Many entrepreneurs find it hard to make decisions regarding their prices. They wonder if raising the rates can affect their revenues and market positions. This is when yield management comes in handy. What is yield management and how to improve it? Keep reading to learn more!
What is yield management?
Are you asking yourself, “what is yield management”? In simple words, it’s a dynamic pricing strategy designed to maximize the revenues (or yield) from a specific inventory. This is possible thanks to understanding the user behavior and finding a happy medium between services or products and their prices.
So, what is yield management? In a nutshell, it’s about selling the right products or services to the right people, at the right time.
7 ways to improve yield management
Since you know what yield management is, it’s time to discuss the methods of improving it. For this purpose, you should:
- make decisions based on actual data, not assumptions, or predictions,
- implement a variable pricing strategy and benefit from dynamic pricing,
- implement various restrictions that will, e.g., limit the number of products customers can buy at once,
- track your competitors, their prices, and strategies to ensure that you stay at the cutting edge,
- adjust your pricing to the popularity of specific products or services. Think about demand and user preferences,
- analyze market trends, seasonality, and needs of the customers,
- make sure that you continue selling your products or services. Although they shouldn’t be too expensive, you should also avoid situations where you don’t sell anything at all.
What is yield management? It’s a popular strategy that helps to optimize the revenue. In yield management, it’s crucial to change the prices depending on the trends, seasonality, user behavior, or market situation.