The Rev­enue Jour­ney - Part 3: Essentials of the Jour­ney

The first and most crit­i­cal part of any Rev­enue Jour­ney is to make sure you have a good or­ga­ni­za­tional foun­da­tion with the right team mem­bers. The mem­bers of the team will have to put rev­enue man­age­ment in place and ex­e­cute all the dif­fer­ent com­po­nents du

Tourism Tattler - - CONTENTS - By Derek Martin.

Iden­ti­fy­ing De­ci­sion Mak­ers and In­flu­encers

Firstly I need to dis­cuss the dif­fer­ence be­tween the rev­enue de­ci­sion maker and the rev­enue in uencer. Both these groups of peo­ple need to be in­volved in the jour­ney, but in dif­fer­ent ways.

The rev­enue de­ci­sion mak­ers are those peo­ple that set the price, de­cide on in­ven­tory al­lo­ca­tions and can ac­cept or deny a piece of busi­ness. They cre­ate the strat­egy for the com­pany how to drive their rev­enues. These are typ­i­cally the Di­rec­tor or Rev­enue, Di­rec­tor of Sales and the Gen­eral Man­ager.

The rev­enue in uencers can be split into two groups, the di­rect in uencers and the in­di­rect in uencers. The di­rect in uencers are those that cre­ate de­mand, like sales man­agers, or the peo­ple that sell over the phone like reser­va­tions teams or peo­ple that man­age the elec­tronic distri­bu­tion chan­nels. The in­di­rect in uencers are the op­er­a­tions team mem­bers. They are re­spon­si­ble for pro­vid­ing the cus­tomer with a good ex­pe­ri­ence, which will re­sult in good on­line re­views. Driv­ing great on­line re­views is a key com­po­nent of ev­ery suc­cess­ful rev­enue strat­egy. Whether a rev­enue de­ci­sion maker or an in uencer, all have a task in the Rev­enue Jour­ney.

Team Roles

The leader in a Rev­enue Jour­ney is the Di­rec­tor of Rev­enue or the Rev­enue Man­ager. They keep the team to­gether, drive the agenda for­ward and make sure that progress con­tin­ues to be made.

The nav­i­ga­tors dur­ing the jour­ney are team mem­bers like the e-com­merce man­ager, the mar­ket­ing man­ager, the sales man­ager and the busi­ness an­a­lyst.

They are ex­perts in their ar­eas and have their ears to the ground. They will help val­i­date trends that are show­ing in an­a­lyt­i­cal re­views and can help the leader to de­ter­mine whether to make a left or right turn. The ex­ec­u­tive spon­sor of the jour­ney is the per­son who sets the di­rec­tion for the trip and sup­ports the team along the way. They help re­move ob­sta­cles and road­blocks and serve as the ar­biter in case of dif­fer­ences of opin­ion on how to move for­ward. This is typ­i­cally the Gen­eral Man­ager at a prop­erty or the CEO/Chair­man at cor­po­rate level.

Size of the Team

I of­ten get the ques­tion when you need a Di­rec­tor of Rev­enue. As a guide­line a busi­ness that makes US$ 5M or more in rev­enue should have a Rev­enue Man­ager. If the busi­ness makes more than US$ 15M in rev­enue you should have a Di­rec­tor of Rev­enue and a Rev­enue An­a­lyst. If the busi­ness makes US$ 25M you add an ad­di­tional mem­ber to the team.

With size and com­plex­ity the team may re­quire fur­ther strength­en­ing. Also com­pa­nies with mul­ti­ple busi­ness units in a sim­i­lar lo­ca­tion, like a city, should ap­point a Clus­ter Di­rec­tor of Rev­enue. The clus­ter per­son would be re­spon­si­ble to max­i­mize clus­ter op­por­tu­ni­ties rather than op­ti­mize in­di­vid­ual prop­er­ties.

Ex­pe­ri­ence of the Team

An­other reg­u­lar ques­tion that I get is what kind of ex­pe­ri­ence the rev­enue per­son should have. The main re­spon­si­bil­i­ties of a Di­rec­tor of Rev­enue in­clude: an­a­lyt­i­cally un­der­stand­ing of the busi­ness and be­ing able to for­mu­late and com­mu­ni­cate the rev­enue strat­egy for the busi­ness. This means that a master de­gree is re­quired, prefer­ably in Busi­ness or Sta­tis­tics. The Di­rec­tor of Rev­enue should be able to com­mu­ni­cate ef­fec­tively with all stake­hold­ers in­clud­ing se­nior man­age­ment of a com­pany, board of di­rec­tors and own­ers.

The dif­fer­ence be­tween get­ting an av­er­age rev­enue per­son and a great rev­enue per­son, who can drive rev­enue cul­ture and op­ti­mize rev­enues ef­fec­tively, can eas­ily make a 5%-15% dif­fer­ence in your rev­enues both pos­i­tively and neg­a­tively. So get­ting the right per­son is crit­i­cal!

In the Rev­enue Jour­ney Part 4, I will talk about cre­at­ing the distri­bu­tion in­fra­struc­ture.

About the Au­thor: Derek Martin is the founder and CEO of TrevPAR World – a hos­pi­tal­ity data an­a­lyt­ics com­pany that spe­cialises in rev­enue man­age­ment. For more in­for­ma­tion visit www.trevpar­world.com

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