RM and marketing have typically been two distinct functions but with new ancillary fees, the drive towards personalisation and greater demand for clever merchandising, this is changing.
Marketing and revenue management (RM) sometimes seem to work at cross-purposes. Yes, their objectives are largely aligned around long-term revenue gains but they may focus at different points in the traveller purchase funnel and may also have different time horizons. These somewhat different perspectives can cause conflict.
Let’s first take a closer look at how typically the two functions differ.
- Sophistication versus touchy feely. RM is considered more quantitative; it has historically attracted highly analytical employees who tap into large datasets and who manage sophisticated algorithms, ‘proving’ their approach is ‘optimal.’ Marketing, on the other hand, is sometimes considered ‘touchy feely’ or ‘soft’. This sometimes translates into more visibility within an organisation and more attentiveness by senior executives and property owners to the RM function than to the marketing function.
- Short-termism versus the long haul. RM may have a shorter-term focus. With most bookings occurring in the month before the flight or before the hotel stay, RM manages fares/rates intensively during this period to maximise revenue. RM may rely on cheap tickets sold through OTAs or initiating flash sales if that is what it takes to fill empty seats or hotel rooms. Marketing, as keepers of ‘the brand’, often take a longer-term view, viewing both third-party distribution and a heavily discounted product as potentially damaging to the long-term brand image.
- Data and metrics history vary. Organisations rely on certain, well-defined ways to collect and view data. As RM has traditionally been more data intensive, it has essentially locked in its perspective, focusing on views like days before departure, percentage of group travel, and fare mix. Marketing’s view (look versus book, purpose of trip, demographic profile) typically doesn’t have the same daily reporting or historic metrics.
