Net-presence firm thrives on the 'buffet' model
Derek Brown doesn't own a restaurant. But the former Microsoft marketing veteran has achieved exponential growth in his Bangkok-based "Internet presence" venture, Pronto Marketing, by offering his customers what he calls "all-you-can-eat" services.
Pronto Marketing assists its customers in managing their "Internet presence", which covers everything from designing, development, hosting and promoting customers' websites (through online channels such as blogs, local business directories, search-engine optimisation, local listing, newsletters and social media), as well as copy-writing and regularly updating the websites for unlimited pages, or "all-you-can eat", at a flat monthly fee of US$247 (Bt7,500).
It's similar to a buffet dinner, Brown told The Nation in an exclusive interview recently. He said his Pronto Marketing could bank on this "all-you-can eat" business proposition because some customers would have more and some would have less.
"People really like this model that we have taken care of everything for them at one price," he said.
With this new business model, Brown said Pronto has exploited a gap in the market where many customers are not satisfied with the website "template" services, whilst many small businesses are not quite ready to pay the usual fees for developing customised websites favoured by bigger corporates.
Brown said small businesses, which usually have limited resources, also find it too complicated to develop their own websites, or to spend a few months working with website developers, as well as constantly updating and promoting their websites via appropriate channels. On the other hand, these "Internet presence management" tasks have become critically important in today's businesses where customers make a decision in "seconds" on whether to leave or stay on your websites and inquire for services.
"If your website doesn't look good, they leave. You want people to immediately understand what you do," he said.
Thanks to Pronto's "easy no set up" and "pay-as-you-go" offer, Brown said his customers are very happy. Brown said Pronto has a very low attrition rate, which is less than 1 per cent a month. This high level of customer loyalty has been achieved despite Pronto's monthly subscription service model, which allows its customers to leave during any month, he said.
Thus, in the less than four years since it was set up in September 2008, Pronto now helps 730 small businesses in 13 countries, including the United States, United Kingdom, Australia, Russia, Hong Kong, Singapore, Dubai, New Zealand, South Africa, and Nigeria, managing their Internet presence. It has only a few customers in Thailand because the $270 monthly subscription fee is still considered too high for small businesses here, he said.
Thanks to the exponential growth rate, Pronto now expects its businesses to expand by more than 13 times to have a total of 10,000 customers within the next five years. In line with the projected business growth, the company plans to increase the number of people on its payroll from 40 to 500 people during the same period, said Brown.
For Pronto, this "marketing-as-a-service" subscription model has helped the company to enjoy a steady flow of revenue while experiencing no fee collection problems, compared to other Internet marketing firms that charge their clients on a by-project basis and normally experience some good months and bad months.
"We have incentives to make our customers happy," he said.
Competitors have tried to copy the Pronto business proposition but they struggle to have the quality, said Brown.
"We find ways to provide quality. First, we are in Thailand where the labour cost is cheaper than countries like the US. Second, we invest in good business processes. And third, we invest in tools and infrastructure. In some cases, we write our software for our own tools. These combinations make it hard to compete," he said.
Pronto targets small businesses in English-speaking countries. At present, about 90 per cent of its clients are small IT service companies that offer IT outsourcing to small businesses while the rest are small businesses such as attorneys, design studios and construction firms.
Pronto has run its business "entirely on the cloud" utilising many cutting edge Web-based tools and applications, including the Zendesk online help-desk to assist customers who are thousands of miles away from the firm's headquarters in Bangkok, he said.
Derek Brown was with Microsoft for more than 13 years before he quit the world's largest software company to co-found Pronto in Bangkok with his son Cory in September 2008.
Cory Brown, 27, said Pronto is seeking to hire 10 more software developers by next year, adding to its current two developers. The expanded team of developers will help Pronto strengthen its capability to develop some tools and applications for its own in-house usage.
At present, about 80 per cent of Pronto's 40 staff are Thai while the rest are expatriates. Pronto doesn't call itself an Internet marketing firm, as it doesn't do some activities such as e-mail and pay-per-click campaigns.