Revenue management is the practice of maximizing profits from the sale of perishable assets, such as hotel rooms, tee times, airline seats, rental slots, or advertising time, by controlling price and inventory.  If that sounds like what you have always done, it should.  Revenue management does not try to accomplish anything different from what pricing and inventory control staff have always tried to do:  Supply a quality product and be as profitable as possible in the long-term.

Systematic Approach

What revenue management offers that is different is a systematic and comprehensive approach to reaching that objective.  Through the various techniques of revenue management, firms discover they can deliver their products differently and more profitably. 

The basis of revenue management and the diversity of approaches can be seen in the Articles section.  The techniques that are most valuable for a firm are often quite different in each industry, and may even differ among firms in the same industry!

Use Information

Revenue management uses information about customer purchasing behavior and product sales to develop pricing recommendations and inventory controls that produce greater revenues (and sometimes lower costs) and deliver products that are better matched to specific customer needs.  Revenue management is a melding of information-systems technology, market segmentation, probability, statistics, organizational design, business experience and industry knowledge.  Our special approach is outlined in the Services section. 

Process

Firms do not "do" or "not do" revenue management.  Revenue management is a business philosophy and practice that is carried out at many levels.  It is truly a journey of many steps.  Well designed revenue management programs have led to phenomenal increases in the revenues and profits of firms.  Poorly designed revenue management programs have led to frustration, expenditures of resources that produced no benefits, and a loss of competitive advantage. 

For more information about revenue management, please explore the Frequently Asked Questions section, or Contact Us directly.