Applying yield management pricing to your service business

Yield management pricing is a broad term that describes how a service provider can secure higher revenues from its relatively fixed capacity. There are several major advantages associated with the use of yield management pricing. Through use of yield management, a firm can better compete against a low-cost provider. Yield management pricing is an effective mechanism to allocate a service provider's relatively fixed capacity, and is also a more efficient alternative to providing discounts on a much broader scale. This article discusses how a service provider can develop and maintain a yield management system through completion of eight interrelated steps.