Why is Business Intelligence Important for Revenue Management

Without the knowledge of some revenue management plays a consequential role when it comes to running a business, helping executives hone strategies, policies, etc. However, with growing competition, the market has been looking to fortify this tool with technologies such as business intelligence. To what end? Well, to further fortify their business and improve sales. Here’s how BI can achieve that effect.

1. Inventory: As any business owner will tell you, inventory management is just as crucial to running a business as anything else. In this regard, BI helps companies gain insights about factors that affect their sales based on data collected across the business. BI can also help keep an eye on the entire supply chain, offering business-critical insights and strategies for stocking profitable products, preventing excessive stocks of low-value products, etc.
2. Promotion: BI-driven tools also allow companies to determine potential customers via better customer segmentation, bundling, i.e. offering two or more complementary products as a deal, and improved marketing strategies among other things. These insights, based on data such as wallet analysis, customers’ shopping patterns, internet browsing patterns, and recent purchase history, also seek to deliver personalized marketing strategies. As a result, businesses can offer their customers tailored deals, offer suggestions about seasonal offers, cross-sell value addition products, etc.
3. Pricing: While deciding pricing strategy based on merely demand and price sensitivity may have served businesses well, the truth remains that it is an ineffective strategy. With BI, then, they gain extensive insights about other critical factors such as competitive data, shopping cart abandonment rate, pricing position, historical pricing, revenue, and competitors’ pricing and other data. Such information drives data-driven decisions that are primed to deliver better results in the form of increased conversion rates and also achieve better profits.

To further demonstrate the utility of business intelligence in the context of revenue management, we have also put together a list of some use cases for your perusal:

1. Tourism sector: With help from such tools, operators in the tourism sector gain the ability to gauge customer loyalty, customers’ responses to deals and identify any relevant patterns across segments, geographies, etc. This enables the sector to even out their profits as they move from seasonal periods to non-seasonal periods.
2. Hotels and hospitality industry: In this sector, business intelligence-driven revenue management is used to predict manpower-related requirements, inventory levels, reservations & identify the right room rates among other things.
3. Airlines: With BI in the equation, airlines can successfully determine dynamic pricing policies based on relevant factors such as price sensitivity, geo-location, seat availability, season, etc.

There is no denying that revenue management plays a crucial role in running a business and ensuring its growth. Unfortunately, this task is a tad challenging, at least without the right kind of tools in your arsenal. Now, as the above discussion demonstrates, business intelligence is decidedly among the most potent solutions you will find in the market when it comes to ensuring high levels of effectiveness in revenue management. So, what are you waiting for? Get started on integrating business intelligence in your revenue management system as well! How? Well, the first step would be to look for trusted business intelligence services and solutions consulting company. Their expertise will be a valuable asset on the development journey.

Passionate writer. Love to explore new topics...