he phrase "work smarter, not harder" comes to mind when talking about CoreXpand, a company that provides online business-to-business (B2B) solutions to streamline supply channels. "Our company's vision is to help our customers be more effective at producing results with minimal effort," said Les Cowie, Executive Vice President of the six-year-old company.

As with any worthwhile business solution, CoreXpand's goal is to reduce costs while increasing revenue. The company does this by developing products that simplify business operations and increase brand loyalty.

Some would label CoreXpand a small company since it employs only a dozen people. However, when you consider that it serves the global market and reports annual transaction volume of more than $539 million, you understand that CoreXpand plays in the big leagues.

The company's growth has been rapid. In 2000, CoreXpand processed more than $1 million in transactions. At the end of 2004 that number had grown to $539 million. Currently more than 2,000 organizations use CoreXpand's programs, including Ameritrade, Blue Cross/Blue Shield, BP, Kraft Foods, Monster, Siemens and Wells Fargo & Co.

Driving Toward Success

One of CoreXpand's solutions that might be of special interest to readers of The Green Sheet is the Channel DRIVER system. The system, designed to consolidate supply channels and expand brand loyalty, is the brainchild of CoreXpand President and Chief Executive Officer, Lindsey Tanner.

About 13 years ago, Tanner began developing paperless ordering and tracking systems for enterprises with complex ordering and distribution needs, such as The Coca-Cola Co. The resulting product is Channel DRIVER, which streamlines sales and marketing programs.

Recently CoreXpand added a feature in which small- and medium-sized businesses can join together in "buying groups" to reduce the costs of materials and supplies and thus compete with larger enterprises.

"With Channel DRIVER, manufacturers, distributors, franchises, even banks, can compete aggressively with the 'big guys' at lower costs," Tanner said.

What makes this company unique is the fact that it provides a customized solution at an affordable price. "Most of our competitors develop custom designed e-commerce solutions for their clients at high cost," Tanner said.

"It is very expensive to then create multiple sites for different customers or market requirements. CoreXpand has an easy-to-use, low-cost way of doing the same thing, while at the same time building new sales channels, improving existing ones and saving on the cost of business supplies."

CoreXpand further differentiates itself because it does not require a long-term commitment nor does it charge a cancellation fee. Even though Channel DRIVER is low cost, it is still robust yet easy to set up, use and understand.

The system requires no special IT involvement, and it doesn't disrupt current computer systems. CoreXpand even offers free trials, provides Web and phone support, and monitors all systems 24/7.

Putting ISOs/MLSs in the Driver's Seat

CoreXpand currently provides the Channel DRIVER solution to ISOs and referral banks for merchant level salespeople (MLSs) to use and resell. "The income potential for MLSs is excellent, with many opportunities to greatly increase present income," Cowie said.

Paymentech LP is the first acquirer considering offering the Channel DRIVER system to its ISO, agent and referral bank partners. CoreXpand is also interested in working with other ISOs. ISOs can use CoreXpand and the Channel DRIVER system to:

1. Profit from increased transactions
2. Earn commissions from leads
3. Motivate a sales force with reward programs
4. Save money by spending less on supplies
5. Become a CoreXpand customer and create an affordable Web presence

1. Profit From Increased Transactions

ISOs/MLSs can benefit by using Channel DRIVER to secure incremental transactions from multi-location merchants. ISOs/MLSs and banks sell CoreXpand's B2B systems to help customers better display their products, provide sales incentives and process orders electronically.

"Channel DRIVER gives ISOs, banks and MLSs an easy-to-sell, add-on offering that generates recurring residuals," Cowie said.

2. Earn Commissions From Leads

Secondly, ISOs can offer Channel DRIVER to new and existing MLSs and earn commissions on the monthly Channel DRIVER usage fee. "It's a tool to help ISOs bring referrals to reps," Cowie said.

Examples of industries that would benefit from Channel DRIVER include manufacturers, distributors, and trade and professional associations.

While other companies might pay residuals for the life of the account, they require more effort. With CoreXpand, an ISO simply introduces the potential customer to CoreXpand. That's all that's required.

CoreXpand follows up with conference calls and Web-based demos. If the lead becomes a customer, CoreXpand pays the ISO a residual commission based on the monthly fees received for the e-commerce sites for the first two years of the life of the account.

A simple introduction could prove to be quite lucrative, since customers pay a monthly fee of $250 - $1,000 to use the software and servers. CoreXpand handles the setup, training and support. The ISO provides only the introduction.

3. Motivate Sales Force With Reward Programs

Since Channel DRIVER includes a Points Management program, ISOs can use it as an internal tool to manage reward programs for their MLSs. ISOs can boost sales performance and motivate employees by awarding points for achievement and allowing them to be redeemed for rewards.

Another approach is to reward current MLS customers for providing names of friends and business associates as referrals. The agent earns points for providing the name and then earns generous points when the name turns into a money-generating account.

This Points Management program is different from other incentive programs in that reps choose their reward and when to "cash in" their points. Agents log on to the online catalog of rewards, and the system displays the appropriate information for that agent and ISO.

MLSs choose what product they want or if they prefer to wait to accumulate more points before receiving an award. When they do choose their rewards they simply order the item directly from the rewards Web site.

CoreXpand ships the products directly to them; it also calculates exact shipping fees and taxes at the time of the order and deducts them from their rewards points balance. The company sends ISOs receipts to reconcile against MLSs' rewards points balances.

This system also saves ISOs money in two ways. First, they pay less for the product because they pay a pre-negotiated CoreXpand discount, generally 15% - 25% less than retail prices.

Second, they do not have to purchase the product ahead of time so they do not incur inventory, shipping or warehouse costs.

Another benefit is that providers can customize the rewards points and program to suit their needs. For example, they can double point values during special promotions. They also choose which products are featured in the rewards catalog. They have the freedom to include their customers' products or those of any local businesses that they wish to support.

Finally, MLSs are more inclined to maintain their relationships with ISOs because if they move to another ISO they will forfeit their rewards balances.

4. Save Money by Spending Less on Supplies

ISOs save on supply costs by using the CoreXpand Web site to order supplies. CoreXpand has developed electronic databases that contain typical business supplies provided by leading manufacturers and wholesalers.

CoreXpand connects ISOs with these companies, and ISOs can take advantage of previously negotiated prices that are 15% - 25% less than what they currently pay.

5. Become a CoreXpand Customer and Create an Affordable Web Presence

Not only do ISOs/MLSs serve as CoreXpand representatives and provide leads to the company, they also benefit by becoming customers. As customers, ISOs/MLSs establish their own customized e-commerce Web sites to sell equipment and supplies.

Through the site they increase their exposure and thus sell more equipment. The program also includes broadcast e-mails with helpful hints and tips.

CoreXpand believes businesses are turning to lower cost Internet-based systems for B2B transaction processing rather than investing in expanding high cost internal legacy systems.

The company also believes that Channel DRIVER will open new market opportunities for ISOs/MLSs. "It's all about the relevancy of a given customer," Tanner said.

Since savings are typically converted into programs for increasing revenue and brand loyalty, ISOs/MLSs who help customers work smarter to reduce costs and paperwork, while increasing sales and motivating staff, will be the ones to expand their earning potential.