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.