Developing your revenue management and pricing team

Grow vs. hiring talent

As the industry has evolved significantly, many companies are facing the challenging realization that their revenue management and pricing team is no longer equipped to seize all commercial opportunities. What approach should be adopted for a successful business transformation?

Pricing and yield management are crucial domains for companies seeking to optimize their revenue and competitiveness. Faced with complex challenges and agile competition, organizations are confronted with a strategic decision: to develop the skills of their internal team or to inject external expertise, through recruitment or with the use of consultants.

Each approach has its advantages and challenges, offering a difficult choice for business leaders. In this article, we will explore the different facets of this crucial decision, examining the opportunities offered by internal development, the benefits of external skills, and emerging hybrid strategies.

Employee development: cultivating talent internally

Internal talent development in the complex fields of pricing and revenue management relies on a subtle alchemy of mastery of technical expertise, data analysis skills, and for management positions, leadership capabilities.

Technical expertise refers to understanding the specificities of the industry, market insights, consumer behavior, and proficiency in inventory, pricing, and distribution systems.

Data analysis skills allow for aligning technical expertise with the company's strategic objectives through quantitative data, enabling informed and quality decision-making.

Cultivating these skills internally requires continuous investment in employee training and development, as well as a technological infrastructure capable of processing vast amounts of data in real time.

Companies that successfully develop their own internal experts benefit from significant advantages, such as increased employee engagement and excellence in managing continuous process improvement projects.

However, this path to internal expertise is not without its challenges. The costs associated with training and implementing sophisticated analytical systems can be substantial. Additionally, the time required to reach a level of competence to navigate the complexities of pricing and revenue management can be lengthy for certain employee profiles.

Companies opting for internal development must have a long-term vision and be prepared to invest not only in their human resources but also in the time needed to achieve a level of expertise that ensures strategic and competitive decision-making. This approach is particularly relevant in companies where employee turnover is low.

To embark on this process, it is crucial to have a clear vision of the current skills of the employees and to measure their ability to evolve in line with industry developments.

If observation reveals that a long-standing team currently does not meet the professional standards of its industry, it is important to recognize with clarity that it is unlikely to reach the required level without external assistance.

Regarding data analysis skills, our experience suggests that individuals with limited skills in this area rarely have the opportunity to develop them. While it may be possible to provide training for the use of data analysis tools such as Excel and business intelligence solutions, improving the ability to read and understand the business implications of numbers is a complex task.

From our perspective, these skills are inherently linked to a cognitive thinking pattern that should have developed at some point during education or emerged naturally in the professional context. Of course, this stance cannot be considered a universal rule. However, before embarking on prolonged and costly investments in training and coaching, it is preferable to have a clear assessment of the likelihood of success, to be compared with the costs and probabilities of success associated with external recruitment when feasible.

In this case, an external diagnosis, such as the one regularly conducted by Yield Tactics for numerous clients worldwide, will help answer the following crucial questions:

- Do team members have the ability to evolve to meet the required standard?

- If yes, how, and within what timeframe, with what support, and for what budget?

- If no, what external skill injections are necessary?

- The implications associated with this type of diagnosis may include:

- Reorganization of roles and skills around more efficient business processes

- Implementation of a training or development program

- Recommendations for external recruitment for current or future positions

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Calling upon external expertise: options to consider

When internal skill development proves to be too complex or time-consuming, companies often turn to external expertise to meet their pricing and revenue management needs.

- This approach offers several alternatives that can be combined:

- External recruitment

- Engagement of consultants to address operational challenges and develop a plan to achieve the desired level of excellence

- The implementation of specialized interim managers to implement recommendations from the consulting service, and/or to meet short-term resource needs while waiting for external talent to arrive or for the existing teams to develop their skills.

External recruitment can be a viable solution for companies looking to integrate permanent experts into their team.

However, it can be challenging to find candidates who possess both deep technical skills and a thorough understanding of the company's industry. In many cases, geographical location, limited company visibility, or constrained salary structures make external recruitment extremely difficult.

On the other hand, engaging consultants or interim managers offers immediate flexibility and expertise. These professionals bring with them a wealth of experience from various companies and industries, enriching the organization with new and innovative perspectives.

Moreover, specialized consultants can be hired for specific projects, allowing companies to benefit from precise skills without the costs associated with permanent recruitment.

The hybrid model: the best option for optimal short and long-term results

Given the increasing complexity of the pricing landscape, many companies are opting for a hybrid model, combining internal development, key recruitments, and customized consulting and coaching offerings. This model offers unparalleled flexibility, allowing companies to cultivate their internal talent while leveraging external expertise when necessary, such as for leading a business transformation project.

The hybrid model acknowledges the value of long-term employee engagement. Coaching offerings from Yield Tactics, for example, provide personalized support to mid-level managers, helping them refine their skills in pricing, revenue management, and yield management.

These coaching programs offer tailored support, combining technical expertise with a deep understanding of the specific needs of each individual.

This model is often associated with customized on-site training sessions. This approach stems from the clear recognition that current teams are not at the desired level, while still firmly believing in their ability to improve, demonstrating confidence in them by making a significant investment in their professional development.

Similar support is also available for executive leaders in pricing and revenue management departments. In this case, we refer to them as special advisors whose role is to support decision-making by providing expert advice and shedding light on possible choices, primarily based on their extensive professional experience.

