Data for subscriptions podcast - Episode #36
Exploring Dynamic Pricing
Guest
Pedro Piccoli Soares
Head of Pricing & Traffic Monetization, Omio
Guest
Pedro Piccoli Soares
Head of Pricing & Traffic Monetization, Omio
Episode description
In this episode of the Data for Subscriptions podcast, we dive into the intricacies of data management and dynamic pricing techniques within the travel industry. The conversation also covers the challenges of data complexity, revenue management, and avoiding revenue leakage, along with strategies for maintaining profitability and customer satisfaction in a sector that demands immediate feedback and solutions.
Highlights
Managing Millions of Transactions with Data
The episode opens with a broad overview of Omio’s operational scale, emphasizing the sheer volume of transactions processed by the company annually. The magnitude of these transactions presents unique challenges and opportunities for data utilization and management. A critical aspect of managing this volume is identifying valuable data points and leveraging them to influence business strategies effectively. The conversation delves into the complexity of this process, particularly the need for robust infrastructure, considerable processing power, and extensive time investment. The aim is to glean insights from the data, such as customer price sensitivity and willingness to pay, to make informed decisions that could positively impact the customer base by adjusting prices or offerings to drive volume.
The Significance of Accurate Data in Monetization
The podcast transitions to discussing the crucial role of accurate, real-time data in Omio’s monetization efforts. The ability to understand and act upon the shifts in customer base and market perceptions in real time is highlighted as a substantial competitive advantage. This section of the discussion acknowledges the challenges in managing complex data systems and ensuring that the pricing reflects accurate and up-to-date information. Pedro underscores the importance of a dependable backend data system that can handle many transactions and dynamically adjust offers to meet customer expectations and needs.
Addressing Revenue Leakage through Constant Monitoring and Partner Reconciliation
The episode also addresses a critical operational challenge that many data-heavy companies face: revenue leakage. This issue, characterized by losses due to data inaccuracies, can result in unsatisfactory customer experiences and financial discrepancies with partner suppliers. Pedro shares Omio’s proactive strategies to combat revenue leakage, including the execution of regular reconciliations with partners and constant monitoring of transactional accuracies. This section offers listeners a window into the rigorous processes and checks Omio implements to maintain the integrity of its financial transactions and partner relationships. The discussion emphasizes the importance of transparency and accuracy in operations to safeguard revenues and maintain trust among customers and partners alike.
Transcript
Behdad:
Hello, and welcome to the data for subscriptions podcast, where we learn and explore how to run better subscription businesses. My name is Behdad Banian and I’m your host. And today I have the pleasure of welcoming Pedro to the show. Welcome.
Pedro:
Hi. Hi. Good afternoon. Pleasure to be here.
Behdad:
Pedro, you’re head of pricing and traffic monetization at the Omio. And, we’re gonna talk all about dynamic pricing today. But before we do that, why don’t we spend a few minutes you talking about yourself? And I would love to learn what you did before you joined Omio and what led you to Omio as well
Pedro:
Yeah. Yeah. For sure. Makes sense. Makes sense. Well, so, I’m actually from Brazil. I was born and raised there. I studied industrial engineering, later did an MBA there as well. And I started working, with pricing almost, 15 years ago. So I worked my whole career at pricing. Initially, I was working in a b to b company, the manufacturing industry, so completely different than what I’m doing right now. So those much more stable, more traditional market, working with bigger OEMs, like long term agreements, like planning things for 5 years with the same prices or with the same agreement, readjusting prices once per year. So a completely different setup, and also working with a bit of what we call, value based pricing. So, basically, when you try to understand, what are the differences between your product, your competitor product, and how much more value you deliver or less value, but also then how this reflects into the price, that you charge your customers. I worked at it for a few years. Later on, I joined at Heineken. The beauty company is still in Brazil, leading the revenue management area to in the south of Brazil. It was my first experience with a bit of a b to c. Of course, you don’t buy anything directly from Heineken, But as, of course, they are a huge, player, you can still play around with the with the prices, on the shelves and to the