For someone who entered the ATM business by accident, Phil Rock has been pretty good at it.
The founder and chief executive of the ATM Network has built his company into a business with 2,000 machines under contract and $10 million in annual sales. The feat is even more impressive considering his company is headquartered in Minnesota, home of super ISO Access Cash.
Rock, 37, made his first sale in 1994 while working for younger brother Jeff Jetton, one of the founders of Card Capture Services (CCS), the Portland, Ore.-based ISO that was sold to E*Trade Financial Group in 2000.
At that time, Rock said, ATMs were a sideline for Jetton, who was more focused on credit card processing and other business ventures. Jetton had hired Rock as a site locator and promoter for a product called GoFax, a combination fax machine/credit card terminal.
Selling in Seattle
While Rock was calling on a Seattle c-store, the proprietor began reminiscing about a busy ATM at a 7-Eleven store where he had been previously employed. Rock remembered he was carrying some brochures for Tidel ATMs, fetched one from his car and sold the man on the spot.
“I didn’t even know how to fill out the application. I called Jeff and said, ‘Jeff, I just sold one of those funny-looking machines.’ He faxed me an application and walked me through how to fill it out,” Rock said.
Until then, the California native, who had studied visual merchandising for three years at the FIDM in Los Angeles, never considered himself a salesman. He had aspirations of being a museum curator or gallery owner. Previously, he spent three years as a consultant for Southwest Trading Company, advising purchasers of Native American artifacts on how to display them in their homes.
“Once he got a taste of (ATM sales), we couldn’t stop him,” said Jetton, who now heads a start-up called AuctionPay in Portland. “He was our number-one salesman from the very first month he started selling.”
Rock’s work ethic, energy and “ability to get up and go” separated him from other sales reps, Jetton said, noting Rock thought nothing of driving from one end of Oregon to the other in a single day to make a sales call.
The Pacific Northwest was especially tough, Rock said, because his competitors included Dan Pina, an accomplished salesman who went on to start the successful Evergreen Teller Services, and others.
From 1994-96, Rock honed his sales pitch at CCS, stressing the non-surcharge related benefits of owning an ATM. He still stresses that approach today in his sales training sessions at ATM Network — even though convenience fees are now a widely accepted practice.
“The surcharge should be the third, fourth or even fifth thing on the list,” he said. “You have to show (merchants) that the intangible benefits may be more valuable than the tangibles. I’d get them to agree that they wanted to put more money in their customers’ hands, then ask them if they could hire someone to stand in their store and hand out $20 bills for just $269 a month (then a common monthly lease payment).”
Going it Alone
In 1996, Rock struck out on his own. Rather than enter an untapped ATM market, he settled on Minnesota, the same state where Access Cash was based.
“I was the top salesman at CCS, which was the number one ATM company at the time, so it didn’t seem unrealistic to take on Access Cash, which was the number two company,” Rock said. “I felt like a Green Beret.”
It was a big adjustment for a California kid, he said. “I surfed, skateboarded and did everything California kids do while growing up. It was rough going from the Pacific Ocean and sunshine 365 days a year to Minnesota.”
The former top amateur skateboarder did his best to cope, even hiring a company to construct a half-pipe in his backyard where he teaches his 9-year-old son tricks. Rock said he’s also involved with a group building a 40,000-square-foot indoor skateboarding park in the Minneapolis area.
Even tougher was taking on Access Cash. “I probably would have had double or triple the number of machines I have now if I had gone anywhere else,” said Rock, who sold his first 500 ATMs out of the basement of his home.
Rock’s ATM Network now runs neck-and-neck with Access Cash in its home state, both with about 1,000 machines there. He’s won the endorsements of several key state trade groups, including the Minnesota Grocers Association and Minnesota Bowling Proprietors Associations. Other endorsements include the National Licensed Beverage Association and Bowling Proprietors Association of America.
Joe Campo, the owner of South Lyndale Liquors and a board member of the Federation of Wine, Beer and Spirits Retailers of Minnesota, remembered his first impression of Rock when he was giving a presentation to his former trade group, the Minnesota Licensed Beverage Association.
“I always like to be associated with a winner, and Rock was obviously going to be a winner,” Campo said. “He’s that smart and that dynamic.”
In addition to giving Rock his vote for the endorsement, Campo bought Rock’s first ATM. He’s never been disappointed in its performance, he said, despite the presence of a bank-owned machine next door. Rock “always gives more than he promises,” Campo said. “If he says he’s going to give you $5, it comes out to about $7.”
Campo said he and Rock have become friends, and share a passion for sushi dinners. Maybe Rock was just glad to find someone in Minnesota who liked sushi, Campo joked.
Despite the current industry trend for acquisitions – best exemplified by eFunds’purchase of Access Cash and three other ISOs in just two years – Rock is optimistic about future organic growth prospects for his company.
“We’re going to do it the way we’ve always done it, by selling to merchants,” he said.