PartnerUp is already paying off

Deluxe Corp. intends to take the art of online "social networking" to a whole new level by casting its recently acquired PartnerUp website to a throng of 6 million small business owners.

Think Google and Facebook rolled into one website that's reserved for small business owners on the prowl for information, contacts and products and you get the idea behind PartnerUp, a free website that allows business members to network easily (www.partnerup.com).

Deluxe, with $1.49 billion in annual sales, bought the tiny operation in July and has big plans.

With cross-selling efforts, the website is already winning four times the number of new members it did five months ago. The medium is considered so powerful that officials expect it to slash Deluxe's small business research costs by $1 million a year. Over time, Deluxe thinks that the site can generate up to $100 million in product sales and advertising revenue.

The online networking tool is designed to help small and new business owners query each other, solve problems and find accountants, lawyers and other business specialists, said Steve Nielsen, who founded the company four years ago and sold it to Deluxe in April for an undisclosed price.

"We are bringing pure-play digital revenue to Deluxe. That is something that Deluxe has not had," Nielsen said.

PartnerUp links and advertises with Google.com, Yahoo.com, Live.com, and sites that cater to small businesses such as VentureBeat.com, Mashable.com, AllBusiness.com, and shopDeluxe.com.

The small business focus fits in well with Deluxe's new direction. The beleaguered check-printing firm is transforming itself into a business services company after suffering years with banks that demanded cheaper pricing and consumers who increasingly switched from paper checks to debit and credit cards.

Through several acquisitions, Deluxe has morphed into small business services and now offers logos, business cards and forms, stationery and lots of other products designed to simplify the life of entrepreneurs. Today, it's betting on the fast-paced digital age and cross-selling opportunities to pump up sales. The help can't come soon enough.

Last month Deluxe posted third- quarter earnings that fell 57 percent to $13.8 million including restructuring and unexpected pretax impairment charges on certain assets.

Social media strategist and marketing consultant Graeme Thickins, of GT&A Strategic Marketing Inc. in Bloomington, said PartnerUp is just what Deluxe needs.

"I think they bring a real interesting dynamic to an old established company that is very much in need of finding new direction and new growth markets. I find it a fascinating combination of new talents," Thickins said.

PartnerUp is already paying off, said Deluxe Chief Marketing Officer Laura Radewald. Deluxe spends millions of dollars on marketing research, focus groups, surveys and other tools that help take the pulse and sniff out the needs of small businesses. Instead of waiting weeks or months for tabulators to tally survey results, PatnerUp provides customer feedback in seconds, she said.

As a result, "We are saving as much as we are spending on customer research and focus groups. It all helps us understand the small business customer base better. We can instantly poll and test product ideas with them," she said.

Going digital is on track to save at least $1 million annually, Radewald said. The digital relationships PartnerUp forms are expected to transfer into Deluxe's other businesses, which provide checks, identity theft protection, fraud protection services and customized business products and forms.

Deluxe also plans to license and customize software for financial institutions looking to tap its Part-nerUp small business members. Licensing fees typically can range from $10,000 to $20,000 a month, officials said.

Potential cost savings and revenue gains should help over time.

"Although our revenue outlook for the year has come down, we remain roughly on track to deliver our previous earnings per share outlook excluding the additional restructuring and impairment charges," CEO Lee Schram told investors last month.

The company expects full-year revenues of $1.49 billion to $1.505 billion. Including restructuring charges, earnings per share should be $2.07 to $2.17, which is down from the previous forecast of $2.52 to $2.62 per share.

Dee DePass • 612-673-7725