end consumers. So it was super interesting to see how can the this, campaigns, promotions have an effect from one day to the other. Right? So if you run a small campaign of discount by 10, get one for free. You can see it from one day to the other, the variation in the volumes that you sell. So this was super interesting, especially for someone that was like, used to scenarios where you change prices and you’ll see the impact in a very long time. Right? And then in 2019, I moved to Germany, to join FlixBus. It was, when I joined, yeah, we were still growing, a lot in Europe. My role was mainly focused on Spain, and Portugal. I was responsible for the go to market strategy around pricing in these 2 markets. So, what should be our price points? How would we tackle our competitors’ campaigns, launching campaigns with super aggressive prices, and so on. And then, 2 years after that, I went to 6th, the rental car company, so it’s still in the in the travel space. A bit more focused into the product side of pricing, so building tools, and systems, for the pricing team to work with. Working a bit, with automation, artificial intelligence, and how to use this to optimize the prices that we were defining for the for the cars that, the company was renting. And then 2 years ago, almost yeah. Now at the end of this month, it will be 2 years. I joined at Omio. It was a completely different experience from what I had in the past because, like, you know, not in terms of size of the company. We are still a scale up, versus the previous companies that I was working, which were, much more, robust in terms of market size. And, of course, here, when I joined, I was the first person in the pricing team. So a lot of challenges around this, like, to structure the function, to share a bit of the knowledge, the importance of the area, and create some sort of a culture inside the company, around pricing, revenue management, and profitability. Right? And just a bit around Omio. So I think we a lot of people might not know the company yet, but Omio is basically German start up. It was founded 10 years ago in Berlin, and what we provide is a platform where you can search, and book, tickets for trains, buses, flights, and ferries. Right? So it’s, you can compare the different, prices, different departure times, duration of the trips, select what whatever suits you best, and complete your whole, booking through our platform. And then, of course, you have your ticket, customer support, and everything, on our, on our platforms.
Behdad:
And when we want to talk dynamic price pricing, before we get into the weeds and details of things, why don’t we talk about and just define what it is so everybody’s on the same page? What do you mean when you say dynamic pricing?
Pedro:
Yeah. So I think in a nutshell, it’s basically when a company defines, the a pricing strategy, well, where they will change prices, over time. So it’s it basically means that you don’t have a static or a fixed price all the time for all the customers in all circumstances. So, of course, there’s no clear definition on how often does the price need to change to be considered dynamic, pricing. But it’s just this idea that you will monitor a few criterias, a few parameters, and your prices will adapt, according to it. So I think, the most common example, and it’s also where this whole idea of revenue management and dynamic pricing started, is in the airline industry. So roughly in the eighties, they started to have their first revenue management systems, to optimize prices. And I think it was, the CEO from American Airlines that said that if he could have one price point for each of the customers, it will be perfect. Right? So it would be the most granular way of defining prices because each customer will have a different willingness to pay. Therefore, each of them could have a specific price point. So it’s not that easy to identify, in that level of granularity. But the idea is that you can understand if someone is booking 30 days before departure, one day before departure, what is the difference in willingness to pay, or same thing depending on from which city they are traveling, from to which city they are traveling to. So there are many criteria as a season of the year, day of the week. Right? Someone traveling maybe on a Friday as a completely different, we didn’t anticipate than someone traveling on a Monday. Or Yeah. Depends. Right? So it is a leisure or it’s a travel business. So, again, this all started with the with the travel industry, mainly airlines, then it moved with also to hospitality. So it’s the same thing we see, with hotel rates. Yep. And then, of course, later on, I would say, probably around, early 2000, with the boom of online sales, this also moved a lot, into the online retails. Right? So it’s something we see at Amazon, and all the other players where you can buy things online, that they have a lot of information as well that they can process. And with that, they can adapt prices dynamically again. Right? Exactly.
