Can Pricing & Availability Be More Personalized Without Changing Existing RM Systems?
By Steven Pinchuk Lead Customer Intelligence & Revenue Management, IBM | October 09, 2016
The opinions in this article are my own and do not represent the opinions of my employer, IBM, where I am WW Lead Customer Intelligence and Revenue Management (RM).
There appears to be an inevitable collision between two titans. Traditional segment based RM, which is not currently structured to consider each individual customer's background and both their tactical value and lifetime value, currently does not work with the new breed of customer centric customer triggered one to one personalized marketing. Today an unknown customer usually gets the same price and availability as a known customer.
This article will propose a solution that should be acceptable to both of these titans - where they will actually work together. Both pricing and availability can be more personalized without changing existing RM systems. Also, value added "dynamically blended personalized offers" can be created. The process requires purchasing through the company, who has the known customer's information, so this will also reduce distribution costs.
We will talk briefly about the RM aspects, and briefly describe the new capabilities in one to one customer triggered personalized marketing. There are many other details of this RM approach which can be discussed further. This is just an introduction to a new offspring of these two titans - the merger of RM with personalized customer one to one interactions.
Nothing has consistently driven incremental profits in the hotel industry as much as RM. Since the 1970's almost every Travel and Transportation industry, and some industries in other sectors, have embraced this multi-disciplinary management science. RM teaches an analytics culture and approach. RM uses predictive analytics and proactive optimization of market segment demand, at inventory price points, to maximize revenues and conceivably optimize profits. RM optimizes based on the willingness to pay of market segments.