The

Entrepreneurial

Code

Lessons from an

Ivy League Entrepreneur

Chapter Thirty-Five

The office had a buzz of excitement, which lasted for about a day before an unexpected call came.  The agitated person on the line was from a university and the operator didn’t know how to handle the situation, so she knocked on Johnny’s office door.  He had trained his staff to answer product questions from students and parents, not from angry schools.  Therefore, he immediately offered to come out and speak to the caller. 

Johnny knew from his experience with the Bullfrog Card that angering a few Business Services people was inevitable with their marketing strategy.  Therefore, he was more concerned the call would weird out his staff.  He did his best to assure his people that they had to “break a few eggs to make an omelet.”  A bad reaction from a few schools was normal, because they were competing with the on-campus services of the universities.

As Johnny picked up the phone and identified himself, the administrator asked him to explain the program.  In as friendly of a manner as Johnny could muster, he described the College Card and why it was such an important collection of services for students.  The voice on the other end became indignant and demanded, “HOW COULD ANYONE OTHER THAN THE SCHOOL ISSUE A STUDENT ID CARD?!”

Apparently, the university administrator was calling because a student contacted the school inquiring about the College Card program and got transferred to the campus ID card office.  Unfortunately, this type of mix up occurred.  The call was then directed to the same Business Services department, which facilitated meal plan and bookstore purchases for students. The administrator asked the student to fax him a copy of the mailer.  After reading it, he called College Card in an outrage and chewed out the frazzled customer service representative before directing his frustrations at Johnny.     

Johnny tried citing the International College ID Card (ICIC) as an example of a private company that provided a student ID card.  Unfortunately, the administrator was no longer interested in anything Johnny had to say.  “WHAT THE HELL ARE YOU GUYS TRYING TO PULL HERE?  THESE ARE OUR STUDENTS!  YOU CAN’T OFFER THESE SERVICES TO THEM WITHOUT US!  WE’RE THE ONLY ONE’S WHO CAN OFFER A MEAL PLAN, ISSUE ID CARDS, OR HAVE A BOOKSTORE!”

And that’s how it all started.  The first real influx of calls wasn’t from students, but from angry Business Services officers.  Word of the program was spreading among the Business Services community through the trade organizations.  Apparently, there was a list serve of e-mail addresses that someone had compiled to warn other schools about the College Card program.  It was a hot topic that week. 

Johnny and his partners had previously estimated that less than 2.5% of colleges and universities would oppose College Card.  Ironically, it was closer to 1%, but the impact of those 41 naysayers was exceptionally damaging because they made so much noise.  Unfortunately, it was the marketing mistakes made by Johnny and his partners that gave them the power to do so.  

The phone calls they received began to flush out their marketing mistakes.  Although some callers objected to the entire NCEB brand, most people had specific issues regarding the wording of the cover letter.  Johnny, Maverock, and Abe decided they needed to clarify some marketing points publicly.  They decided to offer optional refunds to students, which they hoped would generate positive press, while also taking away the risk for people to try them out.  Despite their problems, the partners remained confident that once students had the College Card, they would appreciate it. 

Maverock also got forwarded some e-mails about his company that were circulating among members of the various trade organizations.  Angry school officers were conversing about ways to go about “combating” College Card.   Undoubtedly, many of them wanted to put the company out of business.

That week, the Columbus Dispatch reported, “Internet message systems that serve college officials have been flooded the past few days with concerns…”  Just three days later, Academe Today reported that, “The card has prompted a flurry of exchanges on Internet discussion groups for college administrators, and two associations -- the National Association of College Card Users (NACCU) and the Association of Collegiate Licensing Administrators…”

One of the messages forwarded to Maverock was sent by a school administrator to a group of card managers at other schools.  The message was entitled “Method to Combat” and it encouraged others to contact high school guidance counselors to “combat” College Card.  Maverock had also been forwarded another e-mail that was distributed to all NACCU and NACAS members about an upcoming article headlined “They’re Coming After You.”  It went on to issue the following warning:

“We don’t presume to say that these programs are illegal… However, it seems that now they’re trying to beat you [Business Services people] at your own game…What’s the most effective manner in which to deal with this type of competition, which is more serious than it used to be?  …make your own facilities more attractive to customers…” 

In other words, it was a warning to Business Services people that their businesses were coming under pressure from private companies like NCEB.

Another e-mail was sent and distributed to the members of NACCU, NACAS, and NACUBO by the Executive Director of NACCU.  It clarified to members that NCEB was in fact the same company as University Services Inc., and that NACCU was “investigating” the product offering.  It was dated less than two weeks after the mailer was sent to students.  Since the mailer was sent at bulk rate, many parts of the country had not even received the envelopes yet. 

