revenue management strategy crossword

revenue management strategy crossword

The Ultimate Guide to Revenue Management Strategy in the Crossword Industry

1. Introduction to Revenue Management in the Crossword Industry

The price of crossword puzzle magazines or publications has gone up quite a bit over the years. According to the US Bureau of Labor Statistics, prices for newspapers have exhibited a downward trend for more than 30 years. The price index for periodicals reached its highest level in 2019, with the revenue from digital sales only remaining constant when compared to printed periodicals. However, the volume of the magazine industry has decreased by nearly half, from over 12 million copies in 2010 to around 7 million copies in 2020. What is the reason for this? In your youth, you could find a magazine stall with around a hundred puzzle magazines that would satisfy all puzzlers and send them on a journey of imagination. But times have changed, and less paper has been developed in the last 10 years. Specialty magazines have connected the eyes, brains, and hearts of like-minded people among varied themes. And editors are required to produce monthly and, sometimes, bi-monthly, quarterly, and annual publications. What few consumers know is how the industry works and how revenue management occurs.

Founded in 1987, Puzzler is the leading provider of puzzle and word games in the market. Puzzler’s range covers hugely popular entertainment styles such as crosswords, arrowwords, codewords, Sudoku, and word search, with publications for every need and ability. Puzzler’s licensed puzzles have fans globally, providing key engagement and retention for apps and websites. A large and loyal fan base enjoys the company’s print publications, enjoying puzzle games for hours and hours. Relx Group has owned the Puzzler business since September 2019. Puzzler’s revenue management approach is to sell a fixed number of copies to each client for a season at a fixed price. Once all clients have been serviced, any surplus stock is sold at a discount through the puzzle magazine direct channel. When excess stock is present at the end of the season, a deep discount is offered to the wholesale channel.

2. Key Components of an Effective Revenue Management Strategy

Understanding how to design an effective revenue management strategy can often get confusing as there are many elements at play. In addition, most businesses do not use one of the most useful tools to actually achieve revenue increases – a dynamic pricing model. This is something that hotels, tour companies, and the airline industry have been using for years. A strategic dynamic pricing model that finds price increases can be especially effective in the crossword industry. It requires little additional outlay of cash, but can potentially make a positive financial impact. There are many other aspects of an effective revenue management strategy besides just pricing, including demand stimulation, customer segmentation, cost structure, business rules, and distribution channel management. Success requires all components working in concert.

3. Implementing Revenue Management Techniques in Crossword Publishing

The initial reason for the publisher to behave as described in the literature comes from the basic need for most customers to plan their travel in advance. Tourists are getting information about tourist attractions in different places and destinations available for any dates of interest in the future. They are scheduling their travel through reservation dates for the available destination events and their associated airlines and hotels. It is clear that the initial time t=0 when the information becomes available is never the same as the actual departing date t=T. In the same manner, the minority of the destination attractions are reasonably known days in advance. Most of the attractions have to be researched almost daily and you need informational resources to get information about events occurring at any time over the foreseeable future days. The price considerations for such contemporaneous activities are not different from those for the published crossword puzzles. In both cases, the expensive process of information collection and processing has to be financed through the sales (tourism activity discounts) of highly perishable products (peak consumption hours services).

For the pricing and placing problem, we show that our model is flexible enough to take into account a set of real-world constraints, intrinsically associated with the problem under discussion. These are the number of puzzles the publisher has available, the possibility of confronting periods of low demand and the fact that there are typically going to be customer price sensitivity. Solving the stochastic programming model of the crossword publication pricing and placing problem gives the optimal sequence and quantity of puzzles to be published at each local operator, as well as the corresponding equilibrium prices and remaining unsold capacities. The strategic complementarity of the operators is clearly exhibited in the model.

Crosswords belong to the category of word and letter puzzles, where crossword solvers need to find the words and put them one after another following a pattern given by the puzzle grid. We consider crossword publishing a special type of revenue management. However, publishing crosswords has some characteristics that make revenue management techniques unique in this context. Obviously, this is a cost-sensitive industry. The overall solving time is limited. Thousands of travelers have to solve the puzzles during rather short periods and a small number of local operators coordinate the initial scheduling of the publication. The operators can enforce a mandatory premium on the publisher equilibrium prices through sheer market power. Equilibrium prices and revenues will reflect these facts, even without any deviation from the last-minute premium strategy.

4. Case Studies and Best Practices in Revenue Management for Crossword Puzzles

4.2 Recommendations. To properly utilize the recommendations, we first require a viable set of options. Thus, the goal here is not to optimize, rather to create a convenient set that consumers will likely choose from. To that effect, I therefore investigate the present puzzle set construction for making price point data convenient for the demand models. These operations take advantage of the demand structural findings and also address the requirements of the forecast model that separate grids into independent clusters. After building this data reduction, I will then show how these recommendations can be used as proxies into the complex problems we previously explored.

4.1 Dimensionality reduction via actionable items. As discussed in the previous sections, a major stumbling block to applying complex demand models is the sheer dimensionality of price point options that constrain demand. However, in practice, there are not an infinite number of actionable price point combinations. While it is true that a given puzzle can technically be conjured with an infinite number of clues, across hundreds of possible configurations, some of these options are indeed not viable. In colloquial terms, the demand models require price point data to make strong inferences. While it may seem arcane to ask consumers to potentially sift through a twenty-item menu, instead we offer a way to reduce these choices to a much easier task for a relatively large number of consumers that makes an investment in simpler demand models payoff. The rationale here is demand must already make this dimensionality reduction process, we should leverage it by asking consumers to express this optimal price point set.

5. Future Trends and Innovations in Revenue Management for the Crossword Industry

The current challenge is that the crossword industry does not have a comprehensive model to capture the data or a sophisticated model to analyze this vast amount of data. The proposal is an instantiation of comprehensive revenue management models customized for the crossword industry. The revenue management system is designed to create multiple revenue streams, namely memberships, in-game purchases, advertising, and non-member sales, also known as a freemium business model dialect. The models include an advertisement pricing model, a merchandise forecast, a first-time installer pricing model, a regular user pricing model, first-time installer admission controls, and finally regular user access controls. The innovative model starts anticipating the feed before the creation process. The whip could be antagonists who are simply testing hypotheses and taking risks. The article then invests in a model to be trained only on testing and validation data. When aspirant moves to incumbent, the revenue management plans shift to promote the last phase’s content retention motives and price without price decreases. The sustaining power is product innovation. The model moves to identify, through market segmentation and competing demands, key characteristics of key customer segments, desires for the segments, and how the game product and its prices fit these segments. Significant frictions, mainly related to scarce content availability, prevent the existence of radical potential disruptive entry business models.

Future innovations in the crossword industry will significantly enhance revenue management capabilities. With the help of data science and artificial intelligence, theories that were previously discussed will be automated and analyzed in-depth. These are also very complex theoretical problems related to optimal pricing when consumer preferences and demand are unknown and dynamic. However, with the technology that exists today, dynamic personalized pricing and revenue management will be efficient for large industries and particularly subscription businesses. Due to this article’s narrow scope, full accounts are omitted. However, let’s discuss how this is to be done in an already tight interest bandwidth and a revenue management model or scorecard as proposed in this article would be profitable. Additionally, the automated answer generation is a by-product of creating a confidence scoring system, an important step in determining market segmentation, a key functionality in marketing in a subscription business. I have described all these techniques to set readers up to imagine how the crossword industry could potentially implement these innovations.