Posts filed under ‘Revenue Management’
The notion of treating the customer journey as an ongoing cycle resonates for me in Why Experience is Key to Customer Loyalty. The cycle puts wheels (oops sorry) on the notion of maintaining and building ongoing loyalty. The more times successfully around the journey cycle imbues a momentum of loyalty and that great human trait of habit can take hold. (By the way, I am not sure what Lego has to do with it.)
I have touched on the journey idea before in Mapping The Customer Journey.
It is interesting the concept of ‘fairness’ that is introduced by Valeria which is put in context in her linked post re: Lufthansa as “transparency”. This reminds me of an article Tim Baker of Baker Richards and The Pricing Institute recommended written by yet another Tim, Tim Hartford The Undercover Economist, Enough Whingeing About Price Gouging. Tim discussed the concept of dynamic pricing which is the darling of many an airline’s Revenue Management strategies. After mooting dynamic pricing as a way of better managing the finite supply of Easter Eggs to less garden watering bans to the need for a lottery to allocate Olympics tickets, one of the comments by a reader raised a very interesting extension of dynamic pricing that highlights the question of fairness. We are used to passengers paying very different prices for an airline seat depending when it was bought in response to demand and the finite supply. Just imagine the extension of dynamic pricing to the equally scarce commodity of storage for hand luggage, yes you can take on that hatbox madam, but it will cost you $100 extra. Whoohoo, that would cause some air rage (well ground rage ) and accusations of price gouging, before they got airborne. BUT it would help solve the problem of luggage locker hogs on planes and provide space for the rest.
Another poster, Joanna mentioned an application of dynamic pricing that was new to me, street parking in San Francisco. At peak times around special events parking charges on meters are raised in response to the increased demand and finite supply. The result is that if you want a car park you can find one … but you will pay a premium for the privilege. That reminds me of the car park outside a tax office somewhere in Scandinavia (I think) that wanted to ensure that the bays were only used for dropping off tax returns, not parking. Rather than higher charges and fines, they used the Nudge: you could park as long as you liked as long as your car lights were left on, otherwise you would be towed away. Guess what problem solved.
I am sorry, but is it just me? A ticket is a means to an end. There is no demand for a ticket per se, there is a demand to attend an event that a ticket is a licence for and a seat – a location from which to experience the event.
Carnahan says “we don’t know what the value of a seat means to a user,”
“His goal for the Data Science group is to dig through Ticketmaster transaction data to understand the value of a ticket,“
Good luck with that …
Anne Bonnar explains why subsidising every theatre ticket helps the better-off more than it helps those on low incomes in A False Economy in the latest issue of Arts Professional.
An interesting analogy used by Anne regarding free school milk, my wife blames free school milk for turning her off milk for life. Let’s hope the “well meaning” subsidy of theatre is not turning many off theatre for life.
“We have created a false economy which is understood by the largely educated, better off and subsidy-savvy theatre going cognoscenti but less so by the rest of us.“
The trouble is that the manner in which data is set up and collected in many ticketing systems has not been arranged to portray meaning easily. Inconsistent and non-standardised entry of data at event set up is a common problem.