Don’t assume every customer is automatically looking for the lowest price. In fact, there are many reasons why customers are willing to pay more for products or services they trust.
As a revenue manager (or a small business owner), this is where you come in. Revenue management strategy involves using marketing automation, sales effectiveness, and analytics to determine the best prices for your products.
No matter what kind of business you run, managing monthly revenue can be a challenge. Here are four common revenue management mistakes you’ll want to avoid.
Not Enough Emphasis on Strategy
Do you spend almost all of your time on tactical pricing? There’s a lot more to selling products than simply putting the prices up and down.
If you spend most of your days opening and closing price codes, you’re missing out on the most important aspect of selling products — pricing strategy. Revenue manager software includes detailed analytics you can use to prioritize pricing strategy.
Not Enough Training
Have you been running your business for decades? Does your new revenue manager have many years of experience organizing common business costs?
Experience is essential, but it’s dangerous to think that you already “know it all.” Many managers fall into the trap of thinking that training is only for new hires. They fail to consider the fact that the times, technology, and customer expectations continue to change.
On the other hand, some companies make the mistake of training only their top management and not passing those skills along to other employees. Your receptionists, sales staff, and customer service reps are the ones dealing with customers on a day-to-day basis, not upper management.
If they’re not empowered with the knowledge and training they need, how can they possibly succeed at their jobs?
Underestimating the Customer
Speaking of customer expectations, did you know it takes 40 positive customer experiences to undo the damage caused by one negative review?
To make matters worse, dissatisfied customers typically tell 15-20 people about a bad experience they had with a business. And if they feel compelled to leave a poor review online, that review will haunt you for years.
What’s the point? Don’t underestimate how smart (or how vindictive) customers can be.
Failing to Be Flexible
Every business has a budget to stick to and goals to meet. However, if you’re completely rigid and inflexible, your customers will soon seek businesses that are more willing to work with them.
Whether you’re setting a price for your hotel room or putting together a package for a business function, always hear the customer out. Maybe you can’t accommodate every single request or discount, but can you yield whenever possible?
A positive customer service experience can do much more in the long run than being stingy and saying “No, we can’t do that.”
Don’t Make These Revenue Management Mistakes
Is it time to rethink your revenue management strategy?
Bookmark this list of common revenue management mistakes and refer back to it regularly. If you see any areas where you need to make improvements, don’t hesitate — your business depends on it!
Now that you know how to manage different sources of revenue, what’s next? Our site is full of stellar business and financial advice, so stay right here and continue browsing.