The development of e-commerce and the increasing competitive pressure in some business sectors allow pricing and optimization key issues to remain competitive. Pricing techniques aim to answer the following questions: What criteria is necessary to set a price? What is the price impact and the price signal? How can the perceived value be optimized? What pricing strategy should be adopted? Revenue management methods optimize the filling and the turnover by adjusting prices in real time.case study
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Pricing & Revenue Management
Sia Partners dedicates a team of experts to assist private and public companies in defining their Pricing Strategy, deploying and evolving their Revenue Management Strategy, and applying Revenue Integrity. Our experts use Big Data and innovative techniques.
Some major changes are taking place nowadays in the sectors of Travel, Hospitality, Retail, and Culture. These industries are forced to adapt or improve their strategies in terms of Pricing and Revenue Management, to face the following evolutions:
- The competition is fiercer than ever with the multiplication of distribution channels, the entrance of new actors from the sharing economy, and the persistence of low-cost models that constantly widens their target markets.
- The quantity of data available is increasing, which can be complex to integrate and exploit. One of the main challenges for Revenue Managers will be to successfully add value to these new sources of information.
- New reservation behaviors are emerging amongst consumers: last minute booking, use of price comparison sites, checking for customer reviews…
- Offers and services become more personalized, to the point where fare classes are sometimes no longer suitable: a refined customer segmentation is required, and the pricing models are thus becoming more complicated.
Sia Partners has a solid experience in Pricing and Revenue management with references in many sectors: airlines, railway, hospitality, tourism, cruise, ferry, theatre, and retail among others.
Moreover, Sia Partners disposes of significant R&D investment: Revenue Management implies a constant technology watch (in order to keep up with techniques and tools), as well as business skills, knowledge in statistics and Big Data. Sia Partners has consultants specialized in Revenue Management and in Big Data practices.
Our team assists companies in the following activities:
- Offer Management: Review and auditing of the existing price structure (content, services, customer segmentation, Terms, and Conditions), pricing mix assessment
- Sales performance: analysis of sales for the various segments, distribution channels, markets, and seasons
- Demand forecasting and capacity planning
- Designing of pricing models based on customer segmentation, markets, products, and channels among others
- Discount and special offers policies
- Pricing strategies for international: consistency between countries, currency challenges
Deployment and evolution of RM:
- Implementation or evolution of a Revenue Management strategy in line with the business pricing strategy
- Definition or transformation of RM processes and of their articulation with other departments (sales, marketing, IT, among others)
- Organisation and Governance of RM function
- Design and deployment of simple and efficient IT solutions to pilot the RM strategy (Excel, Qlik, Tableau), integration into the IT ecosystem (reservation system, distribution)
- Change Management: definition of skills, training of RM analysts, coaching, internal and external communication
- Strategy assessment and management of innovation project within Pricing and Revenue Management functions: Integration of CRM data into RM strategies & Dynamic pricing experimentations
- Competition tracking and integration into the Revenue Management System
- Integration of open data into Revenue Management models
- Implementation of Big Data POCs (using Agile methods): predictive models, Customer Lifecycle Value, and machine learning
- Administration policy for free items: budget follow-up, demand, and offer flow tracking
- Pricing process: reliability of pricing communication, of emission, re-emission or refunding
- Tariff control: reliability of sales auditing, implementation of good practices
- Administration of group sales and allotments: definition of commercial policy and collection processes.
Please contact us for receiving our presentation booklet on Pricing & Revenue Management.
Defining a Pricing and Revenue Management strategy
An administration department decided to increase its revenue streams to make up for the decrease in public funding. We analyzed its sales data, segmented its client base, studied the price elasticity price and delivered a new revenue management model.
Implementing a Revenue Management strategy
Revenue Management techniques allow transport producers to control their inventory and optimize their income, typically by opening and closing fare classes depending on observed or forecasted demand. Sia Partners has developed significant experience in helping transport operators set up their Revenue Management strategy and implementing automated systems to perform the optimization.case study
Sia Partners assisted several European train operating companies in putting in place a Revenue Management System (RMS).
These projects included in particular:
- Connecting the RMS system to the client’s Inventory System
- Working with the client to define the most relevant strategies based on their market specificities
- Providing a business case oriented training to client’s team and supporting them in the first weeks of using the tool.
Using dynamic pricing
Dynamic pricing is an emerging trend in the digital economy, in particular in retail, fashion, public transportation or entertainment industries. Prices can now vary on a daily/hourly basis according to several criteria such as global demand, product availability customers ratings, …By setting the highest “good price”, dynamic pricing help companies improve their profitability while offering greater flexibility.case study
Sia Partners implemented a specific pricing solution for a tourism company: it allowed to change prices on a daily/hourly basis, based on supply and demand. This new technology is a key contributor to the commercial strategy which aims to offer a more flexible pricing approach. The implementation of this dynamic pricing solution offers a wider range of products choice to the end customer.
Market testing for new pricing strategies
To keep up with market transformations and disruptive competitors, companies must regularly innovate and create new offers. Because they can have radical consequences, large-scale pricing evolutions must rely on rigorous multifactor market analysis to accurately predict customer engagement.case study
SIA PARTNERS has helped a national transport company to redefine its pricing strategy by conducting a trade-off survey on a panel of 5000+ travelers. Results have been used to compare several strategic orientations, and to construct the new price framework according to customers price sensitivity, quality of service, and regional economic situations.
Using competition data and meteorological data
By enabling a better understanding of demand’s drivers, the prediction techniques contribute to improvements of the strategic decisions taken in companies. Moreover, the increase in the volume of the computable data link to time-sensitive phenomena (such as competitive prices, meteorological data, clients’ opinion) made the prediction techniques more accurate and more relevant. The outbreak of data visualization tools enabled people to have access to this data and analysis and thus link this data to help them make the right decision at the right moment.case study
A European train company decided to use new data sources to make pricing decisions. We delivered a tool to capture data and visualize data competition prices and meteorological data, studied the impact of this data on demand level and delivered a data visualization tool including strategic pricing recommendations.