The COVID-19 pandemic has left many industries at the brink of collapse. Recent months have also shown us the importance of predictions. Currently, you need an effective strategy to make up for previous losses as much as possible. You have to think your actions through and use all available tools. However, you should hurry as there is no time to lose. How can you do it? You must understand the importance of revenue optimization. Obviously, it’s all about Revenue Management (RM) which, in the broad sense, helps you increase revenues and reduce costs.
If you have proper tools, you can really make a difference. Such tools include Revenue Management Systems (RMS). These systems save your time and provide you with vital information allowing you to conduct and grow your business. But the most important thing is to understand why Revenue Management is the future in every business sectors. Many companies are barely beginning to realise the existence of RM, so it’s worth to give some of its aspects a closer look. Here are some tips on effective Revenue Management. Find out how you can help your company.
1. You won’t get far without optimization
In every industry, it’s crucial to sell the product at the right price. If you can sell it at a higher price, and the customers are willing to pay, you should do so. It’s not about taking advantage of the situation, but adapting to the market. Especially, if the market is very dynamic and depends on many factors.
2. Analyze your yesterday for a better tomorrow
If you conduct a good analysis of the past and come to relevant conclusions, then you are on the right track to secure a better and more profitable future. Therefore, you should acquire adequate information on the booking trend growth in a given period (e.g. during an annual event) so that you can optimize prices and achieve maximum revenue.
3. Fast like a racer, precise like a surgeon
Revenue Management values responsiveness. But the accuracy of decisions is more precious. You need to react in real time, immediately, but also successfully. What are the benefits of acting quickly if your final decision is wrong? You may suffer losses which will be difficult to make up for.
4. Get ready for anything
What happens when your business largely depends on many external factors such as weather, events or reputation? You must consider each of them as they can determine your success or failure. If you think that bad reviews or even a rainy week does not affect your business, then you are wrong!
5. Keep your friends close and your enemies closer
You must know how your business ranks when compared to your competition. Use the information about others and turn it into your success. Maybe you need a new offer or another way to promote on-line? You should keep an eye on your competitors’ actions to get ahead of them.
6. Keep your feet on the ground
If you want to get somewhere, you have to know where you are. Take your time to learn more about your business. Decide what you already have and what you want to achieve. Don’t miss the bigger picture of what is going on in your company. In addition, you need specific statistics. Then it’s time for analyses, more analyses and even more analyses. They will help you accurately predict certain types of market behavior and prepare for them.
7. Every product counts
Sometimes it’s enough to slightly change a product that brings little revenue. Perhaps you could choose a different selling method, add an eye-catching slogan or skilfully present some added value for the customers. Look at products from their point of view. Find out what the customers want or what they need.
8. All that glitters… – choose wisely
You don’t always have to make customers choose you. In some cases (e.g. group inquiries), you should be the one choosing your customers. Sometimes it’s better to turn the first customers down, even if they will take all the rooms at a low price, providing low revenue. Maybe you should take two medium-sized groups at a higher price instead and leave the others for leisure?
9. Ignorance is bills
Check which expenses you can remove from your bills or at least keep them reduced. Give up the slogan “it’s so because it has always been so”. If you carefully examine all the processes, you will see how many things could be simplified. Your reward will be accumulated funds for other activities.
10. They say: don’t take short-cuts. But maybe… take the fast lane
The secret lies in having appropriate tools which can gather, process and generate data on their own. Then you can devote your time and energy to the thorough analysis of such data. So the system will take short-cuts (successfully!), while you can react faster and more efficiently.
As you probably remember, Revenue Management is about selling the right product at the right price to the right customer at the right time. Everything must harmonize and make sense. In the current business environment, it is the only key to success. You can build it by observing your surroundings, drawing conclusions and making correct decisions towards a better future.