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What does the state of local businesses in Italy look like as we reach the pandemic’s first anniversary?
Conquer Local travels to Italy to speak with Roberto Giacchi, CEO at Italiaonline. Italiaonline is the largest and top digital group in Italy; they are an email provider, web advertising sales agency, and digital communication agency. They truly act full circle in the digital world, both in what they do and who they talk to. George and Roberto discuss what makes Italiaonline’s business model unique and different than the rest of the country, the state of local businesses in Italy due to the pandemic and how businesses adapted to the mandatory lockdown, and the toil of working remote as we reach the first anniversary of when the pandemic started.
Born in Turin in 1968, he graduated in Economics from La Sapienza University in Rome. His career began at KPMG in 1994. In 1998 he joined TIM group and followed the M&A activities for the international development of the group in Latin America and Europe. In 1999 he joined Bain & Company, where he followed projects of strategic, commercial, and financial nature, in particular for the Telecom, Internet & Technology sector, becoming Partner in 2005. In 2007 he was appointed CEO of PosteMobile and leads the company from its foundation throughout the start-up phase until its success on the market. In 2014 he moved to Poste Italiane and assumed responsibility for the Mail, Communication, and Logistics business unit, participating with this role in the group’s successful IPO up in 2015. Subsequently, in 2016 he assumed responsibility for all Poste Italiane Group products of the Business and P.A. Market. In 2017, he became Group Chief Financial Officer of Poste Italiane; in December 2018, he is appointed CEO of Italiaonline.
George: Welcome to this edition to the Conquer Local Podcast. I’m your host, George Leith. We’re taking you around the world today. We’re going to go to Milan, Italy, and in just a couple of moments, we’re gonna speak to the Group CEO at Italiaonline, Roberto Giacchi. He’s going to be joining us in a far, so that was awful Italian attempted accent, it wasn’t even close. But that’s a Canadian saying, Roberto Giacchi. He’s coming up next. Our special guests this week on the Conquer Local Podcast. I’m very excited for today’s episode of the Conquer Local Podcast. And Roberto is joining us all the way from Milan, I take it.
Roberto: Yeah, I’m in Milan, afternoon.
George: Great, and I am not good at pronouncing Italian names. So I would let you pronounce the name so that I don’t butcher it too badly.
Roberto: Yeah, my name is Roberto and this is the simple part. And then my surname is Giacchi.
George: Giacchi, see, I would’ve said, Giacchi, and then I would have made a mistake. So, and we’re not even gonna edit that out because people are used to, our listeners are used to George making mistakes and sometimes even making up whole words, but I’ll try not to do that today because I’m very excited to get into the content. Roberto and I have been in numerous circles at the same time although we have never sat and had a glass of wine together. So we’re going to have a glass of virtual wine today and discuss some items. And Roberto is the CEO of Italiaonline and Group CEO. So, you know, first off, Roberto, I’d love to understand the portfolio of companies that you were responsible for and understand, you know, as we talked when we met earlier, how your organization is conquering local and then we’d like to learn a little bit more about the Italian market. So first off, you know, your role and the organizations that you’re responsible for.
Roberto: Yeah, so as you said, I am the CEO of the Italiaonline group. As a group, as a whole group, we compete in the digital arena. And in the digital arena, we actually are involved in different businesses. We are a publisher, actually in Italy we are the biggest native digital publisher. Then we operate in the small medium enterprise segment and towards our customers, we provide web and business solution to develop their online presence and their online business. Then we run several online directories at local marketplaces in different segments like health services, house services, just to give you an example. And then we recently launched two new businesses. One is the gaming, gaming business, digital gaming, and the other one is health tech services. So services for companies operating in the health sector. That’s what we do. We do through the Italiaonline brand. But of course, mainly for, especially for the publishing business, we have other brands that we use for all the different segments.
George: And I remember a number of years back when I had a privilege of doing, you know, 20 day tour of your beautiful country, we actually were using some of your sites. I didn’t know at the time, but in order to find restaurants or grocery stores or things like that as we stayed in our Airbnb and traveled around the country. When we talk about digital publisher, I think it’s important for people to understand. And I got this lens from other Conquer Local Podcast alumnus that know you and do business with you. So, Kimberly Lewis, who is the Executive Director of Sinda, who you know, and Pete Urmson from Spotzer, who you know well, were telling me that you were one of the earliest adopters in Europe of a fully, and you call a digital native, a fully digital functioning sales force. In fact, that’s all they offer digital solutions. You were out in the front of this before, you know, numerous other groups were.
