Scaling Smart Pricing

Jim James 0:01

Welcome to the Unnoticed Entrepreneur . This show will tell you how to get the recognition you and your business deserve . Our guests share their practical insights and tools which you can use straight away . Your host is International Entrepreneur , podcast Host and author , jim James .

Luca Rodella 0:20

I'm going to say ciao because we are going to Italy . today We're going to meet Luca Rodella . Luca ciao .

Luca Rodella 0:29

Hello everybody .

Luca Rodella 0:31

We're going to talk to Luca , who is a co-founder of an amazing company called Smart Pricing , and it's a hotel revenue management system . They've got over 2,000 clients now , mainly in continental Europe , serving SME hotel and venue owners that need to maximize the revenue from their property . It's an unexplored area for us on this show . Luca , welcome to the show . I'm looking forward to you telling us more about Smart Pricing and how you've built this amazing brand . Now you've got five different offices across Europe , so tell us about Smart Pricing .

Luca Rodella 1:07

Thanks for having me . It is a pleasure . From the name probably you already understood a lot about what we do . We helped these little entrepreneurs , small hotel owners and apartment complexes owner to determine the best prices for their hotels and apartment complexes and lodging establishment across Europe . We do that in real time and they don't have to move a finger because we do it automatically .

Luca Rodella 1:40

Luca , now you said we could probably tell about what you do from the name , but not everybody chooses a name that says what the company does . People get a little bit confused . Tell us about your strategy for naming the company , because it's not as obvious as you've made out .

Luca Rodella 1:59

Sure , so we spend a lot of time deciding the name , so it was not easy . At the beginning . We start with a very bad name , actually , and after that we found out that the Smart Pricing domain , a lot of domains for European countries were available , and so we went for it . It was very good choice , because everybody understand immediately what we do and we understand that there is a power behind .

Luca Rodella 2:29

So , if you like , just taking sort of a direct approach of explaining what you do within the name , which seems So logical , is often not what happens , but , as you say now , smart pricing is fantastic . Just explain , then , how you are serving your audience and where they are , because then we're going to talk about how you managed to scale the business across the five different countries and dealt with issues of , for example , being across different languages . So , luca , tell us about where the business is operating now .

Luca Rodella 2:58

So we are mainly in Central Europe and Southern Europe and the two main languages are Italy and German And we started from Italy and we approach one country at a time . and we are a bit different from other B2B SaaS software as a service because we prefer to reach a dominant effect in the countries we operate and after that just switch not to reach , but start working , operating in the new countries .

Luca Rodella 3:29

And tell us how does that work from sort of a rollout perspective ? because , as with all businesses , you don't start with any customers . you start with a product , luca . So how did you get smart pricing up , you know , onto the net and into these venues so they could start using smart pricing ?

Luca Rodella 3:50

So two ways , it was said , to channels , to main channels like inbound , outbound . So outbound , more about we reach out to the potential customer , and inbound , on the other side , we use traditional marketing like online advertising with them , content , content marketing . We believe content is one of the most most important thing for us .

Luca Rodella 4:14

But at the very beginning , when you and your partners I think the three of you who started the business just explain how you got the first clients , because that's the you know the hardest part .

Luca Rodella 4:27

I believe the best way is to go meeting the people where they operate and speak with them , understand what are the problems the face and what the day by day looks like , and really start understanding how they work and how they face the delivery . And another important thing is that we have another company that manage hotels , apartment complexes , so we were our first client . So we decided to start on smart pricing because we had this problem ourselves .

Luca Rodella 5:02

I see So fantasy are able to sort of incubate the business mark pricing from your first company When you started to go out and meet . I'm sure they loved it and were receptive . But what were some of the challenges that you face , luca ? Because you're introducing something new . These are maybe owner-operated , family-owned businesses . How did you overcome their initial objections ?

Luca Rodella 5:31

So that's another very good question And it was not easy because our business like a lot of other businesses , but our business is a lot about trust , because we are changing automatically the prices for these folks , so we are kind of really determining their destiny in terms of revenue streams , right . So one of the biggest fear they have is that we screw up their pricing strategies and really lower too much or raise too much prices , And that was the biggest issue and the biggest problem and the biggest questions that we have about at the time And we still have .

Luca Rodella 6:20

Yeah , and so how did you overcome that ? Because you're affecting both their profitability but also their occupancy levels , aren't you , luca , which you know ? if it's overpriced and they've got empty rooms , then that's just cash that's gone out of the door , rather not come in the door , i should say . So how did you overcome that , luca ? Because you're a young company and approaching people who maybe didn't even feel they were doing anything wrong . They may have been quite happily trading with one price at a set and forget , with an annual calendar according to holidays and weather , and so on .

