Catalyst for Conversion: the role of revenue management across the customer journey
Very excited to introduce the theme for this year’s conference, “Catalyst for Conversion”, which will explore the role of revenue management in optimising the conversion of revenues across the customer journey. So here we introduce how the Catalyst for Conversion theme was built and how it will play out.
The Demise of Total Revenue Management
For a while I have been reflecting on the concept of total revenue management which calls on revenue management to drive more revenues for each profit centre. What does that mean exactly? More often than not, it means processing out revenues in the same way as we do for rooms, developing KPIs that we can track, creating new acronyms which look comfortably similar to those we use in rooms revenue management (I have done this myself many times), and wrapping these processes around outdated customer segments, built when someone configured the PMS, that only the hotel recognises.
Everyone gets to see the revenue per occupied square metre of meeting space, or the revenue per available seat hour in the restaurant, or the profitability and popularity of this week’s menu items. And all this is good, very good for business visibility. But in reality, what is this, beyond simply moving numbers around, and the big question is: Where does the customer sit in all of this?
This is what Catalyst for Conversion aims to address: How as revenue managers do we think more coherently about meeting the changing needs of customers at each stage of the customer journey, and how do we adjust what we do, how we communicate, and the tools we work with to meet these needs?
The changing needs of the Customer
The message that clearly emerged from Covid was of a new type of customer that was lookig for more experiences. What did this mean? That every hotel needs to build an adventure playground in the back yard? Or offer abseiling down the side of the building? Not at all, thankfully. What is becoming clear is that the consequences of the world closing down for a few years offered people time to think, and in many cases, uncover what really mattered to them as individuals. Now, customers desire to live by their values, and this no longer means a display of relative levels of financial wealth, but rather engaging in activities that reflect their lifestyles and ideals and elicit a feeling of well being.
So, it is not how much they spend, but what they spend it on, that drives a deeper sense of wellbeing, and is a way in which our customers find a greater sense of self validation, a way of staying positive, and feeling good, in a world where so many other factors; environmental, political and economic, are out of their control, but have a huge impact on the way they live. We have seen this only too clearly in the UK where careless political processes rupture economies, and the fallout creates financial misery for the thousands affected.
This in turn is leading to how people view their working lives, their desire to work for companies that are addressing environmental and social responsibility, particularly reflected in, but not necessarily limited to, GenZ and Millennials, and the desire to spend the money that they earn with companies that reflect these ideals.
How do we address the new customer needs?
The keynote speaker, Nathalie Nahai in her book “Business Unusual, values, uncertainty and the psychology of brand resilience” proposes that “resilience” in businesses, that ability for one business to survive over others in an uncertain world, is driven by the ability of that business to use behavioural insights to create the kind of value people will pay for. And that is what we will be starting with at Catalyst for Conversion, and the rest of the day will work on how, and what we need to change to build this resilience.
It is my belief that the role of revenue management is uniquely positioned to identify and validate trends, and respond to these. What we need to do is to learn how to communicate these to our teams, and handover the hugely boring, repetitive tasks to those technology providers that themselves are driving innovation and enabling exactly what we need.
I look forward to discussing this more in a deeper dive over the coming weeks, and welcoming you to Catalyst for Conversion, January 31st 2023, London Hilton Bankside.
For more information visit Opportunity 2023 and secure your seat now!