Skip to 0 minutes and 22 seconds Let’s talk about the future of revenue management. How do you see that future? Will revenue management be a generalized practice? Which sectors are, according to you, the ones that are the most likely to adopt revenue management and that not doing that today? First you won’t be surprised by the fact that I don’t imagine a pure RM vision. Today,
Skip to 0 minutes and 56 seconds I profoundly think that revenue management and customer relationship management will converge in a way or another. If you think about it, the revenue management is a capacity centric vision of the company. You try to find a good mix to feel your capacity up. On the opposite, the customer relationship management tools are customer centric. They want to gain one euro at every sale and
Skip to 1 minute and 38 seconds control the loyalty of the customer, control the turn, control many things… knowing the context of a few customer and the global state of your customer.
Skip to 1 minute and 54 seconds So, for revenue management,
Skip to 1 minute and 58 seconds getting closer to a customer relationship management perspective, might bring really a new revenue.
Skip to 2 minutes and 8 seconds What the use of a very sophisticated revenue management tool, that help to gain 1. 5% of revenue when you customer would be really pleased to pay 5% more just because on the Google list, the product is still the first one, and the second one is more expensive. So, some hybridization will have to be performed at the crossroads between RM and CRM.
Skip to 2 minutes and 47 seconds Some companies, today, some e-retailers, for example, are very efficient in term of price engines.
Skip to 2 minutes and 58 seconds Large retailers, like Amazon or CDiscount in France, knows how to trigger some special tricks, or special offers, looking at the cookies of the customer, or the history of the customer. There is always a capacity constraint somewhere, the audience, the global wallet… There is always a capacity constraint. And, it’s my view, they should investigate a little more, looking at this constraint likes supply chain constraints, sourcing constraints, of course inventory constraints… So they also have a path to get closer to the RM practice. So, my vision is those two fields will get closer and closer in the coming years.
Skip to 3 minutes and 57 seconds A final question: what advice would you give to people willing to do revenue management in their business? First, accumulate data at the finest grain possible. Accumulate. Then, be sure, make sure you have inside guys knowing the semantic, the business semantic of this data, then, clean the data.
Skip to 4 minutes and 26 seconds After that, don’t good too fast. Take some time for analyzing, assessing, the forecast accuracy of your business. What is forecastable? What is not forecastable? For one hundred of campsites, maybe twenty are really forecastable, and eighty are not. So, there is no one-size-fits-all algorithm. You have to make a choice about that.
Skip to 4 minutes and 57 seconds Then, used the basic rule: descriptive, predictive, prescriptive analytics, year by year,
Skip to 5 minutes and 8 seconds to avoid deceptive technology. So don’t listen to the consultants… promises. Don’t listen to the editors… phantasms. And do it step by step. It’s a lot of money. It involves lots of people. You will not do it twice. Take your time.
Skip to 5 minutes and 37 seconds There is no reason why you will not have some gains year by year and increasing your gain if you follow such kind of trajectory. So, in the end, the most important of
Skip to 5 minutes and 49 seconds all, invest in qualified human resources, and maybe don’t go take them in the very sophisticated industries. If you don’t know your business, your revenue management levers of your business, maybe it’s better to have generalists resources, discovering the business with an intellectual honesty. Thank you very much Benoit, for sharing your experience and your views on these topics with us. Thank you very much for all this environment. Thank you. Bye bye.
Business talk: RM and Customer Relationship Management
Will revenue management become a generalised practice? Which sectors are the most likely to adopt revenue management? How can revenue management be implemented in a business?
Benoît Rottembourg (Eurodecision) shares his vision for the future of revenue management as he sees it, based on his experience.
In his analysis, some companies should integrate two visions of their customers. Can you identify these two visions?
Join the discussion
In response to the above question, share your interpretation of Benoît Rottembourg’s explanations. Do you share his analysis?
Benoît Rottembourg is the creator of and currently leads the “Pricing and Revenue Management” branch of Eurodecision.
He holds a Master’s degree in Computer Science from a French engineering university and a PhD in Applied Mathematics from Paris University. He teaches pricing and revenue management in some of the most prestigious universities in France. He has been an expert in revenue management for many years and has developed a revenue management platform for the camping industry, which is the leader in Europe.
© By ENAC - Christophe Bontemps CC BY-NC-SA 3.0