Roberto: Yeah, I mean, our company is coming from an aggregation of different companies. And the field of these aggregation was to find synergies within the digital arena. So we are able to put together a strong digital presence with a strong local presence. And these give us our unique positioning in Italy and make our business model really different from all the other digital operators in the country.
George: I remember seeing a presentation of yours in the past and I actually found it online and watched it previous to this episode and that vision that you had to service those local customers. One thing I would be remiss not to ask. There is a piece of a promotion that we’ve used over the years. The Conquer Local Podcast is heard in 50 different countries. And in those countries, of course, there’s different languages. How is Conquer Local pronounced in Italian?
Roberto: How is, sorry?
George: How would we say, Conquer Local, in Italian? Because you know, you’ve been conquering local with your organization for quite some time.
Roberto: Conquer Local, I mean, it’s difficult to translate it, in Italian it would be like. Yeah, it’s like being a conqueror. Conquester Local.
Yeah, yeah, locally is locale. In Italian words, yeah.
State of Local Businesses in Italy
George: Well, I know that we’ve had folks from Iceland, and we’ve had folks from Paris, and we’ve had folks from Africa, and this is something that I think we should do, and, Colleen, make a note, let’s do this in season four and get the translation. All right, let’s start to understand the business a little bit more because I know that you’re laser focused on helping those local businesses, but I think it’s important to articulate to our audience that Italy has faced some significant challenges since COVID. In fact, probably some of the most severe challenges of any market that we’ve been speaking to, and you and I really dug into this in the pre-interview, and you told me you’re entering your third lockdown you know, it’s been a massive challenge I’m sure.
Roberto: Yeah, it has been mainly for the fact that we were the first country outside China to really face this emergency. So, we end up one day, I remember it was the end of February last year that we discover the first case. And the discovery was really by chance. We were not actually actively looking for cases because we thought it was impossible to have cases in our country, COVID cases in our country. Then, in 10 days, the country was completely locked down. We were closing our houses, and we discover that the number of cases were not single case, but there were thousands of cases. And hospital start to receive and accept a huge number of people needing for assistance. And so, I remember also the surprise of other European country to see all the people basically stay at home. And then unfortunately we discovered that that was just the beginning. And of course, having the full count, the whole country locked at home, we suffer on our small medium enterprise business, that is the majority of our revenues. And at the same time we benefit for our publishing business, because the number of people visiting our digital properties actually exploded, but it was not enough to compensate what we were losing to on the other businesses.
So March was a very tough month, but then situations start to improve and actually April and May, were month in which, thanks to also different consciousness about the importance of e-commerce and digital services, there was a rebound on the demand and we were able to recover most of the business that we lost at the very beginning of the pandemic.
George: Can I, you know, one of the things that I’ve found as we’ve spoken to guests all over the world, was we had that period where there’s a shock. So, number one, I don’t think if we would have said three years ago that we would be able to lock down an entire economy. Like basically in your house, you’re not going anywhere unless you got to go get groceries or go to the pharmacy. I don’t know if I would have believed that. And yet, here we are, we come through the month of March and it really did happen. So I think there’s this, what I’ve heard from other executives is there was this shock and then we’ve got a sales force. And how large is your local sales force at Italiaonline? The folks that go out and deal with those small and medium enterprises.
Roberto: We have 800 people spread all over Italy and they basically learn in few weeks, a different way of doing business. Staying at home, connecting by video with customers, and signing contracts in the digital way. So this was a real push to move everything digital. Of course.
George: No, I didn’t mean to interrupt but you know, it’s really interesting you said that. And, I remember talking to my friend, Greg Ryan, who is the Chief Revenue Officer of ThriveHive which is now owned by Gannette in the United States. And he has a very large sales force like yours. And he said, you know, one of the big challenges was that sales force was used to going face to face to see their customer base. And yet they had the tools, you know, they could do a video share, but the the sales motion really was go out and see the customer, that’s the relationship that was built. So there was this, he felt there was this period of adoption of the technology. And once they got through that shock, and realize that there was an efficiency there, where, you know, you could maybe see more people because everyone was embracing this remote way of selling. Did you see that spike as well as that part of what led to the rebound in the month of April?
