Enliven Beverage Deal Podcast Episode #1
Are you getting ripped off in your beverage contract? Heather Neisen, Enliven’s Healthcare Practice Leader shares 3 simple tips for how to ensure you get every penny that you are due.
Links Mentioned:
Three Ways that Unmonitored Beverage Deals Cost You Money
Listen on Your Favorite Podcast Player:
Additional Resources:
Webinar: How Beverage Deals Drive Million Dollar Savings in Healthcare
Episode Transcript:
Tim Harms:
Welcome to The Enliven Beverage Deal Podcast, where we’re all about saving and making you money by taking both the guesswork and the legwork out of your beverage partnership, and by leveling the playing field when it comes to negotiating your beverage contracts. I’m your host, Tim Harms. We’ve got a great show for you today. Stay tuned.
Tim Harms:
Well, I’m really excited for everyone to listen in today. Today we have our guest, Heather Neison. Heather is the healthcare practice area leader for Enliven. She’s a personal friend. How are you doing Heather?
Heather Neisen:
Hi. Thanks Tim. Good to be here. Doing great.
Tim Harms:
Great to have you on the podcast. This is your first time on the podcast.
Heather Neisen:
Yes.
Tim Harms:
This is our first podcast. We’re doing.
Heather Neisen:
Woo. Yes. First podcast. I love being a guinea pig. This is awesome.
Tim Harms:
Fantastic. Heather got a question for you.
Heather Neisen:
Okay.
Tim Harms:
Have you ever been ripped off?
Heather Neisen:
Have I ever been ripped off? Gosh, it’s probably bad, but the first thing that pops into my mind is just, I switched cell phone carriers back around the holidays. I’m just thinking ripped off. You know that first bill that comes back to you once you switch and it’s got 80 lines and half of them are credits and you don’t know why, but you were told… it’s just so funny that they’ll tell you, “You get 20% off, and we’ll give you a free phone.” But then the phone’s on there and you’re trying to calculate it out. And then the first month of service is always like six times higher than you budgeted. And it all sorts itself out in the end, but I just-
Tim Harms:
But through a lot of pain and suffering.
Heather Neisen:
Yeah. And you feel like, I’m sure they are not ripping me off, but it sure looks like they’re ripping me off and it’s just, you got a new phone. You’re excited. But yeah, I don’t know. I think that’s probably the best recent experience that I’ve had with feeling ripped off here.
Tim Harms:
You know what came to mind for me?
Heather Neisen:
What’s that?
Tim Harms:
We we run a little Enliven March Madness Bowl, maybe not this year with COVID-19, but a few years ago, I won’t name any names, but we had someone, yours truly, won the pool and it was time to pay up. We had a certain Enliven employee that didn’t want to pay the money they were due and it was months. It was months and months. And I had our financial manager send him an invoice and start calculating interest.
Heather Neisen:
An invoice for the March Madness?
Tim Harms:
Sent him an actual invoice.
Heather Neisen:
That’s great.
Tim Harms:
Did the trick. Well, today we are going to talk about that feeling when you get ripped off and maybe ripped offs a hard or a harsh term, but it is true that no one likes to be charged more than they’re due. No one likes to not get the payments when they’re due or the payments that they’re due, and decided to have you on. You wrote an article not too long ago, we’ll look to the show notes. I think it was titled, I can’t remember exactly, but “Three Ways Unmonitored Beverage Deals Are Costing You Money”.
Heather Neisen:
Yes.
Tim Harms:
And I thought that… And you had some additional thoughts too that didn’t make it into the article, and thought we could have you on just to talk about how to ensure you get every cent owed in your beverage deal. Why is this even important?
Heather Neisen:
Yeah, absolutely. No, thanks, Tim. And I’m excited to just share a couple of insights, like you mentioned. That blog post really goes into detail about how beverage deals work and kind of all the nuts and bolts. But there are three really simple things that you can do today if you’ve got a beverage deal with a Coke or Pepsi, just to make sure that your deal is maximized, that you’ve got every dollar that was promised. And I think often when we’re talking to folks, it seems crazy. The contract spells out your pricing, it spells out how you get paid. And so you sort of think you go through this really rigorous process of negotiating a deal. And so you sign on the dotted line and you move on to your next project. And man, I do it. It’s so tempting to do it, but I would say there are three things that I could put… I could bet your money, that if you do one of these three things, you’ll find money.