Behdad:
I think, this is going to be a really interesting topic, for me and I think for the audience because at its core, we’re speaking about price elasticity, and it’s about demand and supply. I think the examples that you gave are fantastic. Maybe some of our audiences would recognize maybe everyday situations with, Uber where you have Yeah. You’re standing on a corner and you can literally see on your Uber app that the price goes up when you do searches one minute versus the next minute. This is what we’re speaking about that, price adapts to, and there’s something happening in the background. The fascinating part of this discussion is that in order to get there, you need just a really sophisticated way of managing that data that sits behind so you can have those triggering points that you refer to. Why is dynamic pricing good for the customer, Pedro? I mean, why is a fixed price versus dynamic? So for me as a customer, why is that good?
Pedro:
Yeah. So the main thing is that at the end, it targets different willingness to pay, and that dynamic pricing is not only about increasing prices. Right? So it depends of the point where you take as a start, but if you consider how cheap maybe, flight tickets are if you buy long in advance versus, on the day of departure, there’s a huge advantage for those who can actually plan. Right? So for those who have the flexibility of maybe instead of traveling on a Friday at 6 PM back home, someone that can fly, during the morning or on the Saturday, there are also advantages of finding, cheapest options, and more competitive prices. Right? So it’s just a matter because we need to keep in mind that, especially in the travel industry, but it’s the same thing with Uber. Right? There is a limitation of inventory. Right? So there’s basically, there’s times of the day. There are situations where there’s not enough inventory to provide to everyone. So this is a way of, at the end, understanding who has a higher willingness to pay or who has a higher need versus those who are more flexible and can take it in a different time for a better offer, for a better price. Right? So I think that the fact of having a dynamic pricing strategy is that you can actually offer lower prices. Right? So for so as a customer, you can actually find, better offers, than maybe a fixed price. Right? But, of course, there’s also the other side where in some situations, it can be more expensive. Right? This is clear of how it works. But as a customer, I think it gives you also from one side the option to get cheaper options. And from the other side, when you actually have a real need and you need that product, you can get it. Right? There’s still inventory available for you. Yeah. You might need to pay a little bit extra, but if you actually need for something, it will be there and you’ll have this inventory as well.
Behdad:
Obviously, this seems like an ideal way of pricing also from the company side because many of the factors that you pay for the customer conversely can be applied for the benefit for the for the vendor or the company providing the service. Are there challenges, though, Pedro, to providing dynamic pricing?
Pedro:
Yeah. Yeah. I I think that the the biggest challenge is is, how to make it accurate. So I think you mentioned, price elasticity before, and we we all saw at least one economics, one to one class, like a, price and demand curve. Let’s see. Like, price is increasing, demand is decreasing, and you have, like, a very stable curve. But the thing is that if you want to plot that in real life, that’s not that simple. Right? It’s not that easy to understand what is the impact of a 1% price change on the demand. Is it just at the time that you are measuring, is this elasticity, like, constant over time? What happens? Because you can do a measurement of price elasticity and understand what is the impact of these price changes to your customer, but this can change in 1 month. Right? There can be a new player, a new product, your competitor did a different campaign. So the biggest challenge, is to to have this proper measurement so that you can actually reflect that on your prices. And, also, at the same time, you keep this, some somehow always updated. Right? So that you’re always understanding what are the changes on your customer base, on the on the perception, and so on. And I think, of course, what what suits, well in this podcast is is the data part. Right? So which data do you use for that, so how reliable this is is, to actually make a decision. Yeah. Yeah.
Behdad:
I appreciate you mentioning that in terms of accuracy because it’s also worthwhile saying for anybody that might not intimately be aware of how you guys operate is we’re speaking about a lot of, let’s say, data transactions, meaning when we do searches and when we choose different options and it’s happening in real time, I want my feedback and answers and the different price points immediately, and it goes back and forth. So there’s a tremendous amount of data complexity in the back end that you need to manage in order to provide that accurate pricing, resting on that accurate data in the back end. Right?