The Remote Way of Selling
Roberto: Yeah, yeah, yeah, sure. I mean, I think that every one of us if would have been asked how an unthinkable situation like the one that we are currently living would happen what would be the consequences? I think that we would have all answered that we would have experienced a dramatic decrease of productivity from all the employees within the company not only from the sales force, but actually we saw that this was not the case. We were probably better than we thought at that time to manage distance business as we did during this whole emergencies. Of course, face to face meeting are important. We can not say that that part of the business activity is not useful anymore. Is a key part, but probably the mix between virtual meetings and physical meetings have shaped forever. And the balance that we will have after the emergency will be a balance very much different from what we have at the beginning.
The Relationship Capital
George: I wanted to ask a couple of the questions around that because you are echoing what I’ve heard in other organizations from executives, yet, you know, our company is in the software business. And when you look at software companies, you have CEOs standing up saying, we’re sending the entire workforce, they can work from anywhere on the planet. But I have said on this broadcast over the last now almost a year, that what we found in our technology company was that the collaboration of a team in a room where they could actually collaborate, and stand at the water cooler, or have a coffee together, or go for lunch together, we found that it was fraying at the seams after a period of time. In the beginning, it worked, because we had to make it work, but we get eight, nine months, down the road, and we found that that collaboration was starting to collapse. Like we traded off the capital for awhile, and now it’s starting to come apart. Are you seeing any of that within, especially on the sales side, ’cause as we all know, sales is a little different than other functions. It really is, it’s more of a mental thing as much as it is how you deliver the math. You gotta have a mental state and and you gotta be positive. Are you seeing any of that happening on the sales side of the business.
Roberto: Yeah, I mean, I think that we were positive social prize at the beginning, from the fact that the productivity didn’t go down. But at the same time, being now 12 months, in this emergency situation. We have also understood that there is a social capital, a relationship capital within an organization that is going to be daily diluted by this distance working that we are doing now. In Italy, we are still 100% remote working. And of course, this is damaging our relationship capital within the company. And the relationship capital is as important as, at least as important as the productivity GPI that we measure, because it’s the relationship capital that helps to develop innovation is the relationship capital that is the pillar for the company culture, the company values, the company behaviors. And we see these clearly from the newly hired people that clearly lack all these value that you can find in a person that was used to work previously of the emergency in our company.
George: One of the things that we’ve talked about on this very broadcast is having a level of competency to be able to deliver a presentation or a client meeting in a virtual environment like this, is very similar to sitting across the desk from the customer in their office. But a lot of folks are treating it as, you know, they’re at the beach, a day at the beach, And the level of professionalism seems to have, you know, I measure a lot of calls inside our 200 and some odd folks that deal with customers. And we’ve really been working with them to, you still have to have that level of professionalism. It’s still is a business meeting. Now we have some empathy because we’re all working from home. And, the odd time the dog will jump over us, or a kid will come into the room, and we don’t have that in the real, but have you found that that professionalism is something that you really have to reinforce with the teams that are dealing with those customers?
Roberto: Yeah, I mean, this is something that we have to maintain first of all, and as soon as possible to reinforce.
Roberto: So, the plan is, as soon as it is possible to come along together in their offices and to reestablish the relationship that we used to have before. And just to give you an example of why this is really mandatory for ourself is that, we are around 2,000 people company. And in the last 12 months, we have hired about 300 people. These 300 people are really struggling to enter in the company mechanics, to enter the company culture, to enter the company values, to enter the company behaviors, essentially the people coming out from university, they are still outsider within the company. So we really need to group together and to restore our relationship capital.
George: Now, that’s really, you know, we’re living that today. You know, we’re in the middle of adding 100 folks on the customer facing side of the business, not including what we’re doing in research and development, and definitely feeling that the onboarding, virtually is a challenge. And it even is a challenge. I will tell you, in tech companies that I speak to that are 100% remote, where the board and the CEO have said, we’re doing 100% remote. The biggest challenge is always that onboarding and induction of that new folks. So, you know, we’re all living that challenge. I really wanted understand the gaming and not a pivot, but a new product line for you. Was that something that was on the roadmap and did it accelerate because of COVID? Was that something that you put a focus on or is it something you’ve always been moving towards? And online gaming we’re not talking about playing football online, we’re talking about gambling, I assume.
