Revenue Managers no longer “Boring Number Crunchers”

By. Ritesh Gupta 12th Mar 2014

The role of RM has become far more complex which means today they are more on a par with sales and marketing professionals – and rightly so. In a tough business environment, revenue managers need to take a granular approach and they also need access to analytics. In addition RM teams need to pay close attention to the development of advanced revenue management and distribution systems. Why? Because these can help with decision-making as well as helping coordination with other departments to define a common commercial language.

EyeforTravel’s Ritesh Gupta talks to Daniela Hupfeld, Europcar International’s Group Director Revenue & Capacity Management, about some of the challenges for a fast-changing discipline.

EFT: How is RM’s role is expected to shape up in 2014?

DH: If anything, the role of RM is becoming more and more complex, as it cannot be seen as stand-alone. This is especially true in the area of distribution and related pricing where there is a lot to keep up with. This means, a hotel needs to ensure that its revenue manager has enough personnel and systems that help perform the tasks. My view is that RM is the wrong place to save on costs! And, of course, it is vital that the revenue manager reports to the GM and is on the same level as sales and marketing.

EFT: Considering RM’s bigger mandate today, what do managers need to do to gain relevant knowledge and skills?

DH: It is important that revenue managers are not seen as the ‘boring number crunchers’ of an organisation. In the old days this is how RM professionals were viewed. But revenue management is more than that: it’s all about strategy, tactical actions, implementation and evaluation.

Nothing prevents revenue managers taking on bigger roles of course. It’s just that sometimes the perception of the old days sticks… sales and marketing are the ones doing the business and RMs are the ‘boring number crunchers’.

It’s positive to see that more and more companies are slowly building on revenue management and putting salaries at the same level as sales and marketing executives. Remember though that RM is still a ‘new kid on the block’, whereas sales and marketing has been around forever. I believe that RM professionals have to understand sales and marketing and should also meet clients every now and then to understand what is important for them. Understanding distribution is key too but it’s important that a clear strategy is defined for the property (region, country, company) and that all commercial people act accordingly.

EFT: As an RM professional what do you see as the emerging challenges?

DH: The business gets more and more complex due to online platforms and suppliers. So it’s really important to understand the different distribution pipelines and work hand-in-hand with sales to negotiate with suppliers.

Also, finding a USP for a customer to use direct channels will be a challenge. Intermediaries usually have higher marketing spend and for smaller organisations, in particular, this is hard to keep up with.

EFT: How do you think the ‘triangle’ of marketing, sales and revenue management is working in today?

DH: In many organisations it works well. Mutual respect is key as is open communication. It would be helpful if each executive in each area spends some time within the area of his colleagues in order to understand what they do better.

EFT: What’s the best way to work out a common commercial focus for the sales, marketing, and revenue functions?

DH: It’s important that the executive team, the board or the chief executive is behind this. RM needs to be viewed and treated equally to the other two functions. RM is the ‘neutral’ consultant in an organisation and as such needs to be respected. Sales focuses on the accounts side, marketing focuses on the end-consumer side and RM focuses on the organisation (hotel, region and so on). The business plan and financial result of the organisation is the shared target and based on this the incentives should be put in place, so they do not contradict each other.

EFT: When it comes to aligning and integrating data from many different sources, how can you become more customer-centric?

DH: It is important that you use comparable data. In many cases different data is compared even though it’s not comparable. The question/strategy needs to be clear before data can provide an answer. Being customer centric is a broad approach and requires that data is looked at from different angles.

EFT: Can you talk about the role of analytics in understanding the purchasing behaviour of guests and how it helps to serve appropriate offers at various stages of a traveller’s journey?

DH: Again, it’s important to know what one wants to find out before looking at data. For example, it is important that we understand that a cheap price will not attract customers on a Sunday night as they simply do not want to travel no matter what the price is. Often we try and solve this problem with price, even though price is not the problem. The more we know about customer behaviour, the better we can position our product. Based on demand, in conjunction with buyer’s behaviour, we can tailor make offers. Some buyers are willing to pay a premium price for a premium product, whereas others only look at price. So we need to ensure that we attract the customer that we need at the right time when we need them.

EFT: How is access to real-time information improving the RM function?

DH: Having information in real-time makes things a lot easier for a revenue manager. But it does not replace a good and solid forecast; that is the basis for all your strategy. Still it enables us to react quicker and correct possible mistakes but also to make even more of already successful tactics in a shorter time. More and more info does not always help. Again, it is vital to know what one wants to achieve and access and analyse info based on that, rather than looking at everything and in the end trying to implement too much and nothing really works out.

About Ritesh Gupta

Ritesh is an experienced journalist/ editor with managing, publishing and editing experience across all types of digital and print platforms. From generating original B2B content to ensuring it that it leverages the power of web; I play the dual role of a journalist and a social media marketing consultant. Ritesh joined EyeforTravel in October 2004. Based in

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