After Whitlock executive VP Julian Phillips told me, “We’re going to acquire AVI-SPL,” there was a well-timed dramatic pause followed by: “… one customer at a time. That’s basically our acquisition strategy.”
I assume he’s uttered the provocative line before, probably to other reporters. It’s savvy, because it’s almost like he acknowledged a clickbait culture and commandeered it to hammer home a point. He even added, “You can quote me on that.”
The point Phillips hammers home is that Whitlock, while it may not be grabbing as many headlines as AVI-SPL and Diversified — both with dramatic acquisition and expansion news over the past couple of years, the latter of which managed to leapfrog Whitlock and become the AV integration market’s second largest firm behind AVI-SPL when it acquired Technical Innovation in February 2016 – is extremely committed to its own preferred method of growth.
Whitlock is focused on investing in customer relationships as a means of growth, according to Phillips. “I would rather put my money into investing in customer relationships than investing in other companies.”
His words were reflected by the backdrop of our conversation – an open house and networking session at Whitlock’s new Boston area office in Burlington, Mass. As Philips and New England regional director Simon Davis explained, Whitlock’s focus on the Boston market is in sync with its overall growth strategy.
Whitlock’s Calculated Approach to Customer Relationships
“We’re not a territory organization,” Phillips said. Indeed, the open house at Whitlock’s new Boston area office doesn’t indicate an expansion into a territory. The nearly $300 million revenue integration firm has had what Phillips calls “a touchdown office” in Boston’s waterfront area for five years.
Over that time it has developed customer relationships. The investment in a new Boston area office (which actually opened a year ago) with a local 40-employee staff stems from how Whitlock has measured the potential value of those customer relationships.
“Others prefer to buy other companies and scrunch them together. We’ll see how that works out,” says Julian Phillips, Whitlock.
“In Boston we have this dense population, churning out students, a wealth of higher education feeding this market place,” Davis said. “Companies are [benefiting from] that. We see a massive marketplace here.”
It’s not just that Boston is well-known for its higher education institutions, world-leading hospitals, fertile biotech growth and elite technology companies. Those would be reasons why an integration firm might pursue Boston. Whitlock isn’t pursuing a territory; it’s investing in a growth opportunity.
“Boston is part of our overall strategy,” Phillips said. Having been around for 60 years, Whitlock has demonstrated that it knows how to excel in a transaction-based integration market. “But trends have moved us toward an experience economy,” he added. “We’ve realized that we need to take more of a relationship approach.”
As such, Whitlock is focused on “measuring” relationships, Phillips said. “When you take a long-term view based on a customer relationship you have to measure over a 5 or 10 year period. If you can measure it, you can have more success.”
He contends that not many integration firms pay attention to the profit relationship with their customers over long periods of time. Instead, they’re more likely to make decisions based on keeping the revenue going over the short-term. That mindset, however, leads to short-sighted decision-making.
“We are focused on long-term profitability,” Phillips said, adding that, sometimes, that might require lower profitability in the short term.
The commitment to the Boston market is the result of having measured the potential for long-term success based on Whitlock’s experience with customers in the Boston area. To pursue that growth, “We need to have a stronger presence in Boston,” Phillips said, adding that the 40 employees Whitlock boasts in its Burlington office equals a larger staff than many Boston area-based integration firms.
Whitlock recently tapped Davis, an industry veteran bringing experience at HB Communication, to lead the local effort.
In essence, that type of investment in opportunities with a highly analyzed customer base is Whitlock’s answer to other integration firms’ acquisition strategies. It’s fair to speculate that Whitlock sees those acquisition strategies as short-term versus its own long-term, sustainable approach to growth.
“There has been lots of speculation with Diversified going on the acquisition trail on what Whitlock will acquire,” Phillips said, before delivering his “we’re going to acquire AVI-SPL” line and emphasizing that Whitlock is investing in customer relationships, not companies.
“Others prefer to buy other companies and scrunch them together. We’ll see how that works out.”
Learn more about Whitlock on the company’s website.