OneSource Consulting

Revenue Management & Pricing Optimization


 
 


Revenue Management


 
 

Revenue Optimization is the management of inventory, demand, distribution channels and prices to maximize profit over the long term. It’s focused upon selling the right product to the right customer at the right time at the right price. This approach was first developed for the airline industry in the 1970′s with outstanding results. One of the major airlines increased their annual net revenues by more than $500 million per year! Over time these strategies and techniques spread into the hotel industry, and others, and today it has become a highly coveted strategy used by most management in the Fortune 500.

 

Revenue Optimization involves the following activities:

  • Demand data collection
  • Demand modeling
  • Demand forecasting
  • Sensitivity Analysis
  • Pricing optimization
  • Change implementation and distribution

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    View our Revenue Optimization video:

     

     

     

    For example, in the Airline industry.

  • How many seats to make available at each of the listed fares, depending on the OD pair, time of year, time of week, remaining seats available, remaining time until departure
  • What contracts and prices to provide to corporations
  • How many seats to make available to consolidators and travel agents, and at what prices
  • How much capacity to make available to cargo shippers and freight forwarders, and at what prices

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    Typical Fortune 500 companies have experienced a 3% to 9% net revenue increase, with almost no related cost increase, from employing these strategies. Most of them have experienced an $11 return for each $1 spent for their investment in Revenue Optimization (varies by company and industry).

     

     

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