4 Communicate

As has been illustrated, revenue management requires organizational and analytical skills.

However, an additional skill to develop - especially as you scale - is how to effectively communicate revenue management to other stakeholders.

Simply put, your ability to offer concise, data-driven explanations in a timely and consistent fashion can create a lot of value (and, confidence!) for you and others. And, continuously investing in this practice will expand the scale of your portfolio and career opportunities.

In the last decade, revenue management has evolved from a niche analytics department to a leadership function that now often sits above (or alongside) marketing, sales, and other revenue functions.

In this seat, revenue managers act as a hub between multiple parties, ensuring revenue strategies are communicated and decisions are understood by teammates, owners and executives. Therefore, it might make sense why veteran revenue managers cheekily describe their field as, “geeks who speak”.

In this chapter, we will illustrate how to ladder up your organization, identification and intervention skills to support effective communication.

We get it. Despite starting with strategy, at least one aspect of scaled revenue management requires thousands of tactical decisions.

Around rates, these are often small changes - a rate increase for 20 properties for a particular date range, the decision to hold rates for 35 others, a decrease in min stays for a slow booking weekend, etc - that are made daily and (to the experienced RM) will feel like intuition.

Given the fast moving nature of your work - especially as you scale - it is essential that you develop the habit of documenting your work, process and thoughts, in order to have the foundation in place to communicate effectively & consistently.

In short, documentation enables you “past self” to set your "future self” up for success in all of your activities, and failure to document will leave you scrambling for explanations as soon as market - or a listing's performance - starts to slow.

Robust documentation is not just about the actions you took, it also includes inbound requests, owner/property information, timely follow-ups, as well as supporting context for how you were thinking - and what data you were looking at - when you made a critical decision.

While documentation may at first seem to be a nuisance, when done well it will serve as the foundation of all of the processes & systems you develop. In this light, you may well want to view documentation as the process of creating data that will inform the revenue machine you want to develop.

So, let's get to work on some initial documentation!

• On a daily basis, start to write out the outlines of questions, decisions, adjustments, predictions, and even "hunches" you have (e.g. I think lowering this rate is going to drive X amount of new bookings in the next 3 months")
• You should create a "running doc" that you keep open throughout the day, in order to quickly add notes, thoughts, and updates.
• Increasingly, teams leverage RM softwares that enable you to attach notes to specific listings, time periods, settings, and can automatically track changes you make to rates, restrictions, etc.
• Many of these notes may well flow in to your reporting or meetings (more on this below). Therefore you will want to (a) be able to gather these notes quickly, and (b) likely have at least one internal document with your own private notes that are not yet ready for sharing with owners or teammates.

• Tracking owners, teammates or execs requests is one of your most important activities (e.g. "Please set the minimum rate for our summer season to $250", "Please block these nights for the next 90 days, to see if friends want to use them.")
• These requests can include owner restrictions, rate change requests, data requests, guest restrictions, listing-specific fees, property details, and more.
• Make sure you have a process to quickly document requests, and get in the pattern of following up promptly to ask for more details or confirm you have made the update.
• Storing all these requests in a centralized place will be a critical aspect of any scaled or accelerated revenue management team.

• On a monthly or seasonal basis, you should take time to more deeply reflect on your notes, adjustments, strategies, and outcomes.
• Taking a step back to analyze why decisions were made - and which strategies succeeded -will allow you to refine your ongoing strategies
• Also, taking time for this longer stepback/analysis will help you navigate future decisions more effectively, particularly as they relate to year-over-year trends

What?! This guide is going to talk to me about reminders?!

Well, remember how great documentation is about your past self setting your current/future self up for success? Quickly and effectively creating "alerts/reminders" is often a critical aspect of accelerating your process and making sure you - or your team - can stay on point.

So yes, we're going to take a minute to discuss setting reminders both for (a) owner and teammate requests, as well as (b) changes/adjustments you made to a strategy.

• For custom rate or minimum stay requests from Owners you'll want to set a reminder to check back in on a later date to ensure those dates have sold or that the requests are still reasonable given the dates they're set on and how far away they are. Sometimes you can have your owner facing team negotiate these expiration dates (Wheelhouse enables expiring custom rates) from the get go!

