SAS to build a new profit optimisation solution

SAS has formed a new Profit Optimization Global Practice. The division will apply revenue management (RM) techniques to help companies optimise profitability, using advanced analytics to scientifically and proactively determine the most profitable market segments and prices.

Published: 05 Aug 2008

SAS has formed a new Profit Optimization Global Practice. The division will apply revenue management (RM) techniques to help companies optimise profitability, using advanced analytics to scientifically and proactively determine the most profitable market segments and prices.

To achieve this goal, SAS will build a new profit optimisation solution that will integrate RM, customer relationship management, pricing and distribution.

Barry Smith, consultant and former Chief Scientist for Sabre Holdings and Senior Vice President at American Airlines believes the new SAS unit is on the leading edge of technology that first followed US airline deregulation, spread to other segments of the travel and hospitality industry, and is now poised for adoption by many other industries.

"You might call it seller's remorse when you realise you could have priced something you sold higher – perhaps much higher," said Smith. "Revenue management ensures maximum profitability at the time of sale by factoring in future demand and revenue potential. These techniques, most valuable in periods of high demand, are becoming equally important in low-demand periods by directing marketing initiatives to fill gaps."

The SAS Profit Optimization Global Practice includes RM experts from various industries. Senior team member and leader Steve Pinchuk formerly served as Corporate Vice President of Revenue Management and Distribution at Harrah's, where he worked to integrate Harrah's first RM systems and practices with their customer relationship programmes.

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