PHMG

Year founded 1998
HQ Location Manchester
Sector Media & Entertainment
Staff count 409
Turnover £49m
Founder and managing director Grant Reed says PHMG’s journey has been about slow, steady initial growth before “pushing the button to go big”, securing the company’s position as a world leader in audio branding.
homepage.phmg.com
Our journey has been all about careful planning and incremental growth.

Grant Reed

Founder & Managing Director

Growing at the speed of sound

With 32,000 clients in 39 countries and a headcount of 409, PHMG features in the Investec Mid-market 100’s fastest-growing companies. For the past eight years, it has notched up 40% year-on-year turnover growth.

Yet throughout its 20-year history, PHMG has scaled without the use of any external capital. “Our journey has been all about careful planning and incremental growth,” says Reed.


Seeing the potential in sound

It all started in 1998 when Reed had a eureka moment. He read that on average we spend about 60 hours a year on hold. In the late 1990s, this was even more infuriating since “all we had was either beeps, silence or Greensleeves”, he says.

Drawing on a South African idea, he saw an opportunity for on-hold marketing – telephone campaigns that would “educate, entertain and inform” callers about the client’s business. His first client was a small local hotel.


Creating a new category

Then three years later, Reed saw an even bigger opportunity. Big brands were spending millions on their visual identity, making sure everything from their letterheads to retail fit-out was consistent. However, when it came to on-site music, hold messages or voicemail it was another story.

Reed worked with existing client Jaguar to create an audio brand that would match its visual identity. This meant casting the right voice, creating campaign scripts and sourcing music that would feel authentic to the brand.

“We were the first to do audio branding,” says Reed. Soon the company signed up more brand-savvy clients keen to try out the service.


A new phase of growth

For 10 years Reed resisted the temptation to scale aggressively, preferring to grow organically. He gave staff “modest” remuneration but with a promise for a “piece of the action” should the company succeed.

The next 10 years have been a different story. Today, PHMG is the world’s largest audio branding agency and is now pursuing a strategy of aggressive growth. Last year, its revenue was £37m with £5.8m in profit. Next year it is forecasting a £49m turnover with a 100% increase in profit.


Investing in creativity

But Reed is careful not to be complacent. “Now there are lots of people that do what we do, so we try to do it with more gusto and focus,” he says.

Reed points to an investment in original music for his clients by top composers “who’d worked with Paul McCartney and Beyoncé”. Now every PHMG customer has a bespoke piece of music. This customer care, he says, explains the extraordinary overall satisfaction rate of 98.5%, gained in a survey from the Institute of Customer Service.


Could external capital be next?

Reed plans continued growth in the US and Canada, and he is considering opening an office in Australia. For the first time, he is exploring external investment.

As for clients he has yet to sign, he says he would love to work with Apple, Nike or the BBC. “I’m going to dream about that tonight,” he says.


Key Metrics

92%

Customer retention rate

30,000

Number of customers

35/65%

Domestic/export sales

Related Stories

The Office Group
A committed co-founder partnership fostered The Office Group’s reputation and track record, opening the doors to key investors and powering its meteoric growth in the London office market. Read more...
Rated People
CEO Celia Francis extols the virtues of how innovative tech helps to solve the very analogue problem of finding trustworthy tradespeople to do home repairs and maintenance. Read more...
Earth Immo
Founder and CEO Dan Johnson is scaling his real estate marketing business with intellectual and human capital, and despite the financial crisis denting his funding confidence he plans to raise more funds to expand into new markets. Read more...
The Intern Group
The Intern Group began in 2011 with three friends who arranged for a dozen volunteers to work at the Under-20 World Cup in Colombia, scaling up to become a £10m cashflow-funded business. Read more...
Greenwood Campbell
In the fast-moving world of digital technologies and shifting customer appetite, full-service digital agency Greenwood Campbell maintains a highly fluid approach to its intellectual capital while remaining committed to the human factor. Read more...
Way To Blue
Meeting the needs of its international clients from Hollywood film premieres to best-selling Christmas toys at Hamleys, integrated communications agency Way To Blue has gradually scaled its full-service offering across the globe, investing in agencies, platforms and most importantly, people. Read more...