Article

ATMIA: Advice for IADs -- don't look back

To clear obstacles in 2012, ATM deployers must keep their eyes on the road ahead.

March 8, 2012 by Suzanne Cluckey — Owner, Suzanne Cluckey Communications

"Remember the 'good old days?'"

A glance around the Lone Star meeting room during a session at the ATMIA US 2012 conference confirmed that at least a few IADs in the session, "The Six Critical Challenges Facing ATM ISOs and Operators Today," did recall the young ATM industry's "wild West" days as invoked by co-presenter Frank Lunn, CEO of Kahuna ATM Solutions. Those were the days when any one of them might've walked away from a deal that didn't net a margin of at least $2,000.

"I'm not sure we can pinpoint when that was," Lunn said, "but probably the Paleozoic era somewhere between 2002 and 2006 … before the worries and the challenges came about that we face right now."

From this point on, all nostalgia was set aside as Lunn and Kahuna president Bryan Bauer presented their firm's research and analysis of a half-dozen issues faced by IADs and their study's proposed solutions.

Describing his company as "the ISO's ISO," Lunn said that at the outset of the research project, Kahuna decided to share its results with rest of the industry's IADs in order to create a broader understanding of current issues.

"Our goal today is to share some of what we've uncovered with this survey and with some of the statistics that we've found," said Lunn. "We're all businesses within this industry — within this ecostystem. We all have the same challenges that we share in common and we all have the same opportunities to grow and collaborate … I think you'll find that many of us, even competitors, find that we share a kinship and a commonality. We share more information. We're still competitors, but you know good competitors make a good industry."

Kicking off his part of the 30-minute presentation, Bauer explained how the Kahuna survey had spun out of a research project undertaken more than a year ago. The results of that study provided sufficient insight to make it worth repeating this year. To expand its sample size and scope, Kahuna and ATMIA have agreed to partner on the next survey, which will be conducted at the end of this year.

Encapsulating the results of the most recent survey, Bauer started by revealing the top concerns of IADs today. More than 65 percent of respondents said that their biggest worry was compliance mandates, with network changes a close second and ATM saturation a distant third.

Despite their concerns a whopping 67 percent of survey-takers said they expected to grow their businesses in 2012.

"Undoubtedly people are optimistic about their business and they know that … they are involved in a good industry," Bauer said.

Services and products survey expressed interest in exploring in 2012 included ATM branding, video toppers and advertising/media — all means of differentiating themselves in a competitive market.

Then Bauer got down to the Six Critical Challenges survey respondents saw ahead for their business:

1. Declining interchange/network regulations
2. Compliance issues (EMV, ADA, ATM shutdown, tracking, lawsuits, fee notices, etc.)
3. Staff/team issues
4. Competition issues
5. Liquidity/exit strategy/valuation issues
6. Declining profits (working harder to make less)

"We don't want to dwell on those," Bauer said. "What we want to look at is how to maximize and grow your ATM business despite the challenges. The reality is you're not dealing with anything your competitor isn't dealing with. So you can either choose to be a victim, or you can choose to do something about it."

"Something," according to Bauer comprised Six Survival Strategies that could help IADs course correct, if needed, and position their business for increasing growth and profitability:

1. leverage your knowledge and voice. Essentially, this means training, Bauer said. He quoted a study that found classroom training alone increased productivity 28 percent; the addition of one-on-one coaching increased it to 88 percent. "Training is something we don't have a lot of time for," Bauer said. "But it is important to provide proper training to your people, to your team. It's costly but necessary."
2. Leverage your negotiation power. "Coop-like relationships can help increase availability of resources," Bauer said. "There's a saying — I believe it was Chester Paris — you don't get what you deserve, you get what you negotiate. 
3. Maximize Industry Resources; and
4. Maximize industry opportunities. New vendors, new technology, access to vault cash, access to working capital, access to equipment capital —  "all of the stuff that many IADs struggle with today," Bauer said. The solution lay in finding good joint ventures and effective new ways to sell and market products and services, he said.
5. Commit to strategic leadership. "Now we're starting to get into some good stuff," Bauer said. "With strategic leadership, you look ahead, you analyze the present to prepare for the future … Good strategic leaders place focus on productivity. They understand their business strength and … weaknesses and they fill the gaps with outsourcing, with partnership programs. They don't hide from it; they don't bury their head in the sand."
6. Expand your influence and capabilities. "When you try to do everything on your own, you lose focus," Bauer said. "You'd rather be out selling, you'd rather be out talking to one of your clients than running due diligence or filing paperwork." Bauer said 89 percent of businesses that outsourced work said they received an ROI of more than 25 percent and that 34 percent had gained ideas transformed their business in a way that they felt had set them on the right path.

Wrapping up the session, Lunn told the audience, "Sometimes we think we're in the ATM business, but we're not. We're in the problem-solving business; the problem-solving business of how we help people get money when they need money … There will always be that consistency that somebody else has a challenge or a problem. How we solve that problem in the marketplace is the measure of our success."

A free download of the complete study, The Six Critical Challenges Facing ATM ISOs Today, is available at the Kahuna ATM Solutions website.

For more information on this topic, visit our trends/statistics research center. 

About Suzanne Cluckey

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Suzanne’s editorial career has spanned three decades and encompassed all B2B and B2C communications formats. Her award-winning work has appeared in trade and consumer media in the United States and internationally.