Customer-value-based revenue management

Abstract

This article presents a research approach to revenue management based on customer value. Through an integration of transaction-focused capacity control and customer relationship management, customer-value-based revenue management aims at both utilising capacity efficiently and establishing profitable customer relationships. Therefore, customer value is considered when controlling the availability or price of booking classes. The strategic, tactical, and operational activities of customer-value-based revenue management are examined. Simulation studies are used to illustrate the benefits of the approach, compared to transaction-based revenue management. Finally, some concluding remarks are made and the outlook for future research is considered.