Editor's Note: This is an extended version of an article that ran in the November/December Automatic Merchandiser.
Carla Balakgie assumed the role of president and CEO of the National Automatic Merchandising Association (NAMA) this month, succeeding Richard Geerdes. She joins NAMA after serving eight-plus years as CEO of the Electronic Transactions Association (ETA), which serves the electronic payments industry. Automatic Merchandiser recently interviewed Balakgie about her hopes and plans for NAMA. Following are excerpts.
What about this association and this industry motivated you to accept this executive position?
When I first began learning about the NAMA opportunity, what struck me most were the similarities between it and the trade group I then served, The Electronic Transactions Association (ETA). There are many parallels within their constituencies; both groups represent supply chain industries that include product suppliers, delivery, and sales distribution functions. In some cases members of ETA also are members of NAMA. Over the course of the interview process, which included the good fortune of being able to attend a portion of the 2011 OneShow, I discovered that both associations share like cultures, and more important, the nature of the individuals in the community is similar too. I felt a strong connection with NAMA from the outset.
It’s also interesting to note that both industries are primarily based on ‘away from home’ experiences, and that one of the keys to making each of them successful lies in ensuring the ease of the transaction. In my role at ETA, we’ve been focused for years on driving the growth of electronic payments in every retail sector. Part of the opportunity I saw with NAMA is the enormous potential that electronic payments and emerging technologies offer for expanding the unattended retailing channel. The convergence of new devices with consumer demands, particularly from a generation that is embracing and in some cases defining them, is enormous and exciting. Yes it can be a challenge; all growth requires investment and risk. But I’ve seen first-hand the power and value of the electronic payment system not just as many people understand it today, but also what lies beyond cash and credit/debit with regard to new transaction opportunities. The tools that are emerging to anticipate, track, incent and compel commerce are powerful and game changing. If NAMA members can learn how to harness these assets—loyalty programs, couponing, virtual wallets, and mobile devices to name but a few—they will be well positioned to profit from the changes that lie ahead. Ultimately that is my job as the new leader of NAMA—to help members anticipate and execute on business opportunities that are of value today, and tomorrow, so they can grow their businesses.
On the personal side, the position with NAMA gives me the opportunity to diversify my skills as a professional which is especially exciting to me. I love the challenge of working with an older, more mature trade association where some elements are at a different business life stage, and having the chance to bring to bear my 27 years of association background to help push NAMA toward its next level of achievement. And of course I wouldn’t have taken the position if I didn’t think I could be effective and deliver increased value to both the membership and the industry as a whole.
What about your past experience best prepares you for this role?
In addition to my general association management experience, I am able to engage on payments-related issues instantly, thanks to my 8½ year tenure at ETA. This is of acute importance to the vending industry given recent, adverse pricing changes associated with small ticket debit transactions. For example, although I haven’t yet officially assumed my position with NAMA, I’m already advocating on its behalf through my current relationships with payment networks like VISA/MasterCard, and financial institutions such as Bank of America with whom NAMA has an established partnership. From a broader perspective, because typically cashless systems increase vending revenues, my experience with the latest e-commerce technologies can help assure that NAMA members are aware of and understand which systems would work best for them and how to access them as well. And I can leverage those connections to increase interaction and growth for the association—in fact I’ve already recruited several new members for NAMA from the payments industry.
My prior work with the National Association of College and University Business Officers (NACUBO), which represents college and university administrators, included interaction with many companies and individuals in the food service industry. I look forward to renewing those relationships on behalf of NAMA as well.
I’ve also invested my entire career in association work, and so NAMA members can benefit from the considerable amount of time I’ve spent seeing what has worked – and what hasn’t – for other non-profit organizations. Finally, as a long-time, active member and volunteer leader of the American Society of Association Executives (ASAE), I bring to NAMA the collective “best practices” and professional network that can provide proven strategies for addressing similar challenges and opportunities to grow and prosper.
What are the key similarities AND differences between the ETA and NAMA?
In many ways the two organizations are very similar, as I’ve already mentioned. However, one of the bigger differences is that they are on opposite sides of the retail system. ETA represents the financial services side of the equation while the members of NAMA predominantly represent a merchant supply chain. But it is interesting to me that in many ways the members of the two organizations are inextricably linked because at the end of the day, ETA members’ primary business purpose is to serve merchants like those represented by NAMA. In other words, in my role with NAMA I will be serving my former customer’s customer.
What do you see as your greatest accomplishment at ETA?
