Revenue Management

CHAPTER 6

Customer Reactions to Revenue Management Techniques

Revenue management often involves variations in selling prices among customers or over time. The reaction of customers to these price variations may affect their future behavior. The research outlined in this chapter has shown that behavioral considerations, such as customers’ perception of fairness and trust in their supplier, are of critical importance in developing long-term, profitable customers and optimal revenue management strategies. Customers who are satisfied with the current offered price, for example, are more likely to complete the transaction and are likely to consider dealing with the same seller in the future. Customers who are not satisfied with the current offered ...