Luca Rodella 6:56

Yeah , i believe one of the most important thing was the free trial . Let's say , okay , we invest , we believe in your establishment . Like talking to the hotel owners , we told them we believe in your hotel , we believe you can really make more money from your business , so we invest time to onboard you and we invest our time and our people , time to go live with your property And you can try and if you're happy , you keep going with that . Otherwise you can stop using it . You don't pay onboarding , that's it .

Luca Rodella 7:34

Okay , that was really key then . and just a quick question then can the customers override the pricing of smart pricing So they still have some control ? if they want to , they can presumably see the flexible option pricing driven by your algorithm , but do they still have the ability to override that ?

Luca Rodella 7:56

Sure , absolutely yes . If they want to really override some prices , they can do that , but we see very few overrides , really less than 10% of the overall prices . Maybe at the beginning they are a little bit more afraid of what could be our pricing strategies , but after a while they just trust us and let us do our job .

Luca Rodella 8:21

So , luca Radella of SmartPrice , what about the issue of confidentiality ? Did the hotels feel as though , if you're in one hotel , that you might somehow have access to information or share the information with other hotels ?

Luca Rodella 8:36

Yes , sometimes they have this fear , but obviously it's not the case . We don't share any information with other folks , other logic establishments . We definitely use the information , the data . That's one of our important things , that more data we have , better our algorithms works . But we don't share information .

Luca Rodella 8:58

But presumably for the customers , the building of trust in your brand , the integrity of the data and so on will be absolutely key . So tell us also from a brand building point of view , luca , what have you been doing ? I notice now on LinkedIn , you've got nearly 20,000 followers , which is amazing . I know you've got some 2,000 customers , so you've got a big X 10X on LinkedIn . What have you been doing in terms of the social platforms to build out the brand awareness and generate trust for the brand ?

Luca Rodella 9:33

Yeah , i really believe that you have to give value to people , to create content that really matters to the people , to your audience , to your potential customer . So definitely , we keep working on content that makes sense and we keep giving value , not just with the company profile but with other profiles of our talents that work with us . So we try to work together to achieve the same goal . In terms of social media , i don't think it's the company page , but it's more about the profiles of other people that work with you . So it's about giving value for potential customers and clients , but on the other side , you have to target people that might work with you in the future . So employer branding , which we believe is crucial Employer branding is very important because finding the right people obviously is the way to go to keep scaling and keep growing , as we're doing .

Luca Rodella 10:41

Yes . So , luca , that's interesting too about employer branding , because you've now got five sites . I think you've mentioned to me before five sites , over a hundred staff and plainly growing .

Positioning and Communication for Smart Pricing

Luca Rodella 10:52

We can talk a little bit about the fundraising that you've done and how you've managed to position the company to be attractive to investors . But what has been the positioning of the company ? Because , as we know now , employees want to work for companies that they buy into as well as getting paid by . So have you gone about that ?

Luca Rodella 11:15

Yeah , i don't believe it's about , like , ping-pong tables . I mean , we do have some ping-pong tables , but I don't really think it's about ping-pong table , but it's about the culture that you have in your company , right ? So the culture of like we have like not jerk rules , and like mistakes are allowed and don't just say that we actually do that . And one of my first job is be sure that no jerks around , that people really are allowed it to do mistakes , make mistakes . And so it's about culture . And the interesting thing is that when you have the right culture and you really enforce these like very important points , as I mentioned , people arrive by themselves , like even developers , like that . A lot of times it's difficult to find them . They reach out to you and not vice versa .

Luca Rodella 12:14

Oh , that's very interesting . So the kind of existing employees are reaching out and it's getting new employees through sort of all my social networks .

Luca Rodella 12:24

Then For example , we have a lot of people that broke their like boyfriend , girlfriend , like wife or so like few people that did that . so that's one of the most important thing for us , luca that's fantastic .

Luca Rodella 12:38

Now you know . I like to ask a slightly awkward question , which is what hasn't worked so for smart pricing from a communications point of view ? are there any things that you can say that you've done , that you don't recommend that the unnoticed entrepreneur tries ?

Luca Rodella 12:56

That's a good point and we could talk for hours about this , but I believe that is really about being able to change strategy with the time . So when you start , you are able to go yourself meeting people and understand how they approach businesses and sell it in a certain way , so like in person . But when you start scaling at least in our case , we target small businesses you have to change a bit . So you have to be ready to change . So what we did wrong is keeping some time with some strategies and don't change the strategy until it was I mean , it was not too late , but we understood late . We could have understood that earlier . So like we went meeting people in person a lot and to a quiet customer , we did that probably too much . We could have stopped earlier .

Luca Rodella 13:51

Yeah , so , luca Radella , that's interesting that smart pricing once you've got a certain momentum behind the business . You know , going and visiting one or two customers is quite an expensive use of your time when you're running a bigger organization right , and then people start to come to you . Now through your inbound marketing as well , you've raised money and it will be very useful to hear you know what has been the positioning and the experience that you've got from a communications point of view , luca , for raising funds for a growing business .

