The concept of yield management is far from new to the business world, however many companies are still in the process of understanding it’s true potential . Working with major retailers and airports, we are constantly finding new and innovative ways to apply this principle to maximise resource utilisation.
In a nutshell, yield management is about maximising the potential of your available resources. For example, websites such as lastminute.com or airlines that offer people an opportunity to bid for an upgrade of their tickets a few days before the flight do so because they know that these resources will not be utilised otherwise.
Yield management is more about simply discounting the stock that has not been sold past a certain date. By the time companies usually begin discounting the unsold stock, the window of opportunity for purchase is usually nearly closed. However, by looking at longitudinal transactional data, companies are able to analyse patterns and predict the demand, in order to maximise on the efficiency of available resources. It’s about understanding the pattern of un-utilised resources, and the elasticity of price points that would entice people to utilise the services that they would have passed on otherwise.
The opportunities for companies to utilise yield management in their daily operations are endless. From products, to premises, to staff rostering- understanding the trends and patterns of resource utilisation will help companies minimise sunk costs and maximise on their available resources like never before.
THINK has been working with companies to understand how they can strategically position their product offering at lower performing periods to increase uptake, which capitalises untapped profit.
Written by:
Kristy Ihle – Managing Director
For further information on THINK Global Research, please contact Kristy Ihle (Managing Director) at info@thinkglobalresearch.com.
