Jeff Lenardson and Cole Bevel think they've figured a way to separate their Reno-based MerchantsXL LLC from the rest of an often-indistinguishable pack of competitors.
And it's a strategy that makes them feel pretty good about what they're able to provide for the community as well.
Their strategy: Give 15 percent of the gross profit generated by MerchantsXL to nonprofits designated by the retailers, restaurants and professional offices that use MerchantsXL to process credit-card payments.
On one hand, it takes a 15 percent bite out of MerchantXL's revenues before the company makes payroll for its four-person staff or pays the rent on its offices in South Meadows.
But on the other hand, Lenardson says, it's a potentially powerful investment in marketing for the firm that was launched in 2010.
MerchantsXL, like other credit-card processors, markets services provided by a handful of big national outfits that provide back-office services. MerchantsXL, for instance, markets the services of First Data Corp. of Atlanta.
Largely viewed by its retail and professional customers as a commodity service, card processors don't have much room to raise prices.
Because much of the cost of the card-processing business comes at the front end marketing and setting up a new client MerchantsXL works hard to retain customers so that it can spread those costs over months and years of an ongoing relationship.
Like others in the business, MerchantsXL emphasizes customer service both Bevel and Lenardson field calls on nights and weekends from customers who need help but great service is a common refrain in the business.
The partnership with nonprofits, a program the firm dubbed "Give Back to Reno," helps to differentiate the firm.
With the program, a client of MerchantsXL designates a charity which the client wants to receive 15 percent of the gross profit from its card-processing fees.
About a dozen nonprofits currently participate. They range from Artown to the Sky Tavern Junior Ski Program to The Chamber.
MerchantsXL checks to ensure that participating nonprofits have federal nonprofit status, but makes no other judgments about them.
Participating nonprofits, Lenardson says, then have a reason to encourage their supporters to use their credit cards at the businesses that use MerchantsXL services.
And because the boards of directors of nonprofits in the region often include business owners and professionals, Lenardson says the program helps open the door to potential new clients.
The Junior League, one of the nonprofits that participates, cites the charitable giving program as one of the reasons it selected MerchantsXL to provide card-processing services at the Junior League's Arlington Gardens Mall and Country Mall Restaurant.
"It was a plus for us that they give back to the community," says Mary Yount, who helped negotiate for the Junior League as the group's treasurer.
Two nonprofits Sustainable Tahoe and Northern Nevada Children's Cancer Foundation have taken their relationship with MerchantsXL one notch higher.
They actively promote MerchantsXL, getting a commission on new merchant-service contracts they generate for the company as well as a higher level of exposure on the company's marketing materials.
The company hasn't raised its fees to support the new program. Given the competition, it can't.
"In a nutshell, the only ones that it hurts is us," says Bevel.
The program was developed by NPcatalyst, a Reno consulting firm that helps build relationships between businesses and philanthropic organizations.
About 70 percent of MerchantsXL's business comes from northern Nevada, but Bevel says the concept can be transported to other markets as the company widens its geographic reach.
For all the program's potential strengths as a marketing tool, Lenardson and Bevel says their primary motivation has been to do something good for the community by helping nonprofits generate a reliable stream of monthly income.
"We believe this is a vehicle and an opportunity for us to give back," says Lenardson.
