or another should buy another $250,000 (or a total of $500,000), then the company(ies) would receive collectively 5%
You can see how that goes. In the end, instead of costing you 20%, it only cost you 10%, so YOU saved 10% to your bottom line, and at the same time you encouraged companies on the Network to buy from you collectively so that together they might reach the 10% level.
NOTE: A Supplier must register a Volume INNBATE to access Buyers on the Network.
Buyers will tend to link to the most attractive INNBATE offers, so it is in the supplier's interest to make the offer as attractive as possible - but remember that it is a share of entire amount of savings generated by using INNOVO, and will therefore always be a win-win scenario for both Suppliers & Buyers, and it is only shared once the Supplier experiences the benefit of the additional sales.
- A Supplier can only post ONE (valid) Volume INNBATE offer at a time - which remains valid for the period selected and is applied equally to ALL buyers the supplier does business with (for all the products or services the supplier provides) through INNOVO.
- A Supplier can select the time period it wants the INNBATE to run in months (INNBATEs are calculated on the cumulative additional sales revenue through the time period).
- The Supplier can then select the additional sales revenue tier threshold(s) which trigger the INNBATE offer. Multiple (additional sales revenue) tiers and corresponding INNBATE offers can be selected if desired.
- The Supplier identifies the cost saving impact associated with the additional sales tier thresholds as a % of its revenue, and decides what proportion of these savings it is willing to share with all its buyers (also expressed as a % of its revenue) through INNOVO.
- For multiple additional sales tier offers, when the INNBATE transitions to the next tier, the new rate will apply retrospectively to the sales value in the previous range(s).
To see how INNBATEs would effect you, try our INNBATE Simulation
Take the next steps in the INNBATE process and begin saving and sharing with INNOVO.