AGENCY 2003: Telemarketing Agency of the Year - MM Group

Organic growth and a synergistic acquisition have helped MM Group rise to the top of the telemarketing pile in 2003.

Rated 11th in Marketing's League Tables two years ago, MM Group is fast achieving its aim of becoming one of the UK's biggest outsourced contact centre agencies. In September, it acquired its Bristol neighbour Contact 24 from Havas, pushing it into third place, with a turnover of more than £50m.

The agency continues to prosper, despite the highly competitive environment, reporting £4.5m of new wins and organic growth this year. Pre-merger turnover is on target to rise by 14%.

The acquisition should hugely strengthen the service offered to both existing and potential customers, boosting MM Group's positioning in the marketplace. The group's traditional client base comprises the public sector, financial services and charity sectors, while Contact 24's experience lies in retail, with customer care lines and pharmaceuticals.

The takeover will also allow savings in overheads and should enable MM Group to reach its target of a 10% profit margin within two years. It is now capable of handling the biggest projects through an extended network of multi-channel fulfilment centres in Bristol, Northern Ireland, Cardiff and Leicestershire.

MM Group chief executive Jeff Smith plans to reach a turnover of £100m within five years, expanding through new business as well as further acquisitions in Britain and Europe.

The agency's striking advance has been achieved despite considerable challenges that beset the sector. It has become hard to recruit top-calibre managers from a tight labour pool, and there is a constant threat of consolidation, with stiff competition for the very large contracts the agency will need to fulfil its targets. Nor is it easy to invest for growth while working within 5% profit margins.

However, the demand for outbound telemarketing is growing as agencies harness the power of data, and MM Group has enjoyed a number of successes in this sector. One is a venture for Littlewoods, targeting people who are moving house.

Using a test pool of 12,000 leads provided by the client, agents called individuals to find out whether this move had created a need for any new products, emphasising Littlewoods' easy payment methods and fast delivery times.

The agent talked the person through each area of the house from white goods for the kitchen to bedroom furniture, finally dealing with the patio and garden area. The test exceeded the 10% conversion-to-sales target by 3%, and the campaign is likely to be rolled out next year.

MM Group has added an outbound element to its work for Volvo, having provided an inbound response service for the past eight years. The activity involves agents calling motorists to organise test drives and later converting to sales.

Volvo has increased its number of leads by 70% and conversions by 25%.

Research by EHS Brann has found that of those who received a call about the finance package and the benefits of owning a Volvo, 40% were more likely to purchase.

MM Group has also extended its outbound work for Bayer, as it seeks monthly orders for medicines from general practices and pharmacies. A new research element is helping Bayer to understand the grey market and calculate the pricing the market can withstand.

The service has made more efficient use of the field sales team, who are now able to focus on the bigger players while MM Group handles the smaller outlets.

One of MM Group's main strengths is the quality of customer service it provides for high-profile public helpline contracts. It handles as many as 21,000 calls in a single day for the UK Passport Service and up to 30,000 daily for flood information service Floodline.

Both operations won praise this year from the National Audit Office, parliament's scrutiniser of public spending, for providing effective service and value for money.

MM Group runs the government's foreign advice travel line, which this year was tested to the full. "As brilliant as the technology is in our industry, it will always be the human element that makes it work," says Smith. "We are extremely proud of the rapid reaction to the need for service agents caused by the Iraq war and the SARS epidemic."

This inbound expertise is also in evidence with private contracts. MM Group has been running a 250-strong customer service team for Sainsbury's to You, the home shopping service, handling more than 20,000 calls a week and resolving in excess of 80% of queries at the time of the call.

Recently, it added a seasonal promotional service, enabling shoppers to pre-order turkeys and send flowers, chocolates and drink as gifts.

The company will be handling thousands of calls each day in the run-up to Christmas.

From January, the agency will start a three-year government contract, handling responses for a DRTV and press campaign for the NHS.

Robert McLuhan contributes to Marketing on the telemarketing and field marketing sectors. robert@mcluhan.worldonline.co.uk.

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