• For strategic changes, you will want to have a clear time to check back on your adjustment, to figure out (and document and/or communicate!) the impact of your change.
• Observing how changes affect results allows Revenue Managers to further optimize on decisions which work and backtrack on decisions which fail to materialize or cause sales to stall.
• If possible, the RM should set these reminders in their RM platform, however calendar reminders are an effective approach, as well.

With effective documentation underway, you now have a solid foundation for your own work.

Therefore, lets discuss how to communicate internally with teammates, who will want to or need to know about the performance of the portfolio.

Effective reporting will both accelerate and stabilize your team, both in high and low demand times, providing you the ability to focus on the critical business decisions you need to make daily.

Therefore, let illustrate some of the reports you can (okay, should!) create and share with teammates, in order to streamline your revenue operation:

• Primary Goal: Report performance to the executive team (and potentially entire company) at a high level so they can quickly understand the financial performance and trend of the company.
• Audience: Executive or Leadership team. Sometimes this report is available to the entire company.

At a minimum, a weekly report detailing revenue (and likely, occupancy) performance should be created, edited to certainty, and proactively shared with your team/execs.

Often this report will display data at the monthly level, and may include the Year-to-Date performance figure, pacing, as well as how your current performance compares to historical KPIs, your budget, or your competitors.

• Primary Goal: Provide snapshot of current sales situation and provide context for decision making of Revenue Team. 
• Audience: Director of Revenue, Revenue Team. Sometimes leadership team if the leadership teams prefers more detail in their revenue reporting.

Remember your pick-up & pacing work? Now it's time to start leveraging that information to clarify how the portfolio is selling now, and what interventions you recommend taking. Ideally, this report can highlight any segment of properties, showing revenue and occupancy "on the books" (OTB).

Reports that feature these charts - paired with notes regarding pricing actions or qualitative descriptions of what is happening and what decisions are being made - can be the foundation for a highly aligned next few weeks of work & monitoring.

• Primary Goal: Describe market trends &. conditions, supported by simplified data which clearly shows these trends. Briefly describe the biggest tactical approaches the Revenue Management team plans to take based on these trends.
• Audience: Owner Facing Teams, Leadership Teams

On a quarterly basis, proactive revenue managers will provide a report that offers more details about portfolio performance vs. CompSet and Market trends.

Ideally, this report will include at least one external data source to substantiate your analysis.

The data provided here should then be summarized by you/the revenue team, detailing how you interprets these conditions and trends, how they are likely to impact the business, and what your primary tactical approaches they will be, based on this assessment.

Below is an image of the Adjusted RevPAR performance for the Seattle market by month and by year. Multiple metrics are ideal to send to the team for better context so including an Occupancy and Average Daily Rate report would be useful in addition to RevPAR.

Similar to weekly reporting, effective revenue meetings - that give teammates a chance to coordinate, and stakeholders a chance to ask questions - are the hallmark of an effective, scalable revenue team.

Both a report and a meeting can be used to disseminate information however a meeting can uniquely be utilized to problem solve issues or coordinate between teams. Again, understanding the audience the the purpose of the meeting is paramount to its success.

Examples of meetings and their audience:

• Primary Goal: Coordinate tactically among revenue stakeholders
• Audience: Revenue Management team, Sometimes the Marketing, Sales and Distribution team members

Ideally this meeting is not for reporting as that information is already in the reports sent out. Rather this meeting is an opportunity for Revenue Management stakeholders to discuss tactics.

This may mean coordinating marketing campaigns with revenue trends, Revenue Management working with distribution to optimize listings that are underperforming or Revenue Managers discussing with each other how to react to trends visible in the data or sharing ideas on how to optimize revenue.

This meeting aligns well with the “Weekly pacing or Pick-up” report.

• Primary Goal: Report on revenue management initiatives, performance, and high level trends in order to coordinate & calibrate your revenue strategy
• Audience: Leadership Team

Revenue strategy meetings are utilized to disseminate information on revenue performance to other teams. Generally this is an inefficient use of time if many people are involved when a report could more easily provide this information.

However, when the Revenue Reporting meeting remains high level and the time is utilized to troubleshoot or collaborate on strategy or concerns/opportunities around trends then this time can be utilized effectively.

