Revenue management is supposed to be all about logic, data, and cold, hard numbers. But let’s be real—sometimes, human brains get in the way. And when biases take the wheel, you get revenue decisions so bad they’re almost impressive. Here are five facepalm-worthy moments where cognitive biases made a mess of revenue strategy.
1. The “It worked last year” Bias (Status Quo Bias)
Status quo bias—the belief that what worked before will work again, even when the world has moved on.
Lesson: Just because something was a good idea doesn’t mean it still is. The market evolves—your pricing should too.
2. The “But we’re better” Bias (Overconfidence Bias)
Overconfidence bias—believing you’re so good that customers will come no matter what.
Lesson: There is a fine line between confidence and arrogance. Don’t tippy-toe over the line.
3. The “But our GM likes it” Bias (Authority Bias)
Authority bias—the tendency to follow the boss’s gut over actual evidence.
Lesson: Data > opinions. No matter how senior someone is, bad revenue calls don’t become good just because a higher-up made them.
4. The “But everyone else is doing it” Bias (Bandwagon Effect)
Bandwagon effect—assuming that if everyone else is doing it, it must be right.
Lesson: Just because competitors panic doesn’t mean you should. Run your own race.
5. The “It’s only one bad review” Bias (Neglect of Probability)
Neglect of probability—underestimating how much impact something will actually have.
Lesson: Projection = Perception = Reality …. let that sink in for a while…
Final Thought: Your Brain is Costing You Money
Biases creep into revenue decisions all the time.
The key is knowing when they’re messing with your logic before they mess with your bottom line.
Data-driven decisions always win over gut-driven disasters.
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Revenue Management
