Posted on: Monday, January 21, 2002

60 SECONDS ON BUSINESS
Yield management helps make money

By Dr. Drake Beil
President, Solutions Inc.

Last week, I had a hotel chain and a major attraction ask whether I had any yield management ideas to help them make a few dollars more from each guest. Clearly, in tough times, you need to make as much as you can from fewer customers.

Ironically, it's even more important in good times with lots of customers. But too often when times are good, people get careless and casual about yield. That sense of complacency cripples businesses. To fight it, yield improvement should be a top strategic priority.

Increasing yield from your average customer means creating more value. It's making more from the same, and it's vital because if your yield program is better than your competitors, you increase revenues, reduce your average cost per customer, and operate more profitably.

Take a walk through the average customer experience. What does your best customer spend, and could the average customer spend more with you? Good yield management is about increasing your average customer's value to you.

You can appear greedy or annoying if you push too much or too hard.

But often, asking for more business is not only appropriate, it's necessary for the perception of better service, if not for survival.

If you suspect that your average customer might actually buy more from you, and you don't give them the chance, how smart is that?

Wouldn't you like to be sure you are approaching the sales process right and getting the most revenue possible from each customer?

Reach Dr. Drake Beil at drake@60secondsonbusiness.