This is a fine line to walk. It is easy for teams to allow this meeting to be a report where the Revenue Management team reports on the key KPI's for each individual market or listing segment. Rather Revenue management teams should utilize this time to present their analysis of trends and set an agenda specifically around building consensus on the strategy to approach potential situations. Data reporting should be left high level with data on more specific segments pulled up to support an analysis or claim by the Revenue team about what they are expecting or requesting consensus on. Reporting on segment performance can be deferred to a meeting or followed up on after the meeting.

An example would be that the Revenue Management team has become aware that international travel is down and expected to go down further for a given market. Originally the strategy was to maintain occupancy but drive ADR higher as the team was expecting strong demand. Now questioning that demand potential the team outlines the situation [and data in evidence] to the executive team asking them if they would still like to:

a) Pursue and ADR growth strategy [higher risk] by holding rate later in the window,

b) Switch to an Occupancy based strategy to mitigate risk while limiting the rate drops to a percentage agreed upon by the team,

c) Move marketing dollars to try and generate demand from other segments to make up the shortfall,

d) Discuss other ideas amongst the team.

The Revenue team is able to use this time to be both collaborative with other stakeholders in the organization while ensuring team members are informed of what could happen, on the same page about the general approach taken in response and aware of the ramifications of that approach.

Owner communication is the lifebood of successful property management.

We all know owners can be... opinionated! However, we need to remember that the properties we manage are both a family home and an investment/asset, rolled in to one. That is quite the recipe for strong emotions!

And, revenue performance - along with property & guest care, maintenance, etc - is one of the primary drivers of owner satisfaction and owner retention.

Today, most teams are increasing their investment in making sure their owners feel informed about the approach your are taking - and the data / software / strategy you are leveraging - to create the most value from their property.

Especially in the VR space, where one owner churning can sway many others to make a similar move, it is paramount that revenue management supports the efforts of your team to ensure owners feel informed and aligned with your approach.

Therefore, let's discuss some of the approaches you can take to drive better owner engagement and communication.

The more seamlessly you tailor your approach to suit the owner's unique preferences and priorities, the more easy it will be to get your message through. It starts with the basics - knowing whether they prefer detailed email updates, texts, phone calls, or even... occasional in-person meetings. It should go without saying, you will want to document what you learn about each owner!

A major aspect of effective communication is making sure you are speaking in the owner's language.

There are two approaches that we've seen be highly effective in communicating with owners.

• Start Simple: Work on providing a timely, simple report to owners including their revenue and occupancy for that past month/quarter, revenue pacing for the next 3-6 months, and potentially details about year-over-year performance, or performance relative to a few similar properties. If you take this approach, expect that this report will be sufficient for 75% of owners. For the 25% who want more info, you should have a template in place to share more details - with more being defined as "enough details (well presented) to keep the owner happy, and perhaps save you a meeting!"
• Start Complex: Perhaps surprisingly, we have talked to teams that pride themselves on sending very detailed owner reports. Why? They have found that for certain owners, it helps those owners realize what we all know... "revenue management is a complex skill!". However, if you always start with this approach, you might find some owners who say, "can you tell me what this all means?!" Given the nod to personalization above, it is a best practice to develop at least 2 owners reports - a basic & complex - and be ready to send out either of them in a timely fashion, depending on each owners aptitude with - or appetite for - data.

And, as we all know, some owners solely focus on maximizing revenue, while others prioritize consistent income or preserving availability for personal use. Make sure you pressure test either one of these approaches in a kind fashion, and remember that preferences change!

For example, it is not uncommon for owners to block few weekends early in the year as potential times they want to use their home. As the year unfolds, life and travel plans can shift, so you would be wise to check-in on all blocked nights that fall into high season, gently asking if those nights should be opened up for sale if they are no longer likely to be used.

While some owners will look to your team to have all the answers, most owners would welcome the chance to provide feedback, especially about their upcoming pricing strategy around high season, holidays, or important time periods.

Therefore, consider building into your practice a way to at least lightly involve them in conversations such as:

• What are the 3 most important weekends/weeks you want us to be especially diligent about?
• Do you have any specific requests about how you us to price & list those dates (e.g. min prices, min rates), or do you want us to watch the market closely and aim to optimize that for you?
• If you do have specific rate recommendations and your property has not booked near the end of the major booking window, do you want us to hold your rates, or adjust your strategy proactively?

