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Revenue Management is an exciting new business process that aims to put the same disciplines into the pricing process as seen in the finance and supply chain functions. In use in niche businesses (airline and hospitality) for over twenty years it is now being used in many other areas to deliver both competitive advantage and significant boosts to revenues and profits.

The SMT checklist

Are you a victim of:

  • customers that have you on the pricing defensive?
  • static segmentation that his costly to continually update and reinvent?
  • a pricing process that is costly, time consuming to implement restricting your ability to exploit minor changes in product value or supply and demand
  • making the effort to move price but never seeing the result on the bottom line

If you answer yes to any of these, read on and then download:

About_Revenue_Management

Revenue Management – The Next Big Thing

Australian companies are foregoing profits due to a lack of disciplined pricing processes. The exception is the travel and hospitality industry, who for years have reaped the benefits of Pricing and Revenue Optimisation (PRO) policies and techniques.

"PRO has far wider applications than merely travel and related industries. It’s time this subject was on the agenda of all senior management."

"A review of pricing processes could easily reward many organisations with a 3-7% increase in profit margin."
said Greg Bywater, Director, SMT Consulting.

Process control and detailed analysis, often imbedded in so many other facets of business management, is generally missing when it comes to the pricing process. In many cases you would be hard pressed to find robust analytical processes to support pricing decisions.

"In most Australian companies pricing decisions are, more often than not, left to the ‘gut feel’ of sales and marketing managers."

Optimising price requires a slight shift in traditional management thinking. Whilst cost management is often considered one of the most important elements of a successful business, pricing and revenue management requires equal emphasis.

"The raw materials for effective pricing and revenue management already exist for the majority of companies, who are data rich as a result of ERP programs and the like. This data forms the platform for a rigorous pricing process that can potentially boost profits by millions of dollars. The right processes simply need to be put in place."

PRO is best practice, disciplined pricing processes, supported by sophisticated statistical software that aids management in determining the price at which products and services should be sold in order to satisfy business objectives.

"The right price will be different for everyone and will change at different times."

"It can be the price that maximises the probability of a sale without leaving money on the table; the price to meet a defined market share outcome; and/or the price to meet a profit target. What most don’t realise is that all of these outcomes can be calculated with precision."
Greg Bywater, Director, SMT Consulting.

At the end of the day, reaching the right price for each customer, for each purchase, will directly contribute to the bottom line and offer a significant competitive advantage.

For further information on our approach, success stories, rates and people please contact: