Revenue Management & Dynamic Pricing
Revenue Management is essentially the process of maximising the yield from sales where there is high demand and stimulating sales where there is low demand. Revenue Management is not just about raising prices; one of the key challenges that it was designed to address is the perishability of the inventory (once the show has started, the ticket can never be sold). It therefore includes creating lower prices as well as higher ones.
Revenue Management is often applied reactively, but an effective Revenue Management strategy is set in advance. This means pre-setting both the prices and the monitoring that is to be used to judge when and where to apply changes to the prices.
Many “standard” pricing tactics, such as premium seats or Standby, can be thought of as Revenue Management tactics. At the other extreme are the most sophisticated Dynamic Pricing practices. Organisations at either end of this scale work with Baker Richards to develop and implement Revenue Management from scratch, or use the Revenue Management Application to refine their Revenue Management practice.