Roberto: Yes, also gambling. This is something that we plan for a while, and that we launch just after the beginning of the emergency. And is a business that is based on three pillars. One is sports betting.
Roberto: The other one is desktop gaming. And the third one are hyper casual games provided to the customers through app that we make downloadable on the app store.
Roberto: And all these three different gaming initiatives have benefit from the fact that, people spending more time at home have more digital consumption.
Adapting to Technology
George: Now, that makes a lot of sense. You know, it’s interesting. The parallel that I’m going to draw is on previous broadcasts we’ve speaking about, that trusted expert. The person that has the relationship. So, Italiaonline has a relationship with an audience, and a very trusted brand in the marketplace. And you’ve found an adjacent offering, that obviously there was demand for and used your brand to bring it to the customer. And we see this more and more where very very strong brands are able to adapt technology. It’s one of the most amazing parts I believe of the time we’re living in right now because you’re a strong organization, you have resources, and you had a concept and you know, technology, it’s not cheap, ’cause I know you have to make that payroll to pay the people that built the technology but it is relatively easier today to be able to bring that to market inside an organization and do a new revenue line than before. How long were you in the development of this from the moment that it was something that, you know, came across your mind, you wanted to do? How long to when it got launched? Just so our audience can, I guess what I want our audience to understand is when you go into a new business, there always is, there is a period of time, there’s some iteration, there’s some learnings. I’d love to understand what that roadmap looked like.
Roberto: Yeah, I mean, I was appointed CEO of a Italiaonline group two years ago. And when I arrived, on one side, I recognized that we had a very strong brands, reliable, trustable, and appreciated by our consumer customers, first of all. But, on the other side, we were monetizing this brand equity and the audience that we had, and we still have, only through in advertising business model. So, we decide one of the first exercise that I did, one of the first activity was to draft the new industrial plan. So, in that industrial plan was included a strategic shift that declined the objective to monetize our audience not only through an advertising business model, but also through a transactional business model. So gaming is going this direction. And the other transactional function that we have implemented in our properties are going in that direction. This is a strategic direction we have taken. And this is something that we want to develop to associate traditional advertising revenues with transactional revenues. And to diversify the risk. Because you can have difficulties on the advertising side that can be exploited in the transactional side. Like for example, during an emergency like the one that we are living in.
George: Right, well, you know, congratulations on being able to take that existing business and bring new functionality to your audience. And at the end of the day, obviously there was a market there and revenues follow that, because you were addressing the demand in the marketplace. I have one final piece that I wanted to touch on. And that is one of the things that I’ve been told. And we didn’t talk about this pre broadcast. So I’m gonna spring this on you. Is that your sales organization is quite prolific at having that digital conversation with the local business. And you’ve been able to bring on so many website customers across, and in fact, I know organizations that talk about, you know, if only we could help our businesses with websites the way Italiaonline has done. What do you attribute that success in helping those businesses? Because I think there’s a lot of customers of yours that are very happy that they have an e-commerce solution in a time that the business is locked down.
Roberto: Yeah, I mean, this is another strategic shift that we did, because at the very beginning, we used to have an Italiaonline Academy for training our people. Then we decide to use our Italiaonline Academy also to train customers, also to teach customers how to use digital services. And before the emergency. we used to have these training section that are free. So customer are invited to attend this section for free only in presence. So only physical training section. And we used to count at each section, a number of customers in the range of 8,100 attendees for every events. Then the emergency started and we were forced to move our training events to online, to webinars. And given the fact that you can access easily to a webinar more easily than a live event. And to the fact that the digital awareness throughout our customer base and our potential customers, spread during the emergency. We start to count the number of attendees in the thousands, not more in the tens of customers. And then after the webinar, our sales people are able to reconnect with the attendees and to move on, to follow up, on a digital platform or with physical visit whenever it’s possible.
Roberto: So this is a success story that is helping us a lot to travel this difficult time.
George: Well, I’ll tell you what, you are charmer, because Producer Colleen is, you’re speaking to her heart right now, because she is our director of our Conquer Local Academy, where we have remote learners and you were doing it ahead of time. So you definitely have a fan across the studio right now that’s got a big smile underneath her mask. You know, I’ve always been impressed with the organization that you lead. You’ve got a great group of folks, I’ve had a chance to meet some of your folks here over the last month or so on other conversations. And, congratulations on, you know, I’ve met a lot of folks, you are a true digital innovator and quite inspiring to our audience, I’m sure. Especially faced with, and I really gotta, I gotta put a pin in this. You’re on your third lockdown. And that market has been really impacted by it. And to still be able to continue to assist those customers is something to be said for the the organization and the leadership and the team that you’ve assembled. So, you know, all the best to you and your organization. Really appreciate having you on the broadcast today. And I’m gonna give this a shot and you can coach me. Thanks for joining us today on the podcast.
