Benefits
Compelling ROIMonitoring channel activity can lead to significant benefits. The estimated revenue leakage for a business unit generating $2 Billion is as follows:
-
Incentive
Claims
Overpayment (4%)
$40
Million
Fraudulent Warranty Claims (2%) $40 Million
Lost Profit due to Gray Market (3.5%) $70 Million
Total Revenue Leakage $150 Million
The sales increase required to compensate for this leakage is 19%. Such an increase can be very challenging in competitive markets. Effective channel monitoring by correlating various sources of channel data can reduce this
leakage by as much as 50%.
Comprehensive approach
For effective brand protection, "a broader approach is required in which the 3 S's — sensing, speed and severity — are used in combination. - "Competing with Gray Markets", Kersi Anita, et. al., MIT Sloan Management Reiview
- Severity - This refers to the penalties imposed on perpetrators of fraud. Penalties could be fines, lawsuits, withdrawal of privileges, etc.
- Sensing – The ability to detect fraudulent channel activity with a high degree of certainty. Certainty could be increased by incorporating more than one signals and sources in the detection process.
- Speed – The time required to conclusively detect and prove the existence of fraud. Speed could be increased by effective use of appropriate technologies.
Proactive and Technology-based Fraud Detection
"Most traditional fraud detection methods are reactive in nature---that is, they are initiated by tips or complaints, control overrides, or other indicators that someone observes or hears. Proactive fraud detection involves aggressively targeting specific types of fraud and searching for their indicators, symptoms, or red flags. Early fraud detection is critical because the sizes of most frauds increase geometrically over time as perpetuators gain confidence that their schemes are not being detected. A technology-based approach for pro-active fraud detetection involves searching business events, records and databases for fraud symptoms relating to sales, purchasing, payment, receipt, borrowing or other types of transactions." - "Strategic Fraud Detection - A technology-based approach", Albrecht, Conan, et.al., Brigham Young University.
Streametics offers a technology-based fraud detection solution that enables manufacturers to be pro-active in detecting various kinds of channel frauds.
Speed of Deployment
The Streametics solution is also offered as an on-demand solution in addition to license software. With the Streametics Ondemand, no IT infrastructure or upfront capital investment is required. Our “pay as you go” service fee model allows channel organizations to quickly and incrementally deploy the solution and test out its benefits. Channel monitoring projects can be rolled out and tangible results can be achieved within few weeks.
Flexibility of Usage
The on-demand solution can be used on an “as-needed” basis. Various configurations are possible
- Periodic
– while conducting channel audit
- Continuous
– for proactive channel monitoring
It is also possible to start with periodic channel monitoring and then convert to continuous monitoring. Rules can be implemented quickly to detect new, emerging fraud patterns or to adapt to new promotions strategies.
Scalable Infrastructure and Services
The Streametics solution can be used to track hundreds of millions of individual product items across global, multi-tiered channels. Our scalable, high performance correlation engine can process millions of channel transactions to monitor channel activity. A dedicated analyst team is available to provide consultation to the manufacturer. This team can quickly reconfigure various channel monitoring rules and develop customized reports and dashboard.