The expansion and contraction of revenue. How do we compete and be relevant in the new economy?
Has the robust economy of the past let us get flabby?
Throughout the year I have seen three critical effects from the strong economy from years past and the following contraction in the past year. 1- Sales team’s business acumen has decreased and has seeming fallen back to transactional selling with little understanding of consultative selling. Many have difficulty having a business conversation. 2-Revenue management struggles to make up for revenue shortfalls. Many forgot that Revenue Management only manages demand, not create it. 3- Digital marketing is critical, but still in infancy stages of being considered a demand creator. We need real professionals to be a viable revenue player.
Sales teams should be given a great deal of respect. It is not an easy job. There are the pressures of making goal and keeping full pipelines, but more and more they are struggling to be relevant to customers. In a robust market place revenue management was able to cover many rocks in our sales pipeline stream. Once the demand starts to dry up what has been uncovered is the atrophied sales muscle of how to be relevant in higher-order business discussions.
Newer sales professionals haven’t sold in this tighter economy. Let alone a market that is riddled with third-party intermediaries. Do they know how to have conversations ‘beyond the hotel room’? They also have not been trained beyond what was rolled out in 70’s and doesn’t bare resemblance in today’s market. In many cases there are no pipelines, as they have been completing transactionally. Reduced to answering leads. It is a tough new world and it demands new thinking to remain competitive.
Here’s the good news. There are customers that are yearning and rewarding those sales people whom have the business acumen to help their organizations that bring new thinking into the customer’s buying journey. So, for those who are able to rise to the conversation they are greatly rewarded.
No matter the experience level or talent, this has to be trained and coached.
Digital Marketing is the buzz within the industry and so it should be. Against other industries our industry is behind in reaching our adolescent years in gaining traction. There is a prevailing focus on the point of purchase, rather the point of inspiration, where the customer first things about the possibility of using our product. In this case, a hotel experience.
Why could that be? Many times, our digital marketing or e-commerce has been plucked from Revenue Management where they should and need to be thinking about the point of sale. Marketing is different they have to be thinking about buyer behavior, buying journey’s, point of inspiration. These marketing principles are just as key in the digital space as they are within traditional marketing.
All three compliments and need the other, but are distinctly different in their roles.
So how do we compete in this new market?
1- Sales people must have business relevant conversations. They cannot be transactional. There are companies, alas a new industry that is designed for the transactional sale. They are OTAs. The best way to beat the OTA dilemma is to not play their game and add value to customers beyond the hotel room to create value beyond price. They have to be trained differently than what we did even 5 years ago, let alone 25 years ago to be competitive.
2- Revenue Management is a key function to revenue attainment, but they are dependent on Sales and Marketing to create demand The bigger the pipeline the more effectively they are able to put the right customer, in on the right day, at the right price.
3- Digital Marketing is a function of Marketing, not Revenue Management. The best of class looks at finding those customers at the point of inspiration, not the point of sale.
Digital Marketing isn’t a mystery, but just like any skill and expertise it is important to have a professional in the position. “If you ask for Vanilla, you get Vanilla.” The right professional can create big impact and great return.
4- The three together make up the “Revenue Tri-Fecta” each are needed in the new economy.
There has been a long discussion of what position is the future. The answer is all three. As each play a very different, but important role. If you question whether sales create enough revenue demand, don’t look at the position, look at how to help them be more effective.
For further conversation on this and more get in touch with us. We have worked with many others in transforming and accelerating revenue.