Should Sales Teams Receive Revenue Management Training?

“The benefits of cross-training between Sales and RM can be significant to top-line performance when that knowledge is applied to decision making. One of the biggest roadblocks to performance is often when there is a misalignment in strategy between these departments where negotiated rates step on the toes of transient strategy.

While a foundational understanding of revenue management is important for a DOS, I wouldn’t go so far as to say that they need to become full-fledged RMs. Let’s face it, sales professionals and Revenue Managers are not naturally cut from the same cloth. Social skills that are paramount for a DOS are not always prevalent among Revenue Managers who tend to lean more towards the analytical skillsets. These inherent differences are great because we all know that it takes a village.”

“In my view, Directors of Sales must have at least a superficial understanding of revenue management strategies and tactics. This supports a data-driven customer acquisition strategy as opposed to a random approach. Having them on board for forward-looking commercial strategies provides them with the understanding about target groups which need to be prioritised in their acquisition strategy. I.e., if a strategy is geared around gaining occupancy on weekends it would be less target-oriented to put all resources into the acquisition of corporate business.

Additionally, it enhances their ability to identify revenue opportunities and mitigate risks leading to improved results and a more competitive position in the market.”

“Without a doubt, Sales Directors must know about revenue management, as Revenue Management is becoming increasingly important over time. A sales strategy without a revenue perspective is undoubtedly a potential loss of production. Many revenue teams rely on commercial direction, so it is essential to have a good understanding of revenue management, especially for the commercial director, to be able to generate a cross-cutting strategy between Marketing, Sales, and Revenue.”

“A Director of Sales needs an understanding of basic Revenue Management principles but does not require in-depth knowledge. They must be aware of the company’s RM strategy and understand its logic. Ideally, they should be involved while defining the strategy. Why is this necessary? It’s a matter of efficiency and prevents frustration. Understanding the basic principles and the strategy allows them to identify which business is worth pursuing and which is not. They can then allocate their resources properly and make decisions swiftly. By avoiding the pursuit of undesirable business, the sales team will not face frustration from RM rejections. Furthermore, they can communicate clearly and promptly with clients about what is needed to close the deal. This reduces the need for excessive back-and-forth emails (both internally and externally), leading to more profitable business and higher client satisfaction. A close collaboration between both departments is needed to excel.”

“Yes, absolutely, at least some of the skills! Displacement analysis should be part of every Sales team member’s training. A sales person is charged with soliciting business for a hotel that benefits the hotel. Take the example where a moderate to low room rate group would like to book during your high season, or busy days of the week. That would be a bad revenue decision for the hotel. The group might be agreeable to move to other days of the week or other dates which are in a lower demand, and so they are not displacing revenue.

But displacement analysis has many other factors beyond revenue, costs, F&B spend, recreation spend, meeting room rental, impact on neighbouring days, etc. If a sales manager is not skilled in displacement analysis and other related revenue management topics, they will make decisions that impact all of the hotel revenue. Good decisions require some training.”

“It’s a must that sales teams are trained in revenue management! And the same should happen to marketing people. The convergence in the commercial space is pivotal for any success and a solid, robust data-driven strategy should align everyone. The more understanding of data and synergy between revenue-generating departments the better. 

Salespeople in particular should understand the value of LRA vs NLRA rates, impact (displacement) by high volume, low-rated corporate accounts, rates and availability, dynamic vs static rates in the B2B world and how all these rates are managed by revenue management systems. However, on top of all this, you will need a leader (GM / CCO / DOSM) who will need to align KPIs!”

“Revenue Management is a team sport and everyone needs to know the rules of the game. It is not about being the one doing it, but being able to participate. The same goes for Revenue Managers though: Learn Sales, Learn Marketing!”

“I definitely agree with Directors of Sales having some training in revenue management. This helps in understanding the budgeting and forecasting as well as strategic levels of business. It’s not just about selling. It’s about selling at the right rate to the right clientele which is an important part of the business. This will not only help in building a healthy relationship between Sales and Revenue, but also help teams to understand the derivatives and complexities involved in getting right results from a revenue management perspective.

Sales teams need access to the bigger picture of business. DOSMs can get frustrated when they don’t have easy access to historical trends and/or other data to help them quickly determine the best rate to quote. Additionally, when they can’t easily understand how their decisions impact a hotel’s performance, they’re sometimes quick to make decisions that are less than optimal for overall revenue and profit. Training in revenue management will help them tackle the above issues easily and work together with revenue management teams to get the required results.”

“Not only should they be trained in Revenue Management, but in my opinion, Revenue Managers should be the next Directors of Sales! 

Very often, Directors of Sales have focused solely on selling, without checking the cost of those sales, and therefore, the net revenue, and in consequence, the profit. This is something revenue managers have on top of their minds. 

I see both roles blending, as Revenue Managers are gaining more knowledge in the Sales area, and Sales Managers are getting a better understanding of having a healthy distribution mix.”