Johnny and his partners hoped one of the nice things about having everyone talking about them was it might be easier to clarify information about NCEB.   They hoped to fix their mistakes and move on.  Above all, they wanted to emphasize that their company offered real products and services that benefited students.  Since they already agreed to offer refunds to any cardholder, they felt that they were acting in a proactive manner. 

The partners drafted a letter addressing some misconceptions about the program and distributed it to the schools through the various university trade organizations.  In the letter, they clarified their services, their affiliation with the schools, their full refund offer, and their plan to clear up potential confusion with students.  They also offered to send correspondences to customers clarifying the nature of the College Card, along with a full description of the College Card debit account and discount program.

The partners were hoping once they clarified the facts, they would fix the problem.  Instead, College Card began to be referred publicly by Business Services people as a “scam,” a “hoax,” and “useless.”  There were probably 41 schools out of 4,100 that made most of the noise and Maverock knew a lot of these people personally.  Some of them called the College Card office, posing as students, trying to get the operator to say the wrong thing on the phone.  Abe even spotted Mr. Bureaucracy e-mailing the company, pretending to be a student. 

As the Associate Vice Chancellor for Business Affairs at LSU, would later be quoted as saying in the Baton Rouge Advocate, “It [College Card] has created about the same furor as kicking an anthill.”  The University had push back when they launched the Bullfrog Card, but it remained local news in the school newspaper.  Now, the school complaints were being printed in broader circulation served by the popular press. 

In an article printed in the Des Moines Register, the executive director of NACCU, said, “I think that they had an excellent idea.  I don’t think they went about it the right way.”  Unfortunately, that was the closest thing to a professional compliment Johnny and his partners received. 

A chain reaction had already been set in motion.  The 1-% of the schools that objected to College Card made enough noise that it seemed the entire world was against them.  The Business Services officers at these schools sent letters to their incoming students advising them not to join College Card.  The letters warned families that College Card was a “fraud” and a “scam.”  Evidently, the clarification letter Johnny and his partners wrote and distributed to school administrators had no effect.  It was payback time.

These notices from the schools only aggravated parents and students.  Now, they hated NCEB, because they were alleged “scam artists.”  Johnny’s office began receiving angry calls from parents and students.  Families were accusing them of not having any products or services to offer.  They had called their schools, and that’s what they had been told.  There was nothing Johnny and his partners could do about it.

Word began to spread about them, and soon people began hearing from their friends about the College Card scam.  Some Business Services officers had gone ahead and contacted high school guidance counselors, who were now informing entire high schools across the country to beware of the “College Card Scam.”  The company’s customer service people were scared to pick up the phones, because they didn’t want to get yelled at. 

The headlines in the popular press were awful.  They read “College Card Scam” and went on to warn all parents and students from buying the fraudulent card.  The Public Affairs offices of the University of Oklahoma and Southwestern Oklahoma State University in Weatherford were reported by an article in the Tulsa World to have referred to the program as a “scam of national scope.” 

College Card had become newsworthy for the wrong reasons.  Business Services people no longer had to send out warnings in the mail, because the newspapers were more than happy to oblige.  The story got picked up by USA Today, and was featured on the bottom right corner of the Life section. 

Newspapers know a good story when they see one.  Controversy and dramatization sell newspapers.  Headlines like the following appeared all over the country:

“Colleges: $25 scam” – The Post-Bulletin. 

”College Students Duped by Card Scam” – Boston Herald

“Officials Issue Warning About College Card” – The Hartford Courant

“Colleges on Offense Against Debit Card” – The Grand Rapids Press

Newspaper articles were filled with quotes like the one from the Executive Director of Enrollment and Student Financial Services at Southern Methodist University.  In the Dallas Morning News he was quoted as warning readers, “It’s a hoax.”  In the same article, the Associate VP of Marketing and Communication at the University of Northern Texas, stated that the assertions that “students benefit from guaranteed acceptance of the card at every campus… are simply untrue.” 

“Throw it away,” was the advice from the Husson College Dean who said, “The card would have no value at the Bangor College campus,” as reported in the Bangor Daily News.  Even State Attorneys General were being quoted in the press, referring to the program as a “useless College Card,” as reported in the Times-Picayune in New Orleans.

These comments were symptoms of the larger problem swallowing the partners.  People were talking to the press without knowing any specifics about the program.  Somehow, people had come to a consensus that it was a scam.  For many of them, that was all they knew about it.

Copyright  2005 by Chris Cononico
All rights reserved. No part of this manuscript may be reproduced in any form or by any electronic or mechanical means, including information storage and retrieval systems, without permission in writing from the author, except by a reviewer who may quote brief passages in a review.