Tim Harms:
Oh yeah. It’s so easy to, once you get the deal done to just rest on your laurels, move on to the next project. And we see it every day here in the shop, don’t we?
Heather Neisen:
Yes.
Tim Harms:
Just, people have done a great, great deal. They’ve worked really hard. And then when we peek under the curtain a little bit, they’re not even getting the rebates that they’re due. They’re not getting accurate volume reporting. They’re not getting the pricing that they were promised, all sorts of things.
Heather Neisen:
Yeah, absolutely. And I will say too that what we find with the beverage company, especially large global companies is they’re big and complex. So when you’re working with one of them, it’s often that you’re not just working with your rep, right? You’re working with a finance team, a legal team, you’re working with lots of different teams and they are often people that are changing roles frequently. The things that you can find errors in are not malicious often, they’re simply just manual errors or someone forgot to hit a button somewhere.
Tim Harms:
So you said, very interested, you said there are three things that listener listening in right now can do today to ensure they’re getting every cent out. And the first one is about volume reporting errors. Can you tell us about that?
Heather Neisen:
So, yeah. So let’s talk about volume reporting. So in any beverage deal, you’re buying beverages. So there’s lots of different products. You’re buying waters, juices, teas, energy drinks, you’re buying probiotic drinks and milks. And so on any volume report, you’re going to see hundreds of different line items.
Tim Harms:
These companies have thousands of skews, right?
Heather Neisen:
Thousands, yeah.
Tim Harms:
I mean, it’s not just Coke, diet Coke, Pepsi, diet Pepsi. I mean, it is Code Red Mountain Dew. It is Lemon Lime Kombucha, it is watermelon pear sparkling water, whatever it is.
Heather Neisen:
It’s true. No, got some crazy flavors out there. And in that there’s multiple package sizes, so you’ve got everything from a can, but to 20 ounces and even larger sizes. And then for every, like you mentioned, for every tea you’ve got 18 different varieties of tea, you got orange pear and… and anyways, each of those is a line item on an Excel spreadsheet. Each of those has their own price tag. Each of those has their own rebate, and all it takes is someone who’s running that report to just not click that sparkling water, not click that milk. And you could really miss out on a huge portion of your rebates if it’s tied to one of those packages.
Heather Neisen:
The other piece is it’s really easy for a simple formula inside that spreadsheet to not add up correctly. So what we would suggest is you can go and look at that volume report today and you can look, and there’s probably seven or eight tabs and it’s kind of beverage company speak, but it’s easier to decipher once you kind of get familiar with it, and you can go and look, and is this really what I’m purchasing? Do I see any big categories missing? Is my water on there, is my soda on there? And often times, more often than not, we’ll find that the fountain products were just not clicked. And so they’re not on there, something like that. So something simple, but it’s easy to get… easy to find a mistake.
Tim Harms:
So step one is even just request that the Excel spreadsheet, if you don’t have it, when you get a rebate payment-
Heather Neisen:
Yes.
Tim Harms:
Request the Excel spreadsheet, look through it. If that’s not your forte, have your analyst look through it compared to the contract, make sure the formulas are adding up, make sure the right rebate is being applied. I would also say too. I mean, sometimes we see equipment being installed and that equipment is not linked up to the contract. So if you have a vending machine or you have a fountain machine that’s had work on, make sure that there’s volume being reported for that asset number to that machine. And they can get your reports down to that number.
Heather Neisen:
And that’s a good point too not only just add equipment, but also all your locations. So some of our healthcare systems have 20, 30 over a hundred locations, and if one location didn’t get added to the report, that’s important. So just double spot checking are all my locations included.
Tim Harms:
Perfect. All right. Number two about invoice pricing, tell us about this, Heather.
Heather Neisen:
Yeah. So this one seems the easiest to get, right? There’s a contracted price that everyone’s going to get charged, period. There’s no more complexity, no calculations, but it’s just not what we see in the field. So oftentimes, again, because these beverage companies are big companies, they’ve got a lot of moving parts. Their technology is not all created equal across the nation across different bottlers. Sometimes people are entering pricing in manually. Sometimes they’re doing it part of a software tool. All it takes is one software upgrade and pricing can get reverted back to an old program. Maybe there’s a new package introduced, new innovative probiotic. Your contract says that you get a certain rebate, but no one remembers to do that. And so it’s really easy for that to happen. And the other piece with pricing is that price increases always happen for both your bottles and cans, but also your fountain products, but they’re normally taken at different times of the year.