Pedro:
Yep. Yeah. Exactly. It’s a huge volume of, transactions, at least on our side at Omio. What we see that we’re talking about millions and millions, of transactions, per year. And, of course, to manage all of this and understand, which are the data points that we can use, how can we use them, and what is the impact of different changes we’ll have. It’s something that takes a lot of, of, infrastructure of time, of processing, and so on. But, yeah, I think that this is also the beauty of it at the end. If you have just a few data points, it’s super hard to learn about price sensibility, willingness to pay, and so on. But on the other hand, when you have this kind of massive amount of transactions, you can actually understand what is the impact that any price change will have on your customer. So how much more volume can we get, if we decrease prices and so on.
Behdad:
Right. Let’s go to the data point. I think we’ve been touching it a few times now. So what kind of data do you collect to, for the purpose of monetization as, is your responsibility?
Pedro:
Yeah. Yeah. So I think in general, it’s, it’s the same thing, kind of the same thing around the whole, travel industry. Right? But I mentioned a couple of points that, that make a lot of sense when people are traveling, or searching for a day or for a trip. I mean, as I said, seasonality is something that, has a huge impact. So if you’re traveling during summer or during winter, we know that prices of flights, of trains will change completely. Right? Same thing with the day of the week. So you start to get more granular. Then you go from months, you can then go to day of the week. Right? So maybe Mondays Tuesdays have a completely different behavior in terms of demand from customers. And if you go even more, we can talk about time of the day. Maybe people, yeah, have higher willingness to pay to travel early in the morning, and late at night than at, I don’t know, 2 PM. Right? So these are some of the things as well as countries, where, from where, which cities, which are the main hubs that have higher demand, and so on. Right? Depending on how, let’s say, which type of a product you sell, you can even consider weather. Right? So if it’s a restaurant that that is right in front of the beach, maybe there’s something there that can be played out with the weather conditions, with the weather forecast. So it depends on, on the type of product that you are selling. In the travel industry, many of these are very similar, same as, I was mentioning hospitality. Right? So how many days in advance are you making your booking? So if you go to a hotel to take the a room for tonight, the price is probably different than if you booked it 5 days in advance. Right? So there’s probably a different rate for people that just go to the counter and want, to book the room right away. So these kind of things, usually, of course, they always play around with, the willingness to bake of which situation, but also with the availability. It could be that the hotel is actually full or there is only a couple of rooms left. Right? Because as I said, that the inventory is something that can also be managed, with dynamic pricing, revenue management, and yield management.
Behdad:
Do you also take into account aside from what we call all of these let’s label it internal factors because you can track based on our behavior on the Omio platform. You take into account external factors. So let’s just take here during the summer, the Olympic games was in Paris. And since we know that, then we can say we expect certain behavior. Do you take these kind of major or minor events into account?
Pedro:
Yeah. Yeah. Yeah. Exactly. For sure. Whenever there’s something that we can somehow, account to, we will try. Right? And I think you made the example of the Olympics, which is a perfect one. So it’s something it’s an external event. It’s impossible to use, let’s say, our last year data to model something, for this year. If you consider take Paris as an example, what is the demand for Paris? So whatever we had as data from, 2023, 2022 is not reliable for 2024 because of this external event. Of course, it’s not easy to integrate, this event into any kind of modeling. Right? But we need to somehow run some some adaptations, some estimates, and understand what is the impact of this, this thing. It can be with concerts, with, Champions League, with whatever kind of, huge events that you know that drive demand to a specific place. It’s something that we try to account when when it’s, important. Yeah.
Behdad: So we’re going to venture a little bit into the technicalities, although it’s that’s not your primarily, primary responsibility, but I think well, you already mentioned that we’re speaking high volumes of data here. When you say transaction data, it’s search data and all the different examples that you’ve given so far. Let’s talk about how your back end looks like when we often talk about the quote to cash or order to cash. How what kind of systems do you have in place, and how does the data flow through, so to say, if you give us a rough overview of that?
