Rhythms In The Data

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Although Smith had gained a few customers prior to the summer of 2006, it was the hiring of Michaud, whom Smith called "our final ingredient," and the launching of a complete marketing campaign that got the company off the ground. The company boasts more than 50 accounts, including DeLano IGA Markets, Holiday Quality Foods, Super 1 Foods, Hollister Supermarkets, C&K Market and Earth Fare.

McNair says it's a good start, but even doubling the number of smaller-revenue clients won't be enough to be a big success. "Revionics' sales force has to be very good and build a critical mass quickly or they are going to struggle," McNair points out. "It's easier to sell to the big companies that are already familiar with price optimization. Revionics faces the formidable task of convincing small-business owners to take a leap of faith that this will work. It could be difficult."

Revionics charges its clients between $75 and $150 per week, with an initial startup fee that ranges from $1,000 to $2,000 per store. "That way they don't have to write a huge check to us right up front," says Michaud. "There are also no tortuous implementation processes and no project budget or time overruns. We make it safe and simple for them to use our product."

Smith put the Sacramento area to the test when he started his hunt for investors five years ago. "It was right after the dot.com bubble burst, a horrible time to be out looking for money," he says. "I was working on faith during that time, and the Sacramento area came through pretty well for us." While Smith won't say what percentage of his initial funding came from the Sacramento region, he does characterize it as "significant."

Although he has no identifiable competitors, Smith admits that a certain amount of "evangelism" will be necessary to convince smaller companies of the benefits of price optimization. "There aren't many stories out there because customers find it such an advantage they don't want to talk about it," agrees Lori Piening, director of marketing and communications at Texas-based Zilliant, a price-optimization provider for the business-to-business sector with offices in San Mateo and London. "But with mainstream companies like Oracle stepping in offering price-optimization services, it's only a matter of time before companies will need the service just to compete."

Still, the financial viability of selling to the smaller markets remains untested. "Jeff is tough and persistent, and he knows the business side as well as the developmental side," says Ken Ouimet. "If anybody can gain inroads into this new market, he will. But the real question is whether there is enough revenue available. I believe there will be, but time will tell."

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