The following resolutions have been proposed to the Trading Support and NUS extra / TOTUM CEU: (PDF version)
A New Scheme for Beer Retrospective Rebates
NUS Services is at its strongest when we act collectively. This applies to our policies, our protests, but it should apply to pulling pints as well.
The current beer retrospective rebate schemes (retros) works by distributing a flat return to students’ unions per barrel or package, and then returning more money depending on volume sale. The more volume a students’ union sells the more money they are returned.
There are currently two overarching drivers behind changing the current retros model.
The first is the cost of beer distribution is rising owing to the retirement of the Carlsberg agreement which has been in place for over a decade. Through tweaking the way the retro scheme works it’s possible to offset some of the costs to students’ unions.
The second is that in a market where both beer sales are declining overall and a market where compliance is key to our success we want to find a more nuanced way to reward collective purchasing behaviours.
This then leaves two options for guiding principles to develop a new scheme which we ask the cooperative enterprise unit to take a view on.
Students’ unions receive a slight increase on the current flat rebate amount they receive on beer purchases (this is the amount prior to volume rebates). This would then be coupled with a small amount of rebate depending on compliance within the purchasing consortium.
The benefit of this option is that it ensures that every students’ union would receive a slight increase on the flat amount of rebate they receive now. The disadvantage is that it doesn’t provide as great an incentive to grow purchasing volumes which would increase the overall amount of rebate for everyone over time
Students’ unions don’t receive a further financial return above the current flat rebate but are more generously awarded for acting compliantly within the rules of the purchasing consortium.
The benefit of this option is that it ensures every students’ union can receive much more of a rebate if they choose to act compliantly within the rules of the purchasing consortium and this methodology supports the growth of volumes within the purchasing consortium overall. The disadvantage is that the level of rebate is dependent on a students’ unions compliance with the rules of the purchasing consortium.
A New Model for Engaging Members in TOTUM
The NUS Extra Direction and Oversight Board was created at a time when NUS Extra was totally within NUS’ direct control. Following the establishment of ‘OneVoice’ a joint venture between NUS and Arrk Group this is no longer the case. OneVoice is now responsible for the development and delivery of TOTUM.
OneVoice is 20% owned by NUS and 80% owned by Arrk Group. This means that students’ unions are still able to influence the development of the TOTUM product, however OneVoice’s business plan is developed and delivered independently by OneVoice. The relationship is analogous to Endsleigh, we have a shared vision and a financial mission, but operate as distinct legal entities.
In the context of TOTUM, and NUS Extra before it, the purpose of a Direction and Oversight Board as defined in the Articles of NUS Services (3.11-3.11.7) is to; oversee the performance of TOTUM/Extra, monitor its financial performance, monitor risk, and advise on any surpluses generated.
OneVoice is a separate, distinct legal entity which is not part of the NUS Group. This means that the Cooperative Enterprise Unit and Direction and Oversight Board cannot perform their duties as set out in NUS Services’ Articles.
For DOB members it has not been an easy experience with a clear disconnect between the task they are elected to do and their actual ability to do it. Members of the DOB have discussed that the current arrangement is not something they wish to continue with.
The development of OneVoice allows us to consider a more nimble, informed, and broader model of decision making
The Cooperative Enterprise Unit is therefore asked to support:
1. The dissolution of the TOTUM/NUS Extra Cooperative Enterprise Unit and Direction and Oversight Board for year 19/20 onwards
2. The recommendation to OneVoice by NUS that OneVoice establish user groups to capture feedback on different areas of TOTUM’s work.
3. The recommendation to OneVoice by NUS that OneVoice establish a TOTUM Advisory Panel which will provide business advice to OneVoice from students’ unions.
4. The recommendation to OneVoice by NUS that OneVoice expand alternative TOTUM feedback mechanisms including; focus groups, surveys, and meetings with students’ unions.
5. The recommendation to students’ unions by NUS that students’ unions regularly and positively engage with OneVoice through TOTUM’s channels on the products performance, development, and suitability to users.
A New Model for TOTUM Incentives
TOTUM was launched in August 2018 and the new platform and product, despite some initial challenges, are now running effectively. The OneVoice business model is also rapidly evolving and will soon bear little resemblance to the old NUS Extra business model. As per the original plans and recent communications the NUS extra product and its related commission scheme will be retired at the end of June 2019.
The NUS TOTUM Direction and Oversight Board (DOB) has been involved in developing OneVoice’s thinking on a new incentive scheme. As a movement there is now the opportunity to develop a new incentive scheme fit for a new product and business model.
Collectively, it’s our ambition to grow sales, grow the reach and influence of students’ unions, and to do this we need to find an incentives model which reflects the evolution of the product and underlying business model from NUS Extra to TOTUM. The current model does not recognise the changes to the product nor does it incentivise the collective behaviours which will allow TOTUM to grow and prosper for the common good.
It’s important students’ unions have a voice in the shaping of the new TOTUM incentive scheme which will be intended to reflect, reward and recognise the work students’ unions do to promote this new product and encourage their students’ to engage with it.
OneVoice have contacted students’ unions CEOs to invite them to take part in their focus groups while they have also been encouraging students’ unions Finance Managers to take part in developing the new model.
After a significant response through recent focus groups it’s clear that any new incentive model should adhere to the following principles
• It should be clear and simple meaning it is easy to understand, administer, and communicate
• The new scheme should provide adequate financial reward for students’ unions
• Incentives should be responsive to both a changing proposition and changing education landscape
• Incentives should be proportionately and fairly distributed amongst students’ unions
• The incentive model should be flexible, but should not change within financial years
The Cooperative Enterprise Unit is therefore asked to support:
1. A recommendation for the Direction and Oversight Board to support the development of a new incentive model until the DOB’s dissolution.
2. A recommendation to OneVoice by NUS that OneVoice seeks to develop an incentive model which as far as possible follows the guiding principles as outlined above.