Challenge
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- The Invisible Leak: Automation of the weekly commission process revealed significant shortfalls in payments from an electricity retailer to a lead generation company.
- High Stakes Negotiation: Working out how to approach revenue leakage with the client. A direct request for all missing revenue risked an immediate, flat rejection of the entire claim. If we asked for the unpaid revenue all at once we might be rejected whereas if we establish a smaller test case that has exactly the same pattern and the client agrees that these commissions should have been paid, then we have a stronger position to argue for the full amount to be paid.
- Obtaining the leaked revenue
Solution: The Piecemeal Revelation Strategy
Rather than presenting the full shortfall at once, Analytical Models designed a strategic customer engagement and disclosure framework:
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- The Proof-of-Concept Test Case: We identified a surgical subset of sales data to serve as a “test case”. This forced the client to agree on the logic of the error without being overwhelmed by the total dollar amount.
- Incremental Exposure: Once the client validated the test case, we systematically “revealed” larger batches of sales where commissions were in error, effectively making the data impossible to ignore.
- Psychological Anchoring: This phased approach turned a potential confrontation into a collaborative reconciliation process, shifting the CFO from a defensive posture to a solution-oriented one.
Outcome
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- Full Recovery: Hundreds of thousands of dollars in unpaid commissions were identified. The unpaid commissions were recovered in full.
- Critical Survival: For the client, who was in a tight financial position, plugging this leak meant the difference between staying in business and closing their doors.
- Industry-Wide Validation: This turned out to be an issue across over a dozen lead generators for multiple years but had not been identified by their CFOs nor by their revenue assurance teams.