Pedro:
Yeah. Yeah. And, also, I think we have a lot of different systems that try to play together with each Yeah. Each other. Of course, we have connections with our own providers or direct APIs with our own providers that give us the information about the products that we are selling. Right? And then internally, we have all our own platforms where we can monitor all the transactions, every single sale that we did that we can later on also, yeah, do the settlements with our providers. So what it was that we can sell at which price points, for when, and so on. So this is basically how it comes, and then, of course, together with some sort of a CRM or internal CRM model that we have so that we can then understand as well which customers can we retarget with what, which, what else can we offer, and try to monetize further, from someone that made one specific purchase, for example.
Behdad:
Because I can imagine given the role that you play, because you have literally thousands of we could call them partners Yeah. In your network. And since you specialize in what you refer to as multimodal transportation, but literally what you have, which is kind of unique compared to some of the other players, is that many different ground and air transportation all in one. So basically you can go to make it again very, very simple. If you’re going on a business or private trip from a place where you need flight, train, bus, ferry, and you can literally do all of that a to zed on your platform. Yep. And so the actual transaction, the payment is done through you guys, so I pay you. And then you sort out the payment and settlement towards the different, let’s call them suppliers or partners. Yeah. Yeah. Exactly.
Pedro:
Yeah. Yeah. And this is exactly right. And, this is one of the beauties of Omio, that you can have multiple offers of different products, and that basically customers cannot find this, this variety of offer, anywhere else. Yeah.
Behdad:
I can imagine that this also presents a lot of challenges. We spoke about that before, but if I take the picture of the enormous amount of data that you capture from the customer side and our behavior, and then mix that up with the back end of providing the right type of service and being able to sell it, and let’s just make it a tad more real and complex. I might regret myself and there are refunds and there are disputes ongoing. What are the challenges when it comes to managing this data back and forth between the supplier side and the customer side? If you can talk through us a few of those.
Pedro:
Well, no. I think I think you mentioned, it’s very correctly that there indeed are this kind of, cancellations, refunds, and everything that comes together with buying a ticket for a flight or for a train. And as you said, we also have many, many different providers or many different, suppliers. And I think that the main difference, and this what also makes Omio Omio quite unique, is that we have this, integration with all the companies. Right? So it’s something that takes a lot of time to build, and this is where Omio invested a lot of time over the years so that you actually have this kind of integration with all of your partners to manage this kind of cancellations, refunds, and so while also selling the tickets, getting the information of what we display, on our platform in terms of departure time, price, duration of trip, options of different fares. Everything that you can buy directly on the provider, you can also buy through us. Right? So all this integration that give us all this information and also allow us to make all these, transactions, it’s something that is super hard to build with so many providers, and this is what makes Onio unique, basically. Yeah.
Behdad:
How important has the automation and effectiveness of managing this transaction data. Has it has it been for Omio? Because you’ve been on a journey yourself. I mean, you’re a scale up, although you’re pretty sizable for being a scale up. Typically, our observation is that companies start with quite manual efforts. It quickly then catches up because it becomes really hard, it becomes costly, ineffective. Data errors can occur. How important has this automation of these workflows and data transaction been for you?
Pedro:
Yeah. It’s extremely important because I think, that’s the point. Right? When you start to grow and you have the amount of, transactions we have at the moment, it’s impossible to be done on a manual basis. Right? So you do need to have a very good level of automation. And this is something that, as I said, we focused, in the past years, not only to create all this, integration with the different partners, with the different suppliers, but also to try to automate these things, as much as possible. Right? And, also, if we want to have new integrations or new partners on board, how can we speed up the whole process? What can we already automate, and what have we learned from previous, integrations to speed up the new ones, so that we don’t spend that amount of time as we probably did in the past. Right? But, of course, the automation piece is key. And I mean, we we had only, I think, we were discussing this just, before. It’s a product led company. Right? So we try to do everything, and all the interface with our customers, everything that we offer to our customers, we try to do it as best as possible, learn, iterate, improve. But at the same time, we are very tech heavy. Right? So we have a huge team of, engineers that are working on all this sort of automation, connecting with the partners, data flows, and so on. Right?
Behdad:
This was a key bet for you guys when you started off earlier, it sounds like.
