Customer-value-based revenue management

A customer value-based airline revenue management approach considering both opportunity costs and misclassification of heterogeneous clients

“…These present and future value contributions, which the provider regards as being relevant (see Figure 1), are referred to as determinants, for example expected contribution margins or customer referrals, and may differ dependending on the underlying concept of customer evaluation (Berger et al, 2006;von Martens and Hilbert, 2011). They are decisive factors in determining the value of the customer for the provider.…”

“…The application of simulation experiments to evaluate different booking control approaches is commonly used in both transaction-based (for example, Weatherford and Belobaba, 2002;Chui and Tsao, 2004;Frank et al, 2006;van Ryzin and Vulcano, 2008;Meissner and Strauss, 2010) and customer-centric revenue management (von Martens and Hilbert, 2011;Mohaupt and Hilbert, 2013). Simulation models can incorporate a large number of variables and allow the calculation of specific decision situations provided with uncertain data and varying parameter values, and finally can show the effects on results.…”

“…However, the customers concerned are heterogeneous, that is, they differ in their worthiness, customer behaviour and their reactions resulting from those provider decisions. Since the beginning of the Journal of Revenue and Pricing Management, researchers and practitioners have therefore advocated a shift from transaction-based control (with short-term willingness-to-pay as sole decision criterion) to a customer relationshipbased allocation and booking control focusing on the customers' long-term value for the provider (Belobaba, 2002;Lieberman, 2002;Hendler and Hendler, 2004;Hoff, 2008;Cross et al, 2011;von Martens and Hilbert, 2011). As transaction-based revenue management concentrates on optimising short-term revenue only, the potential negative impact on the provider's relationship with clients, such as loss in loyalty, trust and perceived price fairness, is often ignored (McMahon-Beattie et al, 2002;Wirtz et al, 2003).…”

Improving profitability: A conceptual model of destination-centric revenue management

“…In hospitality, this concept was born from pooling customer relationship management (CRM) practises with RM, as highlighted by Noone et al (2003), and later developed by several authors (Lieberman, 2004;Hoang, 2007;Venkat, 2007;Vinod, 2008;Von Martens and Hilbert, 2011). In a study by Kimes (2010), practitioners agreed that managing all the potential revenue from a customer will be one of the future key themes within the discipline.…”

A collaborative management of social commerce deals: Decisions on pricing and commission rate with a capacity consideration

“…In the past several decades, various pricing and revenue management techniques have added significant values to firms (Cross et al, 2011). For example, customervalue-based revenue management is widely used to utilize capacity efficiently and establishing profitable customer relationships (von Martens and Hilbert, 2011). However, there are a paucity of studies on revenue and pricing management in this emerging social commerce area.…”