The best advice on Revenue Management isn’t worth much if the recommendations go nowhere. But that’s what happens at some companies, where the best laid plans of Revenue Management are ignored or forgotten because there was no organizational buy-in.
Experience has shown that Revenue Management can only be successful when it walks in lockstep with change management. After all, even sound tools, mathematically perfect analytics and, instantaneous updates are meaningless if nobody embraces the solutions or looks at the updated insights.
Companies can insure that Revenue Management becomes part of their culture by focusing on these four key aspects of change management:
- Vision for Change: Companies must establish a Revenue Management vision for change. First, define the opportunity to improve your company’s pricing strategy, inventory allocation, discounting and promotional decisions. Then, produce a one-page document outlining your vision for transforming current strategies into future best practices. Finally, establish a game plan with clear milestones and returns at every stage of the Revenue Management process.
- Pressure for Change: It is not enough for companies to “wish” for Revenue Management change; instead, they must create pressure for it. Managers can ratchet up the pressure by asking colleagues questions to highlight shortcomings in current pricing and Revenue Management strategies. They also should point out the (often dire) implications of failing to change, and utilize compelling events, such as earnings releases and competitors’ actions, to motivate individuals to change.
- Capacity for Change: Companies can get employees geared up for change by getting their early input and providing them with conceptual training. Next, remove obstacles in their way, such as system limitations and misalignment of sales force incentives. Companies also would be wise to drive employee ownership by constantly seeking their feedback, and to create short-term wins to justify the innovative pricing solutions your team has recommended.
- Anchoring the Change: Once Revenue Management change is underway at your company, the best way to make it lasting is to provide anchors for the change. This can be done by recognizing and talking about successful pricing and Revenue Management stories, building upon previous Revenue Management strategies and quantifying the revenue uplift.
In summary, it’s better to move forward with solutions to some of your problems than continue to delay until you have the answers to everything.