Include these revenue management strategies in your service marketing plan.
How service marketing benefits from revenue management.
Service marketing is that special form of niche marketing that helps businesses to grow in the service industry (industries that traditionally provide personal, professional, entertainment, or leisure services). Companies such as hotels, restaurants, financial services, and other leisure and travel services often fall into this category. Because this group of businesses relies on customers to partake in their service – rather than buy a product – their approach to marketing can be slightly different than a traditional or even ecommerce business.
Marketers in a service marketing role need to take a very customer-centric approach. Placing the customer experience above all other things is key to this type of marketing. Since customers usually aren’t purchasing a tangible good, there are different metrics of messaging that surround trying to promote a vacation or a financial planner.
Understanding revenue management and how it relates to service marketing can help marketers do their jobs better. A revenue management system works well with service industries, because it helps to connect each purchase “right customer, and at the right moment and price.” This is particularly useful for service industries that have a product with a shelf life – for instance, restaurants and hotels have the same amount of rooms or tables that need to be filled every day.
While it might seem like rooms can’t go bad, if the hotel doesn’t fill a reservation, they lose the opportunity to generate income for that day. The more tables or rooms filled, the more revenue they earn, and the opportunity to fill these spots is only during their hours of operation. They need to manage their marketing so that they don’t generate too much demand and cause unsatisfied customers but are still maximizing the space they do have available.
Here are some popular revenue manager techniques for your business management and marketing teams to consider in their joint revenue increase efforts.
Price creates value. Sometimes the more expensive a service, the more value it’s perceived as having, and therefore the more desirable it is. Smart marketers and business leaders can walk the line between a pricing strategy that allows a company to earn the most revenue from it with also being able to recognize when pricing needs to be changed to reflect changes in the industry or with competitors.
Promotion and price go hand in hand. Promotions are when prices are temporarily discounted to gain attention and more sales. This is seen when hotels drastically drop their prices for day-of reservations to ensure that they can still generate revenue for that day rather than letting a room go to waste because it’s priced too high for the market that day.
This is a very service-marketing specific revenue management solution, because it focuses on where a service should be advertised or sold. Deciding on if your brand would get more attention and convert more observers to buyers through billboards vs. social media depends on several things, including how the company wants to be perceived and if they’re a B2B or B2C business. But finding the right channel to market your business is crucial to growing revenue, because ultimately it can get more attention and more sales for your brand.
Does your business leadership partner with your marketing team to make sure you are focusing on the same things and working towards the same goals effectively? If your brand uses any kind of revenue optimization techniques, you can channel it toward good service marketing that brings results.