Pedro:
Yeah. Yeah. Yeah. For sure. For sure. This was, I think from day 1, what what Naren envisioned, and Naren is our CEO and founder, was have exactly this. Right? So, like, one shop stop, where we have an integration with everyone, and this can then be offered, as a combination of different providers, different travel modes, where no one else would be able to find or you cannot find anywhere else. Right?
Behdad:
One challenge, that we also observe is that when you have different systems, especially when you have a rich partner ecosystem as well, one of the main challenges that different data formats, they don’t speak with each other. Is that something that you’re still facing today despite the fact that you work with automation and and effectiveness?
Pedro:
So I think that, during this integration phase is yes. So once you’re connecting with a new partner, every time we’re connecting with a new partner, we will see this, sort of issue. But we also try to understand what can we do in a most similar way to what we already have, what we actually need to adapt. But it it’s kind of in a sense that when the data enters a domio, we have our own standard, and then we also have the flows to ensuring the data back to our providers to enter into their standards. So it’s a huge complexity and takes a lot of time during implementations or integrations, but at the same time later on, it it makes things easier. But, of course, each different provider, it’s a I think this is for any industry where you work with different partners, with different external companies. Every single piece of data that is, exchanged comes in different formats. Yeah. Yeah. With different whatever. Yeah.
Behdad:
One of the nightmare scenarios for many companies, especially the ones that are highly dependent on data, is something we call revenue leakage, meaning that you have data errors that then leaves money on the table and or unhappy customers and or unhappy, partner suppliers as well. How are you guys working with that as a topic? Like, how confident are you about, that there are no rev there is no revenue leakage? And just talk us through some of maybe your advice as well on it.
Pedro:
Yeah. No. It’s something that that we monitor, quite constantly, and we do this kind of reconciliations with our partners, every single month, basically. But I think you mentioned before a point that that puts the complexity of it. So you can have, people canceling different refunds, refunds for different reasons. Especially in the travel industry, you have, cancellations from the flight that was canceled from the customer that canceled. So there are different ways of having points where we could see leakage. Right? And I think also, like, different currencies, different time of the day, prices that are changing over time from the provider. So everything that we discussed is around dynamic pricing. Our providers, they also change their prices dynamically. So they’re also adapting their prices over time. So all these kind of issues, they make things much more complicated. But it’s a topic that we’ve been said since day 1 is something that fits into how Omio works. And, of course, we always put a lot of, efforts into this to try to improve as much as possible. Yeah.
Behdad:
So, it sounds like you guys are off to a very strong start in your journey. Yeah. You have a strong platform. Let’s talk a little bit about the future. Where is Omio heading if you kinda cast the timeline ahead about 2 years? Where would you envision Omio being? And, also, let’s talk a little bit about maybe AI because everybody is so hot on that topic. It does how it might benefit and influence as well your offering.
Pedro:
Yeah. Yeah. Exactly. No. That that’s a very good question. I think we we mentioned Farris. So Farris is one example of a product that was recently launched. We are still learning from it, pushing it, trying to to get a better sense of the market, how it works, around the seasonality around Farris. But this is kind of how Omeo works in terms of expanding. Right? So we are trying to either integrate new products, new markets, new supply. So always trying to increase what we can offer, to our customers. And at the same time, if we think of, what are the current needs, in the travel industry, I think especially after the pandemic, we see a lot of demand for more flexible products. Right? So people really want to be in control of their journeys if they want to cancel, if they get sick, if they want to change the date. So this is something that Onio is really focused on at the moment on putting this flexible aspect inside our products. So offering other options for the customers to add on their journey so that if they want to cancel, if there’s an issue or complication, how can we supply, them with the right offer? And at the same time, our customer support, which is always there 24 hours, so that the customers can always have someone to to back them up if something is happening. So I think that that the main focus for the company is to continue, on this kind of, growth scaling, but also adapting the the products, to what the market is is requiring at the moment. And so I think that this is, what probably we’ll see a bit more in the next years, around the company. Yeah.
