Rev Up Your Revenue Productivity Engine
I have long touted the benefits of a customer-centric revenue strategy, and this is amplified by the need for a revenue productivity engine that delivers results.
NB: This is an article from IDeaS
With so many data analytics solutions available today for your business, where does one begin? If you follow the money, you’ll find it comes from your customers—your livelihood. Being able to craft the right product assortment at the most compelling prices that keep them coming back will mean continuous revenues, even in tough times.
The concept of a revenue productivity engine begins with a theme lifted from W. Timothy Gallwey’s best-selling book, The Inner Game of Tennis. Tennis is not only a game of endurance and skill, but also very much a game of psychology. The same can be said about creating your revenue productivity engine. It’s imperative to understand your revenue psychology—making sure your revenue performance will equal your revenue potential, minus any interferences—before setting out on the journey. A revenue productivity engine lets you shorten the distance between intuition and action and gets you to richer rewards faster, more economically, and with better buy-in and employee engagement along the way.Click to Tweet | IDeaS Twitter
Think of the revenue productivity engine as a navigation system on your J.O.U.R.N.E.Y.
What is happening in your organization that is making change apparent? Perhaps it is from changes in market conditions, such as a rise or downturn in the economy, increased competition, or it’s become obvious that internal processes are inefficient, outdated, laborious and causing you to lose talent. Maybe your technology is just covering the basics, only handling bookings and distribution, when you know you could be deriving more value from your data.
Take a look outside of yourself and your organization. With fresh eyes, look for new segments that could be served or identify corporate-change efforts that could align business units to work in greater harmony. Decide to make a positive change in your revenue strategy, ensuring you use modern technology to solve your business challenges. Create a realistic roadmap outlining your objectives and corresponding deliverables. Once your teams are on the same strategic path, you will have the commitment and resources you need to have a strong start to your journey.
There are many roads you can take to reach your goals. Become familiar with the available choices and seek the technologies that align with your business objectives. Make analytics your best friend. Don’t rely on hype or what could be. Rely instead on proven performance, using data in a validated and measurable way. Know that not all revenue management systems are created equally. A sophisticated solution will give you the foundation from which you can measure your pace along the journey, drawing from the vast analytical outcomes generated from your own data reserves and the market around you.
Determine ways to motivate and challenge staff during the long-term initiatives that inevitably must be faced on the journey. Unless they are informed with the big vision of the journey, most employees may tend to the same thing over and over, resisting change. As a leader, it is important to empower staff with technology-driven systems that can further their own development and help them to become better contributors. The more you involve your employees in your vision, the more they can be a part of the change, which in turn aligns their goals with that of the organization. These efforts will improve your return on your modern technology investment, while embedding the best practices and standards for full effectiveness and buy-in.
Being nimble is all about being able to adjust to change. And being able to do it quickly. From a revenue management perspective, this is all about making sure you keep processes and standards as focused and adaptable as possible. Remember that revenue manager who was a wiz at Excel and built a whole series of fantastic reports and insights using macros, VBA, pivot tables and other fancy features? Remember when they left and nobody knew how things worked and the entire house of cards they built came crashing down? This is the opposite of being nimble and something you want to avoid at all costs. When addressing your technology challenges, it is important your approach is nimble and the technology you implement can adapt to changing dynamics of the market.
Your path to success in implementing and adapting to technology will, on the one hand, rely on the experience of people and processes you have in place and, on the other, the experience of the providers of technology. Experience can in both cases be both a blessing and a curse. It is important to be able to take a step back and look at your strategy objectively, and more importantly apply analytics to your decision-making. This goes beyond only understanding the options as outlined above, it is all about leveraging experience and combining this with hard facts to reach the optimal conclusion. Strategically, this means making technology decisions supported by sound decision-making, understanding the implications of choosing one path over another. Growing this experience over time will ensure continuing success of your strategy.
What is the yield from the choices you make? This is all about using good metrics to accelerate progress toward your goal, ensuring momentum as the project moves forward. Regular reviews of how your innovative solutions perform are critical to measure success and identify areas that need refinement. There are many black-and-white indicators, such as movement in revenue per available asset and average rate that should be reviewed. Were there market conditions that attributed to that success, or is your new technology producing those results? It’s easier to measure an analytics-based solution because the results can be scientifically quantified. When measuring success generated by manual activity, it can be difficult to determine the origin of the success since it may rely on the skill level of the individual. If that revenue manager were replaced, would the next person be able to provide the same outcome? Additionally, ensure you review the many shades of gray—indirect benefits—that tie to employee performance. While efficiency, improved morale and better alignment across departments are all hard to measure, it can be taken as a positive sign when employees are given time back to work on more strategic endeavors, especially when collaborating across teams and breaking down silos that previously existed.
The revenue productivity engine that will result from your J.O.U.R.N.E.Y will be unique to your situation and your strategy. Ultimately, it is not just a game of tennis—it is about winning the grand slam and creating a sustainable and customer-centric revenue strategy that will lead to game, set and match over your competition.