Melita International - Their Story Through Bloomberg's Eyes

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Aleksander Szlam hates it when his family's dinner is interrupted by telemarketers. That, says Melita International Inc.'s CEO, is why he invented software that tells callers when to get in touch with customers and the best way to do it. 

Melita's software using proprietary 'Customer Sensitivity' profiles calls customers at a preferred time and number prepares a letter, or even sends an E-mail message. "We've been working overtime to give the customer the upper hand," Szlam says.

Of course, for some weary consumers, no call is a good call. But the success of Melita's new Magellan software is indisputable. 

Telemarketers clamor for the product, which helps them target calls--and reduces hang-ups. 

The payoff for Melita: average annual earnings growth of 58.2% over the past three years and a high 49.8% return on invested capital, which landed the Norcross (Ga.) company the No.26 spot on the Hot Growth list.

Melita is riding a surge in demand for telemarketing services--and hardware and software for them. Szlam, 46, has over 40 patents covering most of the technology found in call centers. 

His specialty: "outbound" systems that continuously dial from a list of numbers, feeding calls to telemarketing agents, and managing the calls' pace.

 His new Magellan software takes telemarketing a step further. 

It is based on consumer profiles packed with information the company buys from other databases. Much of the data comes from customers through surveys. 

When called for the first time, they are asked questions such as when it is most convenient to talk, or what language they prefer. Magellan then matches customers with telemarketers. Calls to Spanish-language customers, for example, are automatically routed to Spanish-speaking operators.

An energetic executive who often dons brightly colored suits, Szlam emigrated from Poland at 19. 

He took up with a pop band and became interested in musical electronics. 

With encouragement from professors at the Georgia Institute of Technology, he majored in electrical engineering. On graduation, 

Szlam went to work designing communications networks and software. 

By the late 1970s, he was an engineer at Lockheed Corp., but he knew he wanted to set out on his own. Toiling nights and weekends in his garage, he designed one of the first multi-line automatic dialing systems.

Szlam and his brother-in-law Ben Feldgajer formed the company (Melita Electronic Labs, Inc.) in 1979. 

The company sold early versions to schools, which used the technology to track down truants' parents. The technology is now in 600 telecom systems, mostly with retail and credit-card companies that use them to track and collect delinquent accounts. 

Today, though, Melita's new direct-marketing software provides most of the growth.

Industry analysts applaud a distribution agreement Melita recently signed to have Williams Communications Solutions, a $1.5 billion equipment provider, sell Melita products. 

"Melita has a good combination of advanced software solutions and strong distribution partners," says Donald H. Newman of Ladenburg Thalmann & Co. in New York. 

"He sees revenues jumping a further 32% this year."

Meanwhile, Szlam is working on software to assemble multiple call centers with hundreds of phone lines to create one huge virtual center. 

Then, telemarketers could work from home. Szlam may never make telemarketers lovable. But for his company, the quest so far has been lucrative.