Article on Revenue Management vs. Social Networking

The March/April issue of Analytics has an article about the effect of social networking on revenue management strategies. I think social networking and the huge amount of information available on the internet have allowed consumers to level the playing field a bit with companies employing revenue management. One key aspect to applying revenue management successfully is having enough information to make decisions. For example, the airlines have vast amounts of historical data about demand, travel patterns, customer seating preferences, etc. to analyze as they make pricing decisions. Now the internet and social networks are enabling the consumer to also mine a huge pool of data. Consumers can alert each other to deals and sales, globalizing what was once local information.

As someone who travels for work a lot, I have experienced the benefits of social networking for travel deals. I regularly check for hotel and airfare deals and often find deals that I would not otherwise know about. These deals are targeted towards a specific (probably highly valuable) customer and are not advertised by the hotel to the general public. But if those customers post the deal online, often any customer can use it. So I am getting deals that are meant to be reserved for certain sets of customers.

Have you gotten any deals through social networking? Do you think that social networking will change how companies implement their revenue management strategies?

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