Heather Neisen:
So again, all it takes is a price increase to go at the wrong time and it can really cost you a lot of money. 3% in January versus 3% in June, it’s a lot of money. And so we’d really say, go grab a couple invoices from the recent delivery and just spot check it. Look and make sure each product’s being charged right, especially big, big volume packages like water and just check it. And the good news is if it’s right, that’s great. But I think odds are you might find a couple of invoices that might surprise you.
Tim Harms:
That’s right. I think most people think about Coke and Pepsi and Dr. Pepper and the big guys having really sophisticated automated systems and all the pricing is automatically updated at the right time. And for whatever reason, we just find out that it seems to be much more manual process. And so no malicious intent here-
Heather Neisen:
None.
Tim Harms:
But you just got to check it to make sure everything is exactly as it should. All right. The third element that someone listening today can do right now is check their missed payments. What do you mean by that?
Heather Neisen:
Yeah, absolutely. So missed payments. So in a typical contract that we would see with a beverage company, there may be 30 or more payments that are going to come in. And so that could be a vending commission. That’s going to be a separate check than your rebates on your cases purchased, and that would be a different check then the fixed funding or a sponsorship payment. And this depends on the contract, how those funds come in, but again, easy at least one a month for vending all those different fixed funding buckets, it’s really easy to miss one of those payments, right? And we find again that they are just simple little errors that happen that can really cost you. So it sounds silly, but sometimes we’ll get a response from a rep that says, “We just forgot to push send on the payment.” It’s months later, just got to get a couple of approvals internally and someone just forgot to push send.
Heather Neisen:
It could be that you have a new rep on the account that just didn’t realize that was part of the contract. Could be that your vending machine got unsynced from your account. I mean, there’s countless little reasons that that can happen, but those payments, you’re counting on those when you sign that contract. And so just keeping track of what’s expected and then making sure those come in on time can really maximize your deal. And it’s kind of crazy to think that someone could forget it, but I mean, we’re all humans and we do, so keep in front if it’s really important.
Tim Harms:
Yeah. For every one of our clients, we create a spreadsheet at the beginning of a contract that literally outlines every payment due date for the next five, seven, 10 years every week. And we have someone on our team who meticulously goes through and gets alerted and we follow up, we make sure that those payments come in, and if they don’t come in that there’s an invoice with an interest [inaudible 00:00:13:48]. Shortly thereafter, and it’s remarkable after a couple of missed payments, how quickly those get paid on time after there’s someone realizes you’re really tracking it, doesn’t it?
Heather Neisen:
Yes. Oh my goodness, yes. So I’d say if you have the opportunity, just go back and even see when the last payment you received was. Maybe you have to check with finance to do so, but just check it and see, is that really… is that the last payment that should have been here or are you expecting something else soon? Again, I’d be surprised if you didn’t find at least one payment that didn’t get paid or maybe is late in payment.
Tim Harms:
Excellent. Well, I appreciate this time and the tips, Heather.
Heather Neisen:
Of course.
Tim Harms:
Really good stuff. And once again, I will link to your article, “The Three Ways Unmonitored Beverage Deals Are Costing You Money” in the show notes so you can go and see that for yourself. Heather, it’s a pleasure. I will hope to have you on again soon.
Heather Neisen:
Thanks so much, Tim. Appreciate being here.
Tim Harms:
You bet.
Tim Harms:
Thanks everyone for listening in, hope you found that informative. If you have a burning question about your beverage negotiation or partnership, we’d love to hear from you and answer it on this podcast. Reach out to us by emailing podcast@enlivenpartnership.com. And hey, before we sign off, I want to remind you that you can take both the guesswork and the legwork out of your beverage partnership. You can level the playing field in your beverage negotiations, and you can save or make your company millions through a new or an improved beverage agreement. The first step is a free beverage opportunity analysis which will tell you just how much you can save or you can make. Sign up for your free beverage opportunity analysis at enlivenedpartnership.com and by cooking free savings estimate. On behalf of everyone here at Enliven, thanks for listening in.
