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CRM Unplugged Chapter 5

CHAPTER 5 Demand Visibility and Response Demand Visibility Best Practices for Increased Visibility Responding to Market Demand Best Practices for Demand Responsiveness Science of Revenue Management Power of Pricing | CHAPTER 5 Demand Visibility and Response Demand Visibility 121 Best Practices for Increased Visibility 123 Responding to Market Demand 125 Best Practices for Demand Responsiveness 128 Science of Revenue Management 131 Power of Pricing 132 Key Points 133 Most companies are poor forecasters of demand levels and patterns. As a result they limit long-term profitability by hampering their ability to innovate and capture new business and also dampen short-term profits by failing to detect and respond effectively to current levels and types of demand. In Chapter 4 we discussed the customer insight processes that help firms deepen their understanding of customers detect emerging marketplace needs and carve out long-term profit growth. In this chapter we look beyond customer insight and at the wider demand picture. We focus on demand forecasting and response processes that are critical to detecting and responding to current demand levels. Unfortunately most managers adopt defective forecasting methods or simply believe that effective forecasting is too complex due to the highly dynamic nature of the market. That misconception leads to unsound assumptions regarding future demand levels limited consensus on where the market is going and lack of coordination across the firm in response to the marketplace. Companies then have inadequate ability to respond to areas of weak demand or capitalize on strong demand leading to difficulty in correctly projecting and optimizing revenue and earnings levels for the organization as a whole.1 .