The advantages of the hybrid model are manifold. Internal teams can continue to grow and evolve while benefiting from the expertise of high-level consultants. Financially, it helps to limit expenses to a defined period of time, whereas hiring external talent entails perpetual costs that extend well beyond the transformation project.

Thus, the hybrid model promotes positive team engagement while avoiding internal reorganizations and injections of external expertise that may lead to frustration among team members and incur high structural costs.

Do not underestimate the history and the environment

During our consulting missions, we are regularly faced with situations where top management does not fully grasp the challenges of revenue management and pricing.

This is particularly true in sectors where yield management techniques rely on complex historical data sets, the relevant interpretation of which cannot take place without understanding the historical context of past actions.

It is important that the organizational approach be balanced, subtly blending the knowledge of long-time employees with the skills injected by newly recruited talents, as well as young recruits with little experience who have the potential to develop their skills and become the managers of tomorrow.

The upskilling of a Revenue Management and Pricing team must also be integrated into a broader transformation plan where the skills of related departments evolve at the same pace.

It is common for us to encounter situations where senior management believes that the RMP team is not delivering, but upon closer examination, we discover that the source of many problems lies elsewhere in the organization: sub-optimized capacity scheduling, imbalanced budgeting exercises, underperforming sales department, outdated technological infrastructure.

It is then crucial to allow the consulting service to "overflow" into other departments, with the support of a very high-level sponsor within the organization, and to diligently address any identified issues. If this is not done, the impact of the consulting service will be diminished, and the external talents recruited may quickly become demotivated and seek to leave the company.

What approach to adopt?

The choice between internal development, engaging external expertise, or adopting a hybrid model depends on several key factors specific to each company.

Firstly, the urgency of the need plays a crucial role. If a company needs to quickly strengthen its pricing capabilities to respond to a market change or a new business opportunity, engaging specialized consultants will be the quickest and most effective response.

Secondly, the company's budget is a determining factor. The costs associated with recruiting and integrating permanent experts can be significant, while engaging consultants offers budget flexibility that allows for more precise cost control.

Coaching offerings, such as those provided by Yield Tactics, offer a more economical solution, with the advantage of ultra-customization.

The nature of the skills required is also a decisive factor. If a company is looking for specialized skills for specific projects, external expertise will be the best option.

However, if it aims to develop skills in the long term, training, coaching, and internal development may be more relevant.

Finally, the company's ability to manage and integrate external resources plays a major role. Some companies already have a successful culture of integrating external consultants, while others may find the process more complex. An experienced partner like Yield Tactics can facilitate this integration by providing support and advice tailored to each stage of the process.

Conducting a diagnostic is always a good starting point for defining the best approach to implement.

A flexible range of services to support the development of Revenue Management and Pricing teams

Service Description Advantages Disadvantages Relevance
CONSULTING Provides strategic advice on addressing a challenge or seizing an opportunity. Strong external expertise. High return on investment. Significant cost Team's ability to implement recommendations. Need for a diagnostic as a starting point Business transformation. Change in pricing strategy.
TRANSFORMATION Assistance with redesigning and modernizing yield and pricing business processes. Project management. Rapid improvement in operational efficiency. External project supervision that candidly exposes risks and barriers to success to senior management. Resistance to change. Skill injection to support the transformation. Industry upgrade. Strategic reorientation. Market adaptation.
COACHING Supports individuals in their professional development in line with company objectives. Development of skills and competencies within the company's context. Results depend on employees' ability to progress and a healthy managerial environment. Support identified talents with potential.
ADVISORY Provides specialized advice in Yield Management and Pricing. Specialized expertise in a specific sector (airlines, hospitality, etc.). Risk of disconnect from operational reality if not preceded by a diagnostic. Leadership with little experience in Revenue Management Pricing.
RECRUTEMENT ASSISTANCE Facilitates the recruitment process for qualified personnel. Time-saving. Decreased risk of failure. Success depends on the attractiveness of the company. Expansion of the RMP team. Need for specific skills.
TRAINING Off-the-shelf or customized training to provide both theoretical knowledge and operational reflexes. Rapid acquisition of new skills. Team's ability to implement the content of the training into their daily routine. Training for budding talents in the fields of Yield and Pricing. Enhancement of internal experts. Adoption of new processes and work organizations.
PROCESS AUTOMATION Integrates automated solutions to support team restructuring. Experts bridging the gap between business needs and available technological solutions. High initial cost. Long-term investment. Digital transformation. Streamlining tasks and workforce.

How to engage with Yield Tactics

By including Yield Tactics in all your RFI and RFP, you are ensured to receive in a short time a solution proposal tailored to your needs that will deliver predictable and timely business results.

Yield Tactics’ Senior Consultants carefully study all business solicitations and respond positively to those that are a good fit for the skills of our available consultants. They particularly excel in delivering high return on investment for short-duration projects, combining smartly on-site and remote presence. In addition to your core requirements, we can propose a remote preparation work package, as well as implementation follow-up, coaching and post-service health check.

The easiest way to get in touch with us is through one of our continental points of contact to book a scheduled video call at your earliest convenience with an Airline Tactics Senior Consultant who will take the necessary time to understand your business requirements. You can also send us your RFI or RFP directly by email.

Once your requirements are communicated to Yield Tactics, you will receive a business partnership proposal within 2 to 5 business days.

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