Revenue Management

What are the common methods for managing revenue?

  • fast quote
  • updated quote
  • remove unabsorbed costs

  • What is the most important unabsorbed costs?

    idle space

    Is restraint of trade by employee or creditor an effective way for revenue management?


    Is substanability imporant for revenue management


    What should be covered by revenue management, new product, new routing, new customer?

    all should be covered?

    Is acquisition a kind of revenue management?

    Acquisition can increase revenue

    Is billing accuracy a kind of revenue management

    Billing accuracy can avoid omission of billing and underbilling

    Is omission of billing a common target area of revenue management?

    It is one of easy way to manage revenue.

    What are the business analysis for lost revenue?

  • lost routing
  • lost customer
  • lost product due to license
  • lost business due to competition
  • lost business due to lack of license, labor, space, cashflow, service quality

  • What are competition?

  • competitor, change in routing(location), change in means of transportation, change in ownership of customer, change in sourcing policy by customers
  • If you know your competitors. You can well protect your revenue.

  • What are critical points for revenue management?

  • Avoid loss of business/Identify competitor alliance/identify lower competitor price by Source Of Change report and variance report
  • Avoid loss of critical marketing information by setting up confidential information policy
  • Attend each bidding
  • Maintain the business by satisfactory service by reporting claims & compensation as contingent liability, dispute on debts relating to complaint on service as provision for bad debt, credit note based on accrual concept
  • Existing customers and Target growth customers and by region by product by industry by P & L owner, monitored & controlled by budget and forecast
  • New service/prodcut development by P & L owner, monitored & controlled by budget
  • Auto-renewal in contract
  • Contract management (renewal and restraint of trade by vendor and employee)
  • Monitoring pricing strategy

  • What are necessary information for revenue management?

  • Top Ten movement, revenue and margin
  • New routing
  • New service
  • New customer
  • New industry
  • New product transported
  • SOC, acquisition, expansion, contraction
  • Monopoly routing, main routing
  • Customer concentration
  • Customer penetration rate
  • Customer management
  • Industry concentration
  • Service concentration
  • Transported Product concentration
  • Routing concentration
  • Coming opportunity, budget
  • Immediate opportunity, forecast

  • What should be considered for revenue management?

  • Auditing on orders, missed, rejected, backlog, ,overflow, idle
  • Contract expiry, renewal, customer and carrier (space management)
  • Restraint of trade, agent, employee, vendor
  • Reporting loss making and lost customer, inactive customers exceptional margin with proper cost allocation of direct and indirect costs
  • Top Ten, major customer movement
  • % of customer total logistics business
  • Billing accuracy, omission & unabsorbed costs, fluctuating currency and unit of measurement
  • Pricing strategy taking into account volume discount idle capacity and share of overhead, additional income
  • Cashflow and on time payment to avoid stop run
  • Target customers, product, routing development in Forecasting, budgeting
  • Exceptional handling SOP to maintain reputation
  • Detect excessive costs which affect competitive pricing
  • Cost reduction and process improvement to support competitive pricing
  • Comprehensive competitor analysis including lost business to competitors
  • Create barrier to entry for strong routings and to improve weak routings by all means
  • Agency, partnership, MBO and merger and acquisition opportunity
  • Share of overhead
  • Reduce Idle

  • How to set up an accounting system to provide information for maintaining customer and business growth?

  • Top ten routings with biggest volume of discount and highest service frequency to attract new customers
  • Top hundred kg and dimension shipment by customer by routing with greatest opportunity of consolidation
  • Lowest ten routings which has highest chance of being taken over by competitor
  • The top ten specific product transported which we have greatest chance of direct flight and non-stop truck to save operating cost per kg per km

  • How to use different pricing models for new customers?

  • Cost plus pricing for new market/ service which involves additional risk
  • Breakeven pricing or penetrating price for breaking into market (rely on cost leadership)
  • Activity Base Costing to remove all unnecessary cost to customers (have set up ABC cost model )
  • Life time cost and total ownership of costs in quoting to avoid unabsorbed costs by customers

  • What are competitors of trucking?

  • Shipping company
  • Freight forwarder
  • outsourcing
  • Rail operator
  • Other Competitors