Roberto: Thank you, George, it was a pleasure. Thank you for inviting me. Have a great evening. Thanks for your time.
Thank you, bye bye.
George: I like Roberto, great guy, super smart business person. And you can tell that he has a definite strategy and vision for his organization. Let’s unpack the deliverables from this episode. Number one, you could tell, you don’t just start a gaming business overnight. It was in the roadmap, but it was accelerated due to the fact that, you know, he said it in the broadcast, March was one of the worst months that they’d had and then they had a rebound, but it is these new lines of business. And this is the pivot that business people need to have.
And I think that when you look at successful businesses in the world that we live in today, and I think we’ll have to even get at this agility, and have that head on a swivel where you can look and kind of see down the road and be a bit of an innovator and a visionary, and then to move quickly and purposely. And, you know, he came in with this idea of we have all these eyeballs, which actually accelerated, it’s interesting, that line of the business, and then come up with a way to capture that demand. So that’s the gaming portion of this. Number two, he was speaking about that remote workforce, especially the sales motion. And I think everybody on this broadcast has had moments where you’re sitting here going, when do we get to go back where I could just connect with the person on the other end of the Zoom Meeting or Google Meet. It is a little different. Like it is an art to carry on remote work, and we’re dealing with people, and we’re dealing with relationships, you know, the solutions and the problems that we’re trying to solve, really tough to be solved by a robot right now. So, you know, they’ve been dealing with that as well, in probably one of the most challenging markets on the planet. Italy has been hit harder than most markets. So, a lot of empathy for those folks and, you know, what a great place, if you haven’t been, I will tell you, it truly is a stunning place and amazing people.
So then we talked about this idea of learning. And, you know, I think that everybody on this broadcast, you’re probably not listening because my charm, talent, good looks, any of those kinds of things. You’re listening because you know you need to learn. And we’re blessed with a team that brings in amazing guests like Roberto. And they had been doing this learning because he was one of the first sales organizations that had went 100% digital. So they started in the publishing business, and he still calls himself a publisher, but everything is done online on a number of different portals in various verticals in the Italian marketplace. But what they are is, you know, these experts and then you need to educate the business person. So they’ve got that two layered approach, the training for their internal teams to stay on top of a world that’s moving underneath our feet. And then the training for the client. And they give that away. And I think that that is an interesting model that numerous organizations have tried to do, and it’s getting easier, but it still is effort that needs to be deployed. You need to have some sort of a delivery mechanism. You need to have a platform.
Now, with COVID, we’re sitting at home, we’re locked down, and, we got time on our hands. And I think you’ve been finding yourselves listening to more audio books, reading actual books, listening to more podcasts, taking online learning courses. I could throw a whole bunch of data at you that actually supports that, that online learning is a thing, it’s a massive industry. But what Roberto is saying is what we’re hearing from all sorts of organizations that are successfully navigating this new normal. They are bringing online learning in as a way to support their customer base. And at the end of the day, what they get is more sales, because they have a more educated buyer that the solution that’s being offered will solve a problem that maybe they didn’t even know how bad it was. So, Producer Colleen got really excited when she heard that because of course, she’s our director of the Conquer Local Academy and the Conquer Local Community, which is growing way beyond our wildest dreams. I think some of the early key performance indicators were like, if we could get 500 learners, this would be great. And now it’s well over 10,000 learners and it’s growing at an astronomical pace. Part of that is content. But number two, it is a demand that is out there in the marketplace where people are thirsting to learn. And, you know, as conquerors, that you need to be learning on an ongoing basis or where the world’s gonna pass us by. So, it was great to hear those validation points from the Group CEO of Italiaonline, Roberto Giacchi. And I’m gonna do this a little bit differently as we wrap things up today on the podcast. You know, I think I completely butchered what it is in Italian. So, let’s just go to the expert here. Okay Google, how do you say Conquer Local in Italian?
In Italian that’s called. Conquer Localy. My name is George Leith. I’ll see you when I see you.