Pricing and Revenue Optimization: Maximizing Staff Effectiveness

Given the significant impacts that pricing and revenue optimization programs have on a firm’s profitability, it may come as somewhat of a surprise that rather little has been written about the impacts of staff effectiveness on such programs or the tactics and strategies that can be adopted to increase staff effectiveness (Okumus, 2004). Further, the criticality of staff effectiveness has been widely acknowledged, as “poor organizational planning is often the reason cited for the failure of a Revenue Management implementation, and poor training is frequently blamed for subsequent inadequate performance” (Talluri and Van Ryzin, 2004).1 Indeed, based on the authors’ experience over the past 25 years in more than a dozen industries, we estimate that superior pricing staff are likely to enable revenue gains of at least 1/4 percent and perhaps as much as 3/4 percent of revenue (excluding benefits resulting from improved decision support tools). This chapter identifies key principles that we have found enable staff to perform better and generate greater revenues.