When I look back on my tenure at ETA, I’m most proud of the work I did to lead the association through a critical developmental stage and position it to capably address the challenges of a rapidly changing [business and regulatory] environment. Electronic payments only have been a ubiquitous part of our lives for about 20 years and so represent a young, sometimes tumultuous industry. And so it was with ETA. Under my direction, ETA transitioned from a small company that outsourced its entire administrative and service functions into a premier organization, headquartered in Washington, and branded for its identity of professionalism, influence and excellence.
For example, ETA got its start through its annual meeting and trade show which was thriving when I joined the organization in 2003, and it is still the highest profile feature in its product portfolio. But ETA also has become a leading voice and advocate for the industry; by establishing a strong government and industry relations program, our members now benefit from significant levels of influence and protection from potentially harmful regulation. The organization also enjoys an independent and recognized relationship with all of the major payment card networks, and deepened, superior, and universally recognized education programs that deliver meaningful knowledge to its members, including a recently-launched professional credentialing program.
There are many examples of this evolution. But in essence, I’m exceptionally proud of helping ETA turn its vision into reality, leading the association through an important growth phase, and of a legacy that confirms that ETA has ‘arrived.’
What goals do you believe the NAMA board is most concerned about accomplishing?
I think the overarching objective is to lead a reinvigoration of the association and industry to assure continued growth in its two mission sectors–vending and coffee service. And while reaching for the new and different, I believe the board also is interested in preserving what is best about NAMA’s current mission, value and services. These priorities are manifest in the four key initiatives set out by the board in the current strategic plan.
With regard to vending, we should be riding the wave of growth associated with new retail technologies, emerging product channels, and the next generation of consumers which is the market segment that will make this growth a reality and instigate a renaissance for unattended retailing. A prime example of how NAMA’s leadership is striving to do this is the Industry Growth Strategy and specifically the recent Gratitude Tour. This activity was designed to boost awareness, generate excitement particularly among Gen Y consumers about the vending experience, and place more consumers in front of our members’ machines. By all reports the Gratitude Tour was a great success and step forward in that direction.
For coffee service, it involves exploiting opportunities associated with coffee, tea and water which still a largely untapped market—both for the industry and for NAMA—and one that is experiencing phenomenal growth. A tangible example of this is the recent ‘CoffeeTea&Water’ conference; I was fortunate to attend this event and witness first-hand the excitement and enthusiasm it generated within this segment of our membership. In the longer view, NAMA is convening a group of thought leaders in early December for a planning session dedicated to creating a more comprehensive strategy for this sector. And you can be sure that I will be actively participating to consider how we can translate the session’s conclusions into tangible and actionable tools for our members. One important outcome we anticipate is to conduct comprehensive market and consumer research to help us better understand all aspects of this emerging market and validate our intended actions on behalf of members.
Regarding NAMA’s established assets, there is emphasis on deepening and amplifying its Government Affairs program at the local, state and federal levels, and working relentlessly to protect our members from potentially harmful legislation. And of course ensuring a continued strong and powerful OneShow where members of our industry can see the latest technology, access great education, and enjoying a host of networking activities with industry partners is essential.
How do you approach leadership of a non-profit organization where the “member/customer” is also an owner?
The job of an association executive is to create a shared vision among the leadership of the organization on its desired future and then direct the strategy and delivery mechanisms that will ultimately transform the vision into reality. My approach is to foster that understanding among the board, staff and all participants in the NAMA community of practice, creating consensus on where we need to go and organizing the necessary resources to execute the programs and services that will deliver results. In any organization, sustained and measurable success is achieved by many individuals executing with excellence on the same vision. It’s my responsibility to be the diviner, apostle, standard bearer, and driver of the vision.
What do you see as the core mission of NAMA and what do you see as the “extras”?
The core mission of NAMA mirrors that of any association – to advocate for members; to deliver quality educational resources; to disseminate relevant, timely information and knowledge; and to provide networking opportunities and a forum for business. For NAMA this translates into a robust OneShow; a vibrant advocacy program that includes government affairs, industry advocacy and public relations; all of the education delivered at its conferences; the superior professional development programs it provides, and the expanse of information outlets used to connect with members – from the website and magazine to the Keeping In Touch with NAMA e-mail series.
As noted previously, NAMA’s current strategic initiatives, including the Industry Growth Strategy and the plans for accelerating expansion of the coffee sector, are essential building blocks for the future because of the tremendous value and results they will deliver to members. Finally, it will be important for us to pinpoint new ways we can drive value within each of these mission pillars, working to help our members seize opportunities while also reducing or eliminating obstacles like regulations that make it more difficult for them to succeed. I cannot opine on what might be the “extras,” but anything that furthers NAMA’s mission and delivers high value to members and the association, is fundamental.
