Throughout my years working in revenue management (RM), I’ve found that there are three key revenue management pain points that all professionals in this space experience:
- My team is unable to deliver results
- We don't have enough time to do it right
- The administrative burden of revenue management
While I can undoubtedly wax poetic on each pain point's causes, let's instead look towards tangible solutions you can put in place today.
1. Team is Unable to Deliver Results
Solution: Small steps can lead to big victories
First things first, it is incredibly rare that I encounter a business team that is unable to deliver results for lack of skill or ability. In my experience, when a team is not delivering it is most often due to one of the following:
- Analysis paralysis: This dilemma occurs when a team feels they need to get a 100% complete analysis before action. Inevitably, the analysis will never be perfect or 100% complete, resulting in a lack of action.
- Pushy sales teams: Analysts are often pushed around by fast-talking salespeople hindering their ability to implement.
How do you overcome analysis paralysis and manage the sales team? Without action, nothing can be gained. Of course, you should be double-checking work to ensure analysis is sound, but don't be afraid to take action even if you're only 90% confident.
Remember that often small actions can yield significant benefits and act as a proof of concept to show the work's value, helping quiet your naysayers and create the leverage necessary for more substantial moves.
2. Not Enough Time To Do It Right
Solution: Prioritize the quick wins
I frequently hear business leaders say in response to revenue management solutions, "I don't have time to do everything that needs to happen."
Revenue Management can undoubtedly be time-consuming; however, there are many 'quick-win' opportunities in RM that help get the ball rolling in driving the business forward.
There's no need to get caught in the weeds; instead, look to the 80/20 rule to drive results. Shift your focus to the 20% of initiatives that will deliver 80% of the value.
Keep in mind these three key metrics when deciding what 20% to focus on:
- Size of Opportunity: the opportunity has to be worth your time
- Value Speed: the opportunity needs to provide value quickly
- Certainty of Success: the opportunity has to have a high success potential
Once you've done this analysis, create a list and begin to attack it with purpose.
3. The Administrative Burden of Revenue Management
Solution: Enable a shared service model of administration
The final pain point I regularly see is the administrative burden put on revenue management teams. In a perfect world, the revenue management team would outsource the administrative function of their work, unfortunately, this isn't possible for many organizations.
As a best practice, a shared service model of administration is the best way to approach tackling this burden; however, when that isn't possible, take the time upfront to create automated processes that are repeatable. This will lighten the load moving forward and ensures the team can focus on strategic projects that provide value versus everyday maintenance.
Do any of these pain points sound familiar? I'd love to hear your thoughts on dealing with these and any other common pain points within your organization.
ABOUT THE AUTHOR Michael Stanisz is a Founder at Revenue Management Labs. Revenue Management Labs help companies develop and execute practical solutions to maximize long-term revenue and profitability. Connect with Michael at [email protected]