Read the interview with Emmanuel Queugnet, Vice President RM and Distribution at HOP! He shares his experience in Revenue Management and with N&C!
How important is Revenue Management at HOP!
Like any airline, the Revenue Management tool is central to the organisation of HOP! It ensures that the airline’s commercial strategy is in line with the offer actually made to our customers, in line with their needs.
We have positioned Revenue Management within our Sales Department to ensure that we are close to the market: both customers and distributors. Business fares for our business customers during the week, offers tailored to our customers travelling at the weekend, promotions for our busiest flights or for more distant travel periods, etc… For us, Revenue Management is as much a segmentation and sales strategy tool as it is a revenue optimisation tool. It was therefore essential for us to have the support of a firm with expertise in these areas.
What's most important in Revenue Management: the Tool or the People?
As far as the RMS tool was concerned, one of our fundamental expectations was that it should not be a ‘black box’, with outputs that are difficult to understand and with limited steering levers. On the contrary, we wanted a tool that was easy to understand from a business point of view (although we didn’t want to get into the algorithmic side of things…), that could be configured as much as possible (customisation, alerts, specific rules for sub-networks…) by the end users (analysts, not just one or two technical experts).
The tool we chose corresponds perfectly to these specifications: as a result, there was a considerable mass of parameters to calibrate! N&C’s knowledge and expertise were invaluable during this parameterisation phase, in which we could have been swamped, and would have found it difficult, on our own as a business, to prioritise and rationalise our approach.
What advances in RM or Pricing have enabled you to « manufacture revenue » ?
The HOP model, which is still in its infancy, operates on the fairly simple but innovative principle of fare families: the main return on investment we were looking for was a tool that could manage demand for each of these fare families, and to work with N&C to customise the tool. A customisation of the tool that was consistent with the expectations of our customer segments, and that enabled us to propose an offer that met the needs of the market. It is on this basis of consistency with the market that we ‘manufacture revenue’. To this end, N&C provided us with effective support during the tool testing and calibration phase.
What major changes do you see in MR over the next 10 years?
Taking better account of « Customer Value » ! More than just optimising revenue, we need to take into account our customers’ expectations in terms of their travel needs – weekend, day return, flexible or restricted tickets, frequency of travel, etc. – so that we can tailor our sales proposals even more closely to their needs.
What do you expect from a consultancy to support a project?
To have the necessary distance to help us prioritise, identify the major issues, sequence the test timetables and industrialise the approach… when on our own, with our noses to the grindstone, we don’t know where to turn…
Having the ability, which we don’t have on the business side (because of lack of time!), to ‘get our hands dirty’ and get to the heart of the matter with the supplier: they challenge the algorithms and concepts, and dissect the typical cases that seem to be poorly managed…
This is where N&C’s added value has been most fruitful, identifying problems that we would not have seen, and devising workarounds that neither we nor the supplier had devised.
Working alongside the analysts, looking at situations with them where they are perplexed and don’t know how to tackle the issue: this role as a conduit for teaching the new methodology is invaluable, because this outside opinion has a great deal of credibility with the teams, and also looks at the management processes with fresh eyes, easing any tensions or irritants while ensuring the necessary harmonisation of practices and know-how within the teams.
Keywords: Emmanuel Queugnet, HOP!, N&C, Yield Management, Revenue Management, recommendations, RM expertise