Luca Rodella 14:25

So we raised so far on like five million euros equity and three million two point five million debt , and so around seven point five million totally . And in terms of communication , it's really about understanding the story , being able to tell your story and your future story to people . So the thing is a very valuable exercise , so being able to understand what did you do , what are you doing now and what you want to do in the future and it's valuable for , i mean sure , for raising and for the company as well , because you put down your thoughts and what is in your mind and definitely like in terms of communication , you have to really define the message you want to give , not just to the clients , but to a person inside your business .

Luca Rodella 15:27

Luca , i love that . would you give us The pitch , as it were , for smart pricing that you've given , to give us some ideas of Where you come from , where you are now and where you're going ? that'd be really nice to hear your story , how you packaged this business .

Luca Rodella 15:44

It takes kind of like 10-15 minutes for the entire pitch . So maybe next episode we can go through that , but like short you bridged , an abridged version .

Luca Rodella 15:55

Yeah , like an abridged version . Maybe you've got there .

Luca Rodella 15:58

Yeah , sure , so I serve , with the interest of the fact that we are bringing an industry That use software , that a lot of time are not on the cloud or don't use software at all to manage their task , to use AI . So , from really not being on the cloud , to use AI is not the first concept that we try to Make them understand , because , like to make our pricing strategies effective , we use machine learning models since they zero , and That's the first concept that we will try to communicate that investors . The second one is about numbers . So when we gave the high-level idea of what we want to do , what we are doing and what we want to do on scale We give to investor , the numbers of the business are quite good in terms of metrics , from cost of acquisition to channel rate and And we just try to make them understand that the numbers are there and they're great And after we go with our side .

Luca Rodella 17:00

So why are we doing this ? What are the reason behind ? so , as I said , we started With another business that still exceeds that . This process is a small business but very profitable and Thanks to that business We understood the problem in the industry and We really Did the work by ourselves . So we went there and clean up rooms . So we make them understand that we know what we are doing . And the pitch goes on and we that make them understand the product roadmap . So we call it with deeper It looks like today the product and how it would look like in six months , twelve months and 24 months , and Why we need the money and the investment to keep creating new tools and Goes on no , but I can see that's helpful .

Luca Rodella 17:51

That's really helpful that you've got the credibility piece about Yourselves there , but also you've got about the way that you're helping a whole industry transition Across the digital divide , and I think you've mentioned before Something like 90% of hotels in the continent of Europe are run by , you know , families or independent operators , and that's kind of the addressable market , isn't it ? that you've got , and that you've also got a roadmap for how you're going to get People from one place to the next . So Look at , that's brilliant , luca . If I can ask you a piece of advice for my fellow unnoticed entrepreneurs , as you've built smart pricing , great name , great positioning , right on the money in terms of what you're doing . So you've got a lot of practical wisdom you can share . What would be the one piece of advice that you might give to us About getting noticed ?

Luca Rodella 18:49

Probably sounds kind of common , for a lot of people said that , but I said that say are the same . So I believe you really have to care about the people , about your customers , and you really have to understand them and understand what they need not what they tell they need , but what they really need and Forget about competitors and just focus on like customers and loving them and the sending what really makes the difference for them .

Luca Rodella 19:17

And that's the only advice , the best advice I can give yeah , but that's one little advice though , luca Rodella , because You know that's the guiding star , isn't it ? the other Variables will change , but if you're always focused on the love of your customer , you know , ultimately That's what will guide the company forward . Luca , if you want to find out more about you and smart pricing , where can they go ?

Luca Rodella 19:42

So on LinkedIn my profile or on the company profile . So smart pricing , you find us , yeah , linkedin . On Facebook , we are more active on LinkedIn and Know our website .

Luca Rodella 19:54

So , smart pricing , dot IT and dot The that's one of the , because you got the Italian side and your German side , so I'm very grateful that you've come on the show and Share with me what's happening in , you know , in Italy and across Europe for hotel pricing . Luca Rodella , i hope I'm finally getting my accent right . I feel like I should be also waving my arms around a little bit more than I have been . Thank you so much for coming on the show today and sharing your wisdom with me and my fellow unnoticed entrepreneurs .

Luca Rodella 20:28

Thank you for having me . It was great and ciao . See you soon .

Luca Rodella 20:32

Yes , i say ciao . Is it out of a ditch , isn't it ? Yeah , they're over there , cheesy . I've been studying at my school , boy , italian . Thank you for joining Luca Rodella and myself here on the microphone , and if you've enjoyed this , do please share with a fellow unnoticed entrepreneur . And if you like the show , please review it on your player . And until we meet again , i just do encourage you to keep on communicating . Thank you for listening , ciao .