iTrade Pay

Barter Business Keeps Its Clients Happy

Georgann Yara, Special for the ABG |
Date: December 3, 2015, 3:45 p.m. MST

An old-school method of doing business is gaining popularity by putting more dollars in companies’ pockets.

Phoenix-based Value Card Alliance has become a reigning force in this territory as the largest privately owned barter company in the nation among 5,000 competitors. Here, business owners that need services or goods trade their own goods and services for what they need. Value Card acts as a networker that brings them together, facilitating a symbiotic relationship and acting as a no-cash bank where clients earn trade dollars in their accounts for services or products they grant to others.

These dollars can be spent on goods and services, professional and personal. These include staples like toner and ink or pricier vehicle wraps for company cars. Advertising is Value Card’s largest category, said CEO Christie Acevedo, with nearly $1 million worth a month, making it the most valuable commodity.

“Whether it’s a one-man landscaper or Harkins Theatres or anyone in between, most companies want some form of advertising,” Acevedo said.

The International Reciprocal Trade Association estimates that more than 470,000 companies in the U.S. actively participate in barter, totaling $12 billion in annual sales. More than 65 percent of corporations listed in the New York Stock Exchange presently use barter to reduce surplus inventory, bolster sales and ensure that production facilities run at near capacity.

The barter system allows businesses to cover expenses and conserve cash for bills and items that cannot be gained via trade, Acevedo said. It gives business owners the opportunity to give employees or top clients perks such as spa days or travel-related items that may not be affordable otherwise. With more than 250 health-care providers, many of Value Card Alliance’s clients are able to trade for these services, too.

Each of the company’s 3,200 metro Phoenix clients has a personal broker working with him or her to manage their accounts and to help them get what they want using trade. There are 36,000 worldwide members, ranging from cleaning services and office supply shops to five-star Fijian resorts and private jets.

A dedicated travel department operates out of an office in Pennsylvania to connect members with 10,000 accommodations around the globe.

Diversity is what keeps clients happy and attracts new ones.

“We try to have the same mix you would have in a phone book. There are very few things we don’t offer,” Acevedo said.

Founded in 2004 by Brian Beal, Value Card Alliance generated $45,000 in revenue in its first year, said Acevedo, who joined Beal in 2008. In 2013, the company generated $7.2 million in revenue. About $300,000 in trade dollars is donated to charities each year.

More than 40 percent of membership comes from referrals. Most barter companies charge an enrollment fee. Value Card Alliance eliminated it in 2009, when its growth spurt hit. A 10 percent transaction fee on purchases is what generates revenue. There is no contract, either.

“If we do our job… we don’t need a contract for them to stay in,” Acevedo said. “If someone doesn’t want to stay, we missed the boat somewhere.”

About 98 percent of clients experience new business that they would not have otherwise received within 24 hours of joining Value Card, Acevedo said.

Networking, supporting and trading with fellow small local businesses has been a benefit for Megan Spencer’s Tempe-based businesses, Spencer 4 Hire Roofing and Jab Fitness. An annual silent auction for Value Card members that donates the proceeds to charity is among the events that Spencer and her family, with whom she co-owns both businesses, enjoy.

“We’re a referral-based business, so often we make a contact through VCA that leads us to other customers. It definitely exposes our businesses’ names to a lot more than trade people,” Spencer said.

Once, a dentist Spencer was using left the group. Her broker sought out another dentist who was willing to participate in the program. Customer service like this is a reason Spencer has been a Value Card client for more than five years.

“You communicate with them about what you need and they will beat the bushes to find what you’re looking for. They’re amazing,” Spencer said.

Scottsdale cosmetic surgeon Dr. Corwin Martin joined Value Card six years ago to connect with people who couldn’t afford to pay cash for plastic surgery. Since then, Martin has gotten to know fellow business owners within the trade membership and benefited from advertising opportunities that he wouldn’t have otherwise considered.

Many of his practice’s regular services and goods are gained through trade, ranging from light bulbs and pest control to janitorial and his security system. Corwin said the savings over the years has been significant.

“It’s all about saving cash when you can use barter. It’s helped us tremendously,” he said.

Acevedo’s decision to hit advertising was the key that sparked Value Card’s growth and set it apart from competitors. It attracted bigger clients and opened up their membership and the breadth of services.

Rewards are not only measured by bottom lines.

Acevedo talked about happy clients experiencing life-changing events because of their access to services they wouldn’t be able to afford. A local restaurant owner came into the office in tears, thrilled because she could finally afford much-needed dental surgery.

Less than two years ago, a prison guard who did hand-crafted shutters at his home joined Value Card. Through trade, he was able to grow his business, Acevedo said. Eventually, the success of his night job allowed him to quit his day one at the prison. Today, he runs his business from a 4,000-square foot workshop and has a staff of six.

“He said, ‘You’re the only reason my company ever took off. I wouldn’t have paid cash up front to pay for the ad,’” Acevedo recalled.

Boosting clientele is crucial, as is a dedicated staff focused on building it, Acevedo said. For the past three years, Value Card has met or exceeded its goal of gaining 40 new members each month, she said. The monthly average for barter companies is three.

“We meet daily to talk about customer service and new members. The focus is there,” Acevedo said. “At the end of the day, if we don’t bring in enough new members, we’d be like every other group.”