Don’t be duped: 6 sales techniques that RM executives need to be wary of

Tom Bacon would never dismiss the value of RM systems but argues that sometimes airlines are talked into overbuying

Business always gets a bad rap in movies. Wolf of Wall Street is a typical example of a movie that portrays businessmen as unethical hucksters; the main character made a fortune by selling questionable investments to gullible investors.  As a person who has made his career in business, I resist this – but also acknowledge that sometimes sales’ promises are a bit inflated.

Of course, no one would accuse our scientific, analytical RM system providers of being ‘hucksters’. RM systems can add tremendous value and, in fact, are now regarded as essential for a successful airline. However, some airlines end up ‘over buying’, paying for more features and functionality than they should. Often these airlines are persuaded by some of the same sales techniques that convinced the ‘Wolf’s’ clients.  Let’s review what might appear perhaps a bit too persuasive:

1.  Too good to be true 

Sometimes it sounds too easy – install a system and revenue improves by 5%.  How can you refuse such an offer? But actually RM is much more than a system; in addition to the system, airlines need a proper organisation, highly trained analysts, and proper procedures for customisation and ongoing maintenance. The system is a tool and of no benefit if not used properly by an appropriate, expert organisation with the right processes. This caveat, probably, is even more applicable for sophisticated add-on modules.

2. Hype

‘Enhanced’. ‘New Improved’. ‘Now includes XYZ’. ‘99% Forecast Accuracy’. RM Systems continue to evolve – which is terrific. However, many so-called ‘enhancements’ either don’t apply equally well to all airlines or come with additional complexity that may be difficult to manage. ‘Enhancements’ can be somewhat academic exercises rather than truly practical applications. Many real world RM departments are not well positioned to take advantage of some of the more sophisticated enhancements. Also, by definition, the enhancements do not have a long track record of success. In general, a tried and tested system – across a variety of airlines in a variety of situations - is more valuable than ‘the latest and greatest’.

3.  Testimonials

‘One airline gained 6.2% within six months’. Fine. The sample of one (or even 10) is not really persuasive. Is their competitive situation really similar? What about the airlines who were disappointed or who needed multiple iterations to achieve their goals?

4.  Jargon 

‘Optimised allocations’, ‘sell-up’, ‘nesting’, ‘priceable/yieldable’, ‘buckets’. RM systems have developed their own language to explain the steps in forecasting and optimisation. Your RM department must fully understand the features in order to properly manage the system.  Used inappropriately, technical language can sometimes obfuscate necessary communication among RM analysts or between RM and other departments.

5.  Fine print 

With respect to RM systems, fine print applies to the black box nature of many systems or modules. This is truly very ‘fine print’ since it is not at all transparent to many airline purchasers. RM suppliers are challenged to make their highly sophisticated, highly statistically based, often highly complicated and unintuitive systems easy for airline analysts to use. The end result, sometimes, is systems that are not at all transparent.

6.  Looking through the rear view mirror

The RM systems have certainly added considerable value, accounting for literally billions of dollars of incremental profitability. However, these strong track records may not be an indication of accuracy in the future. Many systems, for example, have not yet adjusted to the new world of ancillary fees, branded fares, personalised offers, flash sales, and website merchandising.

Buy for your own unique needs

I am a huge advocate of RM systems and I recognise that they represent a critical success factor for most airlines. However, some airlines have ‘over-bought’, installing modules or components that are not actually adding value to their companies given their unique competitive situations or their organisational ability to appropriately customise, adjust and maintain such modules. Rather than all airlines needing ‘the latest and greatest’, we each need a system that meets our particular competitive needs and that can be applied smoothly within our particular organization.

Tom Bacon is 25-year airline veteran and industry consultant in revenue optimisation. 

Questions? Email Tom at or visit his website

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