Revenue Management breaking departmental silos

The other day we talked about Yield /Revenue Management. We saw a generic view, a holistic approach… today let’s work with something a little bit more specific which clearly will prove the necessity of Integration of all departments, employees and software involve in the task of Revenue Management. At the end of the day, this will be our motto “ If we want to offer a better service we have to break the departmental silos”.

When I teach as a lecturer in the university or doing consultancy related to Revenue Management  I always realize that Revenue Management, Customer Relationship Management (CRM) and Loyalty programs are strongly related, but in hotels and tourism destinations they have the tendency to have different silos. 

Jordi- that is the normal thing isn’t it? At the end of the day, we have different software, different departments, different employees…. I always reply. Do you have customers like this?

As you know I strongly believe in the future of Consilience and I think that Revenue Management, CRM and loyalty programs are a good case in point. As a matter of fact I strongly believe that its integration is one of the biggest challenges Revenue Management is facing nowadays!

When we talk about tourism we have to achieve a chain of value working as a single organization. In the same way, if we want to design a better servuction for our hotels we have to break the departmental silos, which means the integration of all departments, employees and software involve in the task of Revenue Management.

To do so, I like to convey the necessity to use two mindsets: Business model and Technological scheme.

Let’s see a few examples related to the business model, shall we?

As I pointed out in this tweet..

Successful strategies in Revenue Management should focus on a LONG term vision. In this article appears an interesting case in point:

In a nutshell “Consider this scenario: A large company, which a hotel has been trying to make inroads with for some time, is trying to book a group stay at a hotel. They want a good deal and the revenue manager is tasked with working out what this is going to be worth to the bottom line. His decision, which he relays to management, is to reject the booking – it is not as valuable as the business it would displace. Is this the right decision? What if the company finds another chain willing to do the deal and for the next five years becomes a loyal and regular customer on that competitor’s books?”    

This is a classic example of short versus long vision. If you want to be prosperous in the Revenue Management field you have to take into consideration ALL the aspects of each deal… Revenue Management’s Framework remember?

Let’s see another example Rhett Hirko, Director of Revenue Analytics, International, Hyatt Hotels & Resorts declared in this article “I have yet to see any hotel company target a consumer based on that customer’s purchase history and demographics (CRM) – I suppose casinos do some of this with their frequent guests, but we aren’t there – yet. We are definitely working on it.”

Do you see?  Integration of departments, people, software and processes will be increasingly important in the near future. CRM information, financial information… the use of segments accountancy…

So, do you want to run in this race? Don’t forget that apart from the business model you will need the other hand the technological scheme!

To get the experience that you will need, you have to get your hands dirty and practice with real software. 
Jordi, but this is better to leave in the expert hands of engineers isn’t it?  I don’t think so, remember what Henry C. Link said “While one person hesitates because he feels inferior, the other is busy making mistakes and becoming superior. ”

So, download a virtual machine player. A good option is vmware then get some virtual machines (or virtual appliances) to play, you can go to virtual machineware market or  go to Bitnami, which is a very good provider of virtual appliances. In there you will find virtual appliances related to CRM. Then download a portal. Liferay would be an excellent option!. 

A portal? YES! Because it would allow you to integrate, in a single spot, information from different applications (a CRM, the loyalty program, etc).

But Jordi!  Can’t I focus on selling rooms to the generic market through generic intermediaries? Well, of course you can but let’s study the facts. Do you believe that you can be a good revenue manager doing ONLY that?

If you follow my advice you will develop two mindsets, the business model and the technological scheme…… You will become a better Touristologist and the SKY will be the limit!

Does Revenue Management seem difficult? It is! For that reason you will need to become a good Touristologist!!!