“Sales managers, as integral members of the commercial team, ought to explore Revenue Management for enhanced proficiency in assessing lucrative versus less lucrative contracts. This endeavour not only fosters a deeper understanding of property dynamics and requirements but also lays a robust groundwork for refining sales strategies, thereby stimulating business growth during low-demand periods. While a 2000-room night contract might seem substantial, its allure diminishes when it mandates a 20% discount, especially considering that the majority of these room nights coincide with periods of non-discounted sales.”

“The answer to this question is very simple: the products we sell (Hotel rooms) are not items that have (always) the same value and price. Also, we do not sell just hotel rooms, but we aim to maximise the revenue and profits of the whole asset (the hotel). It is not conceivable to me that a director of sales would not have a basic knowledge of revenue management, because that would mean that her/his sole scope would be to fill the hotel, no matter what. I would not expect the Director of Sales to be a pro in all revenue management aspects, but the basics cannot be neglected: we have been talking for years about the evolution towards the commercial strategy. 

This is not the future, this has already been happening and the commercial functions inside the hotel that do not share knowledge and insights (Revenue, Sales, Marketing, Digital) are just doomed to fail. The training is natural because it should be part of the day-to-day job to share knowledge and engage with the different departments/stakeholders.”

“All senior managers should have a basic understanding of revenue management. The revenue manager is responsible for ensuring that all staff within the hotel responsible for driving profit understand the core principles behind what they are aiming to achieve ie: profit. 

The General Manager of the hotel is responsible for ensuring that all KPIs in the hotel target the same results and work in tandem together.  

Once your senior management team understands the philosophy and plan behind the pricing and distribution strategies in place, then they can all work together to make it happen.  

A sales manager does not need to understand the finer details, but they need a clear understanding of the budget, where the market segments they look after sit, how they will influence the end results, and how the decisions they make each day affect forecast or budget.  

With that understanding, the sales manager can then ensure that rate negotiations focus on profit and not just occupancy, and that business won is achieving the best results and not just filling a hotel. They can pick and choose what business they accept with confidence knowing that it will meet their KPIs and exceed the hotel’s profit forecast.”

“Yes, I highly recommend training for the Director of Sales to help them understand the balance between the value of the client vs. the real value (EUR) for the hotel. Sales & Revenue together should determine the strategy for the hotel, Revenue should be aware of the type of clients that are available in the market and Sales should be aware of the patterns / best mix for the hotel. That only works if they have at least a basic understanding of Revenue Management and what it is evaluating constantly. “

“Director of Sales must know the basics of revenue management and work closely with the Director of Revenue Management. There are two main segments: group and transient. Only by finding a profitable balance between these segments can hotels maximise results. It’s crucial to avoid working in silos when DOS only focuses on groups and DORM focuses on transients only. There should be an understanding that total revenue and profit maximisation is the ultimate goal. That being said, DOS should have basic knowledge and understanding of the following:
– How to read the STR report
– How to calculate the group rate
– How to perform the displacement analysis
– How to read BI reports (past and forward-looking)
– Basic revenue management terms: pace, pickup, demand, booking window, etc.
– How groups and transients affect other departments’ revenue
– How to revenue manage meeting spaces”

“Absolutely, the Director of Sales plays a pivotal role in driving sales across diverse markets. It’s imperative for them to grasp the intricacies of various strategies, comprehend their effects, and appreciate the rationale behind their implementation. Whether focusing on sales targets or revenue generation, the overarching objective remains consistent. While a Director of Sales may not necessarily require extensive training in revenue management, they undoubtedly benefit from a profound comprehension of its principles. This understanding enables them to align sales initiatives with broader revenue strategies effectively.”

“Absolutely! It is imperative that Directors of Sales possess a comprehensive understanding of revenue management, and vice versa. The delineation between these roles should be minimal, if at all present. This holistic approach fosters collaboration and synergy between departments, ultimately enhancing organizational effectiveness.

Directors, Managers, and personnel at all levels within these realms should be equipped with a nuanced comprehension of both sales and revenue management. This integrated knowledge base dismantles silos, facilitating cohesive strategies and maximizing value creation.

The optimal trajectory for aspiring Directors involves concurrent immersion in sales and revenue management. Companies should prioritize this dual-track development in their learning and development frameworks.

Drawing from personal experience, I attest to the profound benefits of cross-functional collaboration. In my tenure in revenue management, close collaboration with the sales team yielded invaluable insights. Shared forums, such as Weekly Business Reviews, and ongoing dialogue fostered mutual understanding and strategic alignment.

A Director of Sales must grasp intricate revenue strategies to effectively drive business outcomes. Conversely, a Revenue Director should empathize with the Sales Director’s perspective, recognizing the significance of client relationships beyond numerical data. Achieving equilibrium between these perspectives is pivotal.

In essence, harmonizing sales and revenue management is paramount. Directors must synthesize diverse viewpoints to devise robust strategies and propel organizational success.”