PROS uses a multi-mode data collection engine to collect, validate and process channel sales and inventory data The data collected is both timely and accurate and is used to answer three main questions for the business user:

• What is Your Pocket Revenue?
• Is Your Pocket Revenue at the Right Level?
• How Can You Increase Your Pocket Revenue?

What Is Your Pocket Revenue?

• Track Pocket Revenue across regions, channel partners, products and time
• Rank Pocket Revenue by channel partner or product
• Rank Sales Revenue by channel partner or product
• Rank Channel Incentives by channel partner or product

Interactive Interface to Analyze Pocket Revenue by Time, Partner and Product Line.

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Is Your Pocket Revenue At The Right Level?
PROS classifies Channel Incentives into the following:

• Partner Discount (Trade Rebates and Special Discounts)
• Customer Discount (Customer Mail-in Rebates and Coupons)
• Protection Incentives (Price Protection, Product Returns and Upgrades)
• Development Incentives (Market Development Fund)

There are two types of Return on Investments (ROI) that are tracked for each Channel Incentive

• Increase in Market Size: ROI (M)
  How much did the market size (total consumer sales) increase when an additional $1 of channel incentives is provided?
• Increase in Profitability: ROI (F)
  How much did the company's profitability increase when an additional $1 of channel incentives is provided?

PROS performs the following calculations:

• Calculates the ROI of channel incentives by region, channel partner or products.
• Calculates and ranks the ROI of all channel incentives by channel partner or product.
• Rank the ROI of partner discount by channel partner or product.
• Ranks the ROI of customer discount by channel partner or product.
• Ranks the ROI of protection incentives by channel partner or product.

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How Can You Increase Your Pocket Revenue?
For tactical decision-making by sales organizations, PROS provides a breakeven analysis tool for the sales team to make informed decisions on incentive and discount approval. This ensures that Pocket Revenue is maintained. The PROS breakeven analysis tool helps the sales team provide answers to the following:

• How many more units of Product X does the channel partner need to sell if the market development fund were to increase by $100,000?
• How many more units of Product X does the channel partner need to sell if the partner discount is increased from 10% to 15%?
• How many more units of Product X does the Partner need to sell if the customer mail-in rebate is increased from $20 to $25?

For budget allocation decision making by finance organizations, finance teams can use the allocation of channel incentives in the previous year or period and receive a recommendation on how the incentives can be better allocated to increase Pocket Revenue for the coming year or period.

PROS recommends an optimal allocation by shifting investments with lower ROI to those of higher ROI. The shift can be governed by business policies set by the users. For example, the user may decide that no more than 20% of current investment in each category of channel incentive should change.

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Remove the Guesswork From Channel Incentive Allocation
With PROS, companies can avoid investing in Channel Incentives that have been ineffective in motivating a channel partner or improving the sales of a product. The investment may then be shifted to more effective instruments.

The software recommends the allocation of individual channel incentives (Partner Discount, Customer Discount, Protection Incentives and Development Incentives) for individual channel partner and product.

Channel Incentive Allocation Tool

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