This is the first of a 2-part series. We're looking at how good collaboration between marketing and revenue management is vital for airlines to maximize success.
- (1) 3 Mistakes Your Marketing and Revenue Management Teams Are Making
- (2) 7 Ways to Bring Marketing and Revenue Management Together
Marketing and revenue management teams are both critical to an airline's success. Both teams have the same end goal: to drive revenue for the airline. But the differences between the two can often lead to difficulties with working together.
Here are 3 mistakes marketing and revenue management make when it comes to collaboration.
1. Working in Their Own Silos
This is the biggest mistake that marketing and RM teams can make. PWC’s 2015 Global Operations Survey found that 55% of companies work in silos, with each department making its own decisions on the most important capabilities. It’s usually justified as more productive because teams can stay focused within their own groups, especially if specific technical skills are required for a team.
But this lack of shared insights can lead to what’s called the “silo mentality” – a mindset where departments are inward-looking and hold back from giving information to others in the same company. Then if something goes wrong, it’s easier to point the finger at another team due to the lack of unity.
Without working together, there’s no chance to leverage the expertise of others. For example, RM might miss out on more accurate forecasting because they don’t have marketing’s insights about the search behaviour of potential passengers. Marketing might waste their budget promoting flights that are already close to selling out.
The battle for information can eventually grow into a turf war, with teams becoming protective of their insights without realizing that their refusal to help is holding the company back. This attitude can really break down company culture and affect the airline's bottom line.
2. Not Sharing Information Effectively
Even if RM and marketing teams break beyond their silos to share information with each other, there’s a right and a wrong way to do it. When it’s done poorly, the context gets lost, important updates are missed and it becomes hard to track decisions.
One issue is where data is kept. RM typically has to get data from many different systems in order to make a single decision. Meanwhile, marketing might not even be able to access key information until RM reports are shared. In the meantime, they’re also collecting data from various places. This reliance on multiple data sources and systems creates inefficiency.
Issues also grow when email is the main form of communication. You’ll become the victim of never-ending "reply all" email chains that quickly lose relevance to you, large attachments that can’t be downloaded and countless versions of the same important spreadsheet. And let’s not forget misinterpreting the tone of voice when you’re reading words and exclamation! points! from a screen!
Good practice comes in the form of transparency and regular contact. Scheduled catch-ups are a good start, but RM and marketing teams who only have meetings once a week will struggle to get timely information. In the fast-paced business of airlines, sharing Excel files or waiting until the next meeting isn’t enough.
3. Not Working Towards the Same Objectives
Airlines have a common goal – to make money and stay profitable. But beyond that, RM and marketing have their own specific goals. And unfortunately, these goals may not necessarily complement each other.
If RM and marketing are motivated to reach different objectives, they may ignore the needs of the other team at the company’s expense. Marketing might focus on growing website traffic and conversions by promoting popular routes. This may directly conflict with RM, who need marketing to focus efforts on flights that need an extra boost to reach their load factor targets.
Misaligned goals and objectives can cause RM and marketing to move in different directions. It can also mean using different calculations to measure the same metrics, which creates confusion and errors. Not only does this misalignment affect employee morale, it can also hurt the airline’s profits.
It starts from the top. If management doesn’t lead by example, there won’t be a common and unified vision across the departments. Organizational goals are needed to give direction, motivate employees and help evaluate performance. But without common overarching goals, teams lose sight of the bigger picture and act in their own best interests.
Do you recognize any of these mistakes within your own teams? If the answer is yes, the important thing to know is that you can bridge the gap between marketing and revenue management. In our follow-up article we look at 7 different ways to bring marketing and revenue teams closer together.