Sure, this might seem scary. However, this type of communication (with your own tone and questions!) is going to greatly impress most owners, and give you ample evidence of your efforts to drive revenue, results and alignment should a market downturn occur.

In addition to driving revenue and owner retention from your current portfolio, revenue management can - and should - be a driver of your portfolio expansion.

The materials you analyze and create to report on your own portfolio's performance often already includes the analysis of other listings, compsets, markets and more.

This information can serves as both the (a) data layer you need to provide a Pro Forma to an owner, and the (b) knowledge around what types of properties and locations are in high demand in an area, thereby focusing your outreach.

By sitting so closely to market data, you will be in a seat for when - and how - to target new owners, in order to drive your portfolio expansion.

For example, for a currently managed property in your market, you can provide specific examples of how your properties performed during high season, low season, or for a major event. This financial literacy will greatly appeal to owners who are sensitive about the revenue performance of their properties.

While every property manager can promise the moon in terms of revenue creation, grounded, rational, data backed insights as to how a property could perform - and how it should be priced/setup to drive performance, will often win the day.

Additionally, illustrating that you can effectively use data & pricing softwares to protect and amplify the performance of a property can be a major determinant of whether you win the owners trust & business.

With your reporting examples already developed, you would make an ideal candidate to join any sales call, to help convince a skeptical owner as to the value of working with your team. Again, a decade ago an revenue manager engaging in outbound sales was almost unheard of. Now, you can add a lot of value - and drive exceptional growth in your portfolio - if you develop the skills to join a sales call and confidently express opportunities for revenue that you see in their property.

And, as part your modeling and sales pitch

[ ADD ]

And, remember all those notes you took about "hunches"? Now is a great time to share some stories about the successes you and your team had when you moved before the rest of the market!

Owner teams need to be able to explain to owners why listings are priced the way they are or what to expect performance wise while business development teams need to be able to describe the organization’s strategy to improve their owner’s yields. An example of types of communication or reporting for these specific purposes can be seen below:

[ ADD ]

As discussed above, you may well to have 2+ owner reports that you can easily generate and share with owners.

[ ADD WHEELHOUSE MATERIALS ]

[ REFINE ]

Throughout a booking season, a revenue manager may make countless individual tweaks and changes when optimizing sales. It is impossible to describe all of these changes and actions and even if one could, no one would read them.

Rather, it is the responsibility of the revenue manager to synthesize what they are doing into describable tactics (activities) and link them together into an overarching strategy (when and how tactics are utilized) that can be communicated easily and justified convincingly. 

For example, a Revenue Manager may look at the market trends and determine that the booking window is shortening and that their own pacing is lagging behind both the market and their own historical. The tactic they utilize is they may decide to discount the rate. The strategy they are determining that the Last Minute Discount schedule is going to be enacted earlier by 2 weeks and that they will discount deeper and faster. The justification for that strategy being they interpret the data to show conditions in the market are worsening and their own position is worse then it was last year so they think the best way to optimize revenue would be to sell more earlier even if it is at a lower rate. 

Many Revenue managers have a firm grasp of the tactical approaches they utilize when doing their revenue management practice. Often Revenue managers also have an overarching strategy in mind which they adjust as they ingest data. The ability to take that intuitive understanding of when to deploy different tactical approaches to changing market conditions and communicate that clearly and concisely is integral to scaling a revenue management function both giving space, freedom and trust to the revenue manager while enabling non-revenue team members to engage collaboratively with the companies revenue performance.

In this case the following process is suggested:

Effective communication is complicated and seemingly never-perfect art.

Therefore, the approaches described above are just the foundation of approaches, materials, and meetings that we've seen create a healthy environment for the deep discussion of revenue management strategy.

As you develop these foundational materials and structures for your revenue management team, you will gain the ability to keep your team aware of the whole lifecycle of your portfolio performance - where you've been, where you are now, where you are likely heading, and what you will do if things change.

When done well, you will quickly earn the trust & confidence of your teammates & owners, earning you the space to execute effectively without - okay, with less - second guessing.

Course Page

1 Foundation

2 Identify

Back to 3 - Intervene

Next to 5 - Processes