Istvan Czilik, CEO of revenue management firm Revenue.ai, explains how his line of work is gaining traction in the Middle East and how artificial intelligence is transforming it.
When, where, and why did you start Revenue.ai?
We started Revenue.ai in Geneva, Switzerland, at the beginning of 2020, just before the COVID lockdowns. That was quite a challenging time. We were super ready for the lockdowns – we were actually geared to run like that – but people were reluctant to join with a startup in its very early phase when the world was about to collapse.
Now, we started [Revenue.ai] because, from the founding team’s experience, we saw that, in the CPG market, in the FMCG market, in retail, there was a significant change in how to drive more profit while serving customers better. This is influencing everything, from digital vs brick & mortar stores to driving more products into the market; making sure these are the products that are consumed and scaling [back] the ones which are not working; being able to service all of the stores but making sure that you’re actually just servicing as much as needed, etc.
Many companies are [already] doing that, so we looked at how we could disrupt and realized that the disruption would come with artificial intelligence. In the coming decades, this whole area will need to turn in real time and the only way to do it is with artificial intelligence augmenting the way people work. One way is to introduce levels of simulations and make sure that with fewer resources, you’re able to cover more. Another way is to offer intelligent assistance. People are always confused about the kind of numbers to look at, where to find a given number, their standing in their business line, etc. Direct communication, by phone or WhatsApp or others, is also very popular. So, we can provide information and insights as if you were talking to a real person.
You upload your data – that you either acquired or built on your own – to our cloud-based platform and the system is going to help you optimize your product portfolio, your promotion portfolio, your price architecture, and similar classical challenges so that you can increase your profitability. You get multiple flat price scenarios, how prices could evolve in the future, promotion recommendations, instant insights, market standing vs competitors, etc.
What is your business model?
This is a subscription service. Anyone who is interested in our product can subscribe easily. It only takes a couple of weeks to implement the product and we make sure that it works efficiently for any region. We also offer other paid services, such as data optimization, revenue diagnostics, demand forecasting, and other modules.
What challenges are you facing?
Being a startup. Being a revenue management company. Being a remote company. I can answer in multiple ways!
Let’s focus on being the revenue management aspect. I would imagine building confidence is not easy.
Revenue management is only one or two decades old, and many companies think they already do it, but they don’t. It’s a data-driven system, so one of the core principles of revenue management is that you make decisions based on data. Adoption [means understanding] how many data sources you need to use.
For example, you can predict how your competition’s promotions work [based] on household data because that’s what you can buy from Nielsen and other companies. Our algorithm can calculate exactly this, saving you $100,000 or $200,000 per year per country. But it requires AI; it requires trust in data; and it requires understanding what exactly we are doing, and this is the challenge. Customers need to believe and to understand – and we need to prove our cases every single time – that our AI engine can predict exactly what they were spending a couple of $100,000 per country per region for in the past, and that it’s as good as it was before.
So, a lot of your work right now is educating clients, right? How do you approach that?
We have two major drivers on education for now. We started a webinar series which we are going to keep building on. And when we start initial conversations, we do provide some insight and trials so that customers can go and test the system out on their own.
When did you start in the Middle East and how is it going?
We partnered with [Lebanon-based agency] Imagine Labs in April. I believe that the MENA region has a good potential to become a thought leader, leaving behind many of the things that other regions already invested in. It was not using revenue management in the past and it is growing extremely fast today. The region is getting richer and generates much more income, becoming a significantly stronger driving force.
