The heart of revenue management is using analytics. These reports will help you more accurately predict future consumer behavior and alter your prices and availability so that you keep up with consumer demand while maximizing your bottom line earnings.
If you’re lagging behind in revenue management and want a few fresh ideas to become more effective at it, here are just a few great ideas.
1] Inventory Strategies
Your inventory is everything you have to offer your customers. Tweaking what’s in your inventory can increase your revenue. For example, if there’s a low demand for a particular product in your inventory, you might consider lowering the price on it.
By lowering the price, you’re going to grab more market share and eventually increase your revenue on that product that originally was just sitting there unpurchased. Experimenting with pricing on your inventory and then juggling what you offer can really help your revenue management team make the most money.
Flight upgrades aren’t always a hot product at airlines, so this might be one product you really push by giving lower prices. Airlines have a different kind of inventory than most businesses, but they have an inventory nonetheless, and it can take some time in deciding which types of products are right to push forward at which times.
Airlines rely heavily on promotions to compete with each other, and that’s one thing your revenue management team is going to need to do in order to up your revenues. In revenue management, you’ll carefully monitor how your promotions are affecting your revenue.
If they’re helping, you might continue them for awhile. If they’re not, then it’s time to change up promotions. Airlines have tons of promotions that they can choose from, and it’s sometimes up to the revenue management team to let marketing know that this particular product is going to bring in more revenue for our airline.
Good communication between teams is central to helping maximize revenue, so each and every person involved in the decision on promotions should be able to communicate and act quickly to bring the promotion to life.
Airline revenue management software is among the most helpful tactics to keep your revenue management team on the right track. It will automate many formerly laborious tasks and give you greater insight into how your revenue management efforts are paying off.
These programs are designed to maximize profits across the board, for every seat on your flights, on every single flight. Smart-Science Driven Revenue Management Solutions are what you need to be on the lookout for, as they’re going to help you in this fiercely competitive market.
Revenue management teams need to think about different customers in different ways. There is more than one area that you’re going to be managing revenue. For example, people who shop for airline tickets on their mobile phone are going to be different than folks who buy their tickets in person, through an offline source.
Business travelers will have different needs than those travelers who are flying to a vacation destination. You can maximize your revenue by targeting these different revenue channels and being aware of them and sensitive to them.
5] Constant Change
Revenue management is one of those areas of business where you have to genuinely think fast. If you are slow to implement a price change, you might miss an opportunity altogether. If you don’t offer a promo for an upgrade, that person who would have handed the airline their money might pick a different company.
Revenue management personnel need to act quickly and decisively regarding their inventory and prices, but it’s a lot easier when you have the right tools.
With smart management programs around now, it’s possible to have many chores automated to suit your best interests. And those programs are ready to work right out of the box and really save your team a lot of time and effort.
Revenue management is just as important for airlines as it is for other companies that have physical products like toys or food. Airlines sell an experience, a temporary residence in an airline seat, but they can also sell a lot more on the plane, such as meals, upgrades, and amenities.
First class flights tend to offer the most amenities and breathing room, and then of course airlines now sell baggage space as well, so there’s an ever changing array of things you can charge for, and that means you have services you can switch the prices on in order to get the most revenue.
Management across the board becomes easier with automated programs that track everything for you. Training your staff in how to use this revenue management software will inevitably give you many more sales to come.