Lessons Learned From a Failed Ivy League Entrepreneur

A "Case Story" By Chris Cononico
 

Chapter Thirty-Nine

Every time schools trashed our company in the press or sent warning letters to students about us, we lost customers. Even worse, some families contacted their schools and were told that NCRB was a “fraud.” Eventually, our phone lines grew flooded with angry callers. Such a negative buzz was building about us that it felt as if things were spiraling out of control.

We had always assumed that of the 4,100 colleges and universities, we would lose about 100 schools due to the competitive environment. Unfortunately, the bad press about us began to taint customers from the other 4,000 schools. Families that enrolled with us began to demand refunds, even if their schools never had objected about us. These were supposed to be our core customers, but we were losing them because of the bad publicity.

The following note from a customer was indicative of the correspondences we began having with customers:

“After reading a recent article in the Trenton Times… I discovered this was all a scam. I already sent you a check for the $25, so I would like a refund. Your cooperation would be greatly appreciated.”

Soon, our public image became so bad that we started to receive responses in the mail containing cutout newspaper headlines (usually with “fraud” or “scam” in the title) with comments written along the top like “No thanks!” More creative people sent $25 of Monopoly money or pornographic pictures torn out of XXX magazines. There was even a letter in which a woman described how she was going to kill us if she ever got another envelope in the mail from us.

We quickly plunked down $30K to retain a top NYC public relations firm in the hopes of alleviating the situation, or at least making sure the correct information was being circulated about us in the press. There were erroneous testimonials surfacing whereby people were vouching that our company didn’t have any products. There were even negative stories that personally attacked George by referring to him as a college dropout, even though he graduated with a degree.

Unfortunately, it seemed as if nobody wanted to say anything good about us publicly. Nevertheless, we believed that we could somehow “spin” the press back into our favor. We became so desperate to fix things that we started to accumulate letters of recommendation from students and QuakerCard merchants about our company. We intended to use them in some form of public rebuttal to prove that we were a legitimate company.

Some of our merchants wrote letters that acknowledged “the tremendous increase in sales” their business had seen due to our program and how “everyone in the community seems to benefit from their service.” Penn students gave testimonials on our behalf about how popular our program was with students. Meanwhile, QuakerCard merchants commented how prompt and accurate we were with our payments, and how they planned to continue to use our program.

George, forever the motivator, had Mark and I convinced we could somehow use this bad press to our advantage. What was the old saying -- no publicity is bad publicity? Labeling us as ”scam artists” might have made good headlines in the newspapers, but we were cautiously optimistic that a well-executed PR campaign could help to bring the situation back into balance and save our company.
 

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.