We talked to Federico Quarato of Premoneo on how to improve profitability and margins with pricing, forecasting and segmentation tools.
First of all, how are you and your family doing in these COVID-19 times?
Federico Quarato: Quite well, thank you. In search of a new balance after the changes that this exceptional event has brought to my business and that of my wife, between a child still too young to understand and some family projects postponed to less uncertain moments.
Tell us about you, your career, how you founded Premoneo.
Federico Quarato: As a child, I wanted to be a journalist, and when I was 18, I started working with a local radio station in Milan, then I joined a national network and went on TV with parenthesis at Sky Sport 24. Once I got my journalist badge, I was aware that writing and talking would be one of my activities but not the beating heart of my professional life. So I discovered that a journalist could be useful to businesses, advising mainly funds, banks, and insurance companies. Then at the age of 28, I decided that I wanted to be useful to my company. So, together with some brilliant partners, I started a startup initially created to offer dynamic pricing technology to the ticketing industry. We thought that dynamic pricing could fill cinemas and stadiums as well as aeroplanes. That project has grown and expanded: Premoneo is a suite of web applications for key activities in business life such as pricing, forecasting, and segmentation.
How does Premoneo innovate?
Federico Quarato: With Premoneo, we provide pricing intelligence software that allows companies to extract value from the large amount of data they have available and increase their profit margins, making their marketing & sales choices based on the analysis and suggestions developed by the platform. To do this, we use proprietary technology, also validated by theses of universities such as Politecnico di Milano and Tokyo Institute of Technology, which we have been developing since 2016 to respond to new market needs.
How the coronavirus pandemic affects your business, and how are you coping?
Federico Quarato: The COVID-19 has certainly marked a turning point for our company. From one day to the next, working mainly with companies operating in ticketing and travel, we found ourselves without more products and services to price due to the lockdown. An unthinkable scenario in a year that promised great growth, with a solid base of clients and new companies in the onboarding phase. The pandemic inevitably put these projects into crisis. Aware of the strength of our technology and thanks to the support of my team, as well as the advice of my mentors, we decided to get to work on software that would make our technology useful to other markets such as retail, energy, banking, and insurance in optimizing key processes such as pricing, sales forecasting, and customer segmentation. This software has been in our plans for some time, but Covid has accelerated the process. I’m proud of what our team has managed to do by turning a moment of crisis into an opportunity, rhetoric aside. And the first feedback on the market makes us believe that we have chosen the right path.
Did you have to make difficult choices, and what are the lessons learned?
Federico Quarato: This situation has brought with it moments of concern and deep reflection. I felt powerless in the face of an event that was, to say the least, unlikely ever considered because it was unthinkable until the day before, despite the predictions of a guru of the caliber of Bill Gates. We were able to compact the team in the face of the storm and face the darkest months with the knowledge that we knew where to arrive and how to get there. Only efficient financial management over the past few years has allowed us not to succumb to sudden difficulties without requiring any financial effort from our employees and collaborators.
How do you deal with stress and anxiety? How do you project yourself and Premoneo in the future?
Federico Quarato: Analyzing data by profession, I feel I can say that as of today, 9 October 2020, we are still facing tough months, and it will take some time before the sectors most affected can return to recording pre-Covid numbers, but it is essential to be ready for the recovery. We certainly believe in respecting the rules imposed by the authorities and in the virtuous behavior that companies should adopt, first and foremost, in full compliance with their social responsibility. In the hope of not witnessing a new lockdown, which would be ruinous, I believe that at times like this, great opportunities can arise for companies able to understand the change in advance. We hardly work to be among them.
Who are your competitors? And how do you plan to stay in the game?
Federico Quarato: Our new competitive arena that of pricing software, is certainly complex and challenging. There are solid realities, active for more than 30 years and with a worldwide customer base and companies with a more similar path to ours, but operating in ecosystems more sensitive to innovation and digitization. Suffice it to say that PriceFX, a company founded in Germany in 2011, has just completed a round of funding of $65 million, a sum unthinkable to raise in Mediterranean Europe. It is not easy to compete with companies with such strong investors, but rounds of this kind confirm that pricing is an upward trend. At a time of market uncertainty, companies seem to understand more easily how pricing can become a key strategic lever to improve their business performance. Moreover, compared to when we started in 2016, there is more preparation on Artificial Intelligence issues, and it is, therefore, easier to talk to our clients about these topics in the commercial phase.
Your final thoughts?
Federico Quarato: I sincerely hope that the worst is behind us and that in the coming months, several factors will contribute to the improvement of the situation. Above all: the spread of the vaccine, a greater scientific knowledge of the virus, an increased ability to diagnose and treat the disease, and the virtuous behavior of people. Waiting for an effective vaccine, it is essential to do everything to avoid a further stop to the country’s productive life. Many companies, this time, would not be able to survive.
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