What are your short term goals as CEO? (100 days, or other similar period)
When entering an organization, I think it’s important for any new executive to use their ears and mouth in their allotted proportions. By that I mean it’s important to listen twice as much as one speaks. For the first 100 days, it will be most important for me to meet with our members and carefully listen to them about their experiences and how NAMA can better serve them. I’ll be listening to members at all levels of the industry -- CEOs, owners, managers and route drivers -- to make sure that I have a strong foundation and good understanding of all aspects of day-to-day operations. It also will be important for me to meet with other stakeholders important to NAMA, and learn as much as I can about the industry and their views of the association’s impact, image and value. This environmental analysis will allow me to rapidly build relationships and also to test assumptions, refine strategies and develop a plan for leading the association over the coming months and years. Given the pace at which business moves today, I am also a leader who understands one must plan and act simultaneously. So during the first 100 days I will be working hard to ensure that we once again deliver an overwhelmingly successful OneShow that the industry has come to expect from NAMA. I’ll be guiding development of phase II of the Industry Growth Strategy and the resources to ensure its proper execution, and helping to create the strategy for expansion of the coffee service sector. Finally, I will be analyzing all aspects of the association to ensure the organizational structure matches our strategic priorities.
Do you have a sense of how the mobile payments industry views the vending industry? I.e., How aware is the mobile payments industry of vending, and do they see vending as important to mobile payments?
The mobile payments industry is quite aware of the vending space and I believe sees it as a growth channel because they understand that unattended retailing in all of its manifestations is ripe for expansion. Industries like vending, where the ‘friction is low’ with regard to the customer experience as well as the ease and speed of the sales transaction, are of particular interest to mobile and alternative payment providers. Companies like PayPal who figured out the profit and risk models on small ticket person-to-person [P2P] transactions are making a big push into the physical point of sale and are looking to extrapolate that success with merchants of all sizes and types. In the new world order of mobile and alternative payments, the very definition of ‘what is a merchant’ is changing and therefore opening and making viable whole new sectors for electronic commerce. Unattended retail is one of them and NAMA members stand to benefit from it. In fact, at a recent mobile payments summit I attended, several participants expressed to me interest in joining NAMA, an obvious demonstration of their understanding and appreciation of our industry.
The Durbin amendment caps on transaction fees caused many to question the future of cashless vending. Do you have any idea whether or not the banks and card associations will adjust their fees for small ticket transactions?
I believe that banks and payment card networks recognize the importance to their organizations of small ticket transactions like those in our industry, as well as the future promise of these revenue streams as unattended retailing continues to grow. These institutions have worked for years to increase acceptance of electronic payments by consumers and merchants and so probably are not interested in stymieing growth in any channel. Unfortunately the current electronic payments system is a complex, interrelated network (including issuing v. acquiring functions and different payment types like credit, debit, prepaid, etc.) and is under enormous pressure from many sides and competing interests. Adjustments to one aspect of the ecosystem such as the recent debit rate caps can inevitably create a reaction in another area. The impact of these changes on the vending industry is highly adverse, untenable and likely an unintended consequence of the much bigger, more complex issues noted above. Regardless, NAMA has and will continue to advocate for immediate and longer term relief, as well as incentives to promote the adoption of all forms of electronic payments for our market. Our members can be sure that I will be drawing upon all of my expertise and contacts and working relentlessly to achieve a positive outcome as soon as possible. And because it is in their best interest, I believe that the financial institutions and payment networks will find a way to make that a reality.
Attracting and retaining members has been a challenge for NAMA. Do you have any ideas on ways to attract and retain members?
As any established organization works to address issues like industry consolidation that can erode its customer base, it is important to ensure that the value proposition for the remaining constituents remains strong and able to sustain every bit possible of the existing foundation. If NAMA is experiencing such attrition trends, then validating, refining, and promoting the benefits it delivers would be a prime area of attention in terms of improving member retention. With regard to recruitment, every business must consistently open the frontier to new channels. This requires making sure the association is going where the market is growing so that it is riding that wave and growing too. For NAMA, that could mean taking a fresh look at how we describe our industry, and adapting to create a community that is inviting and valuable to new participants. For example over the past several years, technology has exploded with applications like unattended machines that deliver DVDs, iPods and even cosmetics; this may or may not be a growth vector for NAMA, but the discipline to assess such opportunities and offer the right benefits to attract participants who are part of our desired future is essential. New or existing, the most important thing in creating ‘sticky members,’ is to constantly drive up their return on investment. So we must search diligently and endlessly for new ways to add value for both the vending and coffee hemispheres of NAMA to ultimately ensure our member companies grow and prosper.