Why behavioural Science Matters Revenue Management
At the Global Revenue Forum earlier this year in London, we put the customer firmly centre stage as we explored the guest journey and the role of the guest in driving revenues. We listened as speakers opened our eyes to a different approach to managing revenue, exploring the part customer behaviour plays in driving conversion.
But why does it matter?
As a discipline, the term Total Revenue Management is used to describe how a property is performing across different profit centres. While useful, this typically reflects the operational perspective and is often driven by internal targets, such as achieving budget or optimising spend per guest. These measures of success, and the supporting actions to meet these targets, tend to be driven by business needs. Knee-jerk activities are undertaken to drive restaurant covers in underperforming F&B outlets or to close any shortfalls to budget, and as a result, are very much inward focussed. They are driven by what the business needs. But where does the customer sit in this? What’s the role of the guest in revenue strategies? And why should we be exploring this further?
"Reacting to business needs through pricing alone can alienate a customer"
Over the coming weeks, we will share highlights of industry conversations and discussions introducing the importance of understanding customer behaviours when developing revenue strategies. While nothing new, this shift in focus is gaining importance as guest behaviours evolve, requiring a different approach to managing revenue. So watch this space!
Revenue strategies, if they are to succeed, need to be underpinned by an understanding of customer needs and behaviours as well as meet business requirements
Understand more about the customer's role in shaping revenue strategies
For those looking to deepen their understanding of the customer’s role in shaping revenue strategies, our online learning portal, Revenue Academy, digs deeper into price positioning and the revenue-customer connection. Understanding the psychology behind customer purchase decisions really is an indispensable tool in your revenue toolbox and one that, as a discipline, we can’t afford to ignore.
Head over to Revenue Academy where Module 12, Price Positioning and Psychological Pricing will equip you with a greater understanding of the subconscious pricing triggers that drive customer behaviour and how you can influence these.