Sell at the right price, to the right customer, at the right time.
"Revenue management" is a set of levers allowing certain players in the economy to increase their sales by optimizing their pricing: by modulating their rates according to demand, these players optimize their turnover thanks to better pricing (segmentation and price level) and better management of stocks and over-supply.
Revenue management: a technique that has proven itself in aviation.
This set of techniques was born in the United States in the 80s, following the liberation of airspace (opening to competition and then possibility for airlines to make any type of connection in all countries). This deregulation has provoked a price battle that has prompted airline players to optimize their sales by setting their fares intelligently, while making the most of their demand and inventories.
Pricing (the art of setting the right price) and yield management (the art of managing these prices as well as possible) are therefore the two pillars of "revenue management".
By navigating the price grid defined in advance, the airline players have thus succeeded in optimizing their sales and turnover.
Revenue management then gradually spread in Europe, to all sectors that market non-storable goods and services.
An interesting technique to cope with rising costs.
It is used in particular by hotels, restaurants, tourism, rail transport, culture and performing arts.
And the results obtained are very advantageous, with an increase in revenue of 8% on average. Another strong point, revenue management makes it possible to keep prices low, or even to lower them by improving rates.
The ideal tool to bring supply and demand together.
To keep prices low, the goal is to sell at the right time, to the right customer and at the right price, structuring offers, anticipating demand and segmenting customers as accurately as possible. The idea is to set up real-time pricing that can adapt to fluctuating demand.
Big Data at the service of an increasingly efficient technique.
For effective revenue management, we can now combine the power of Big Data and human expertise.
"The revenue manager is able to manage and optimize his entire stock. The digital tool identifies critical situations for him and offers him a series of levers to operate, price increases, modification of the length of stays... It is then up to him to make the right trade-offs," explains Pascal Niffoi, co-founder and CEO of N&C, a revenue management consulting firm that is a partner of Impact Consultants.
A very current solution.
In an inflationary context, characterized by a deteriorating economic situation in France and abroad, revenue management is a real asset for companies that choose to use it. "The current economic situation, competition with other companies, changing regulations are all factors that are moving in the direction of the adoption of revenue management," concludes Pascal Niffoi.
It is a growth solution for now, and for a long time!
Rodolphe Lenoir and Pascal Niffoi.