Pricing & Revenue Management

OP for Spot Transactions

OP for Spot Transactions (OP) permits to achieve higher conversion rates and higher revenue through online and telesales channels. The system ensures that the right offers are always presented to each customer, thus turning more visitors/prospects into buyers and maximizing the revenue from each transaction.

Key features (case of hotels on-line distribution)

These are the typical questions answered by OP for an online distributor of hotel products:

• Which hotels in Paris are “best sellers” for a German mid-week business traveller? For a Spanish leisure traveller?
• How to rank hotels in the web page to maximize expected value for these two types of customers?
• If a requested hotel is not available, which alternative hotel should be proposed to maximize conversion and revenue?
• What was the exposure and conversion rate of a given promotion?
• Which up-sell options prove the most successful?
• Which customers are most responsive to a promotional offer pushed by e-mail ?
• How does conversion vary depending on the price of a given product?
• How is willingness to pay related to booking lead-time?

Implementation and Integration

OP can be implemented in three stages, with tangible benefits at each stage:

• Building the Interaction Database: customer characteristics, stated preferences, offers presented/quoted with sequence/order and customer choice (at the transaction level)
• OP Analyzer: using the previous information to improve sales monitoring and measurement of price sensitivity with actual sales data
• OP Optimizer: building interfaces with the sales management system to optimize transactions in real-time