Behdad:
I think the point of flexibility is a great one. We we kinda touched it in various ways when we were discussing, but I think it’s it’s a great one because I do sense that especially in tougher economic times, companies do put a squeeze a little bit and as customers, it starts to become a bit more difficult and that typically leads to customers being unhappy. And I do think that this again comes back to because of the fact that you have such a flexible platform already today in terms of the payment options, all the different travel options and so on, Maintaining also that at the core that I can choose to change and adapt as much as possible without it hurting me as a customer. It’s a very enviable and admirable position to have, but it’s very difficult.
Pedro:
Yeah. 100%. 100%. I I think that and when we talk about flexibility, of course, it comes, as I said, offering options to cancel, or insurances or options to lock the price. But at the same time, just having what is the core of one view. Just having the option to check different travel modes already gives you a bit of flexibility. So learning that instead of going to the airport, you can just take the train that is, right next to your place, and you can also reach your destination or that you can take a bus that you never heard about. It’s it also, gives you this this sense of being flexible at only your your own trip and and making, the decisions of what suits you best. And I think that, yeah, in some senses, what we try to do is also to complement what is also there in the market and add more to to what is there on the market. But I think that especially in the ground industry, that there’s still a lot of things to develop. Right? I think on the airlines, they always been, ahead on these kind of things, offering different options, different fares, and so on. And in the train industry, in the rail industry, bus industry, it’s something that is still, yeah, under development that I think We are rigid. Yeah. That’s a great point. We are trying to explore this a bit more because, I mean, we see we see the demand for for, trains in Europe growing a lot in the last years. I think there’s very strong sense, very strong movement around flying less and and taking more trains. But, of course, then then the product also needs to adapt to what people are used to. This is something that we are focusing a lot in trying to to give the right offer to our customers. And at the end, it also plays around with how you price it. So the way, like it or not, agreeing on giving a a a refund to the customer has some sort of risk related to it. Right? So you are you’re taking the risk that percentage of your customers may cancel, and you need to refund them. So this also plays around on how you define the prices, for your product. So it’s it’s a very interesting scenario. But at the end, the goal is, of course, to give more options, and to give more flexible options to the customers so that they come to Omio and they see that they have what they need.
Behdad:
Yeah. But as a final, question, to you, it seems you guys had only have taken several of the right decisions early on and really follow through in execution. For anybody who’s listening, what will be your advice in terms of the 2, 3, maybe most vital decisions to get right?
Pedro:
So, I mean, I’m a pricing guy. So I think that the area of pricing is always super relevant. And as I said, the was the first person into this area. So I think most of the companies are still, exploring or doing pricing in a more simple way or with not that amount of focus. And when considering profitability, quality of what you will deliver, and also how much investments can can you can you bring inside. I think having the price done right is a very important thing. Right? So really think about how are you defining your prices. What is the impact that it has on your customers? How much more demand can you generate by decreasing your prices or how much more profits can you generate by increasing your prices, and not being afraid of change? Right? So I think in a lot of situations when discussed about pricing, people are a bit careful, really, worried about the potential impact of reducing a bit the prices or not. So I think that this is something that if it’s done correctly, even from day 1, I think there are some some, some authors that they say that new products, they should be developed at first around the pricing strategy. Where do you want to place it? Is it expensive, cheap, high quality, low quality? So you first you you develop the strategy around how you’ll price it, and then you develop the product. Right? So you understand what the market is actually willing to pay for that. Yeah. And then you decide how you develop your product. So it’s a different concept of having the product done and then deciding how to price it. So I think that this is, for me, it’s this is the key takeaway, and it’s always what I what I like to share. As I said, as a pricing guy, that we need to have this sort of focus on this because the impact is huge. I see more and more, companies focusing on the area of pricing, hiring people, and really going aggressive into pricing strategies, but it’s something that maybe smaller companies, still take a bit of of time until they they see the the the value of that. So yeah.
Behdad:
Great. Pedro, thank you so much for, joining us and also sharing your experience. And thank you for everybody, tuning in and listening in.
Pedro:
Perfect. Thank you. Thank you.