Lessons Learned From a Failed Ivy League Entrepreneur

A "Case Story" By Chris Cononico
 

Chapter Thirty-Two

“The truth is always the strongest argument.” -- Sophocles

How do you create an off-campus services business that can rival thousands of colleges and universities? As the logistics of the program came together, we began focusing on our marketing strategy. We had accumulated hundreds of marketing samples from both schools and private companies that sold products to students. Full-colored brochures, envelopes, and letters lay in enormous piles across my office. I was convinced that somewhere amidst all of this information was a formula that worked.

To be clear, none of us were marketing majors at Wharton. George and I studied finance and entrepreneurship, and Mark studied operations management. However, we decided not to hire a Vice President of marketing. We thought the value we contributed was our understanding of the college market. So, the last thing we wanted was for a 40 year-old Madison Avenue executive to come onboard and tell us how to promote ourselves to students. As a result, I was supplementing my education with dozens of books on marketing and sales.

We knew QuakerCard had enjoyed a response rate in excess of 50%. We knew Business Services at colleges across the country enjoyed response rates from their mailers above 90%. Meanwhile, companies like Citibank and Chase got response rates of 1%. The irony was that solicitations from the colleges were of the lowest quality, but did the best. Meanwhile, the mailers from private companies were of the highest quality but did the worst.

George, Mark, and I sat in our offices talking about this quirk. It was obvious that families preferred to purchase school-endorsed products. We reasoned that since students were inundated with information, they preferred to say “yes” to whatever their college recommended even if it was more expensive. Relying on the school became a less stressful way to plan for campus life. Besides, most families assumed everyone would follow the school’s suggestions and there’s always a feeling of safety in numbers. As a result, we believed marketing materials from outside companies would be labeled “junk” and discarded. If we were to be successful, we needed to break that pattern.

At the time, books such as The 22 Immutable Laws of Branding and The Ultimate Marketing Plan heavily influenced me. So, I decided we needed to “own” a unique need in the minds of our customers. After all, QuakerCard had become a campus-specific “restaurant meal plan,” in the minds of students. Likewise, we wanted Campus Card to be viewed as more than just a debit or discount card. We wanted it to be a way for students to plan for their off-campus needs.

If families were valuing the school brand and the bundle of services provided by the schools, then we wanted to present ourselves as an “off-campus” services company for students. After all, we provided similar services as did the schools, but we concentrated on the off-campus. With our alternative meal plan, bookstore, and discount program, we wanted to emphasize our business was 100% focused on the college market. Therefore, we were different from banks offering debit cards, because meeting the needs of students was our only business.

In that regard, we were hoping for the same branding paradigm enjoyed by companies such as ETS and the Princeton Review. These companies had become academic brands in most people’s minds, even though they were private companies. We wanted to accomplish the same thing, but for off-campus services. Likewise, the non-profit industry trade groups like NACCU, NACAS, and NACUBO were educational associations, but they also presented unique branding paradigms. Both universities and private companies were members. Although my company was a for-profit organization, we were intrigued by the idea of viewing our customers as “members.”

We also wanted to define our competition as being the “on-campus” services of the colleges and universities. We didn’t want to be compared with generic financial services companies like American Express and Citibank. Rather, we wanted our restaurant meal plan compared to the school cafeteria. We wanted our online bookstore compared to the school bookstore. We wanted our discount program compared to the school programs that didn’t offer discounts. In short, we thought if we compared our “off-campus” services to the schools’ “on-campus” services, we looked great.

We were trying to create a business model that could compete with thousands of universities and colleges, so we could challenge their monopoly on the sale of meal plans and books. As we contemplated the impossible, we came across a service called the “International College ID Card” or the “ICIC.” As far as we could tell, a travel agency issued the ICIC and it was not affiliated with any colleges or universities. This “identification card” entitled students traveling abroad to receive special discounts and promotions. In fact the card was used by thousands of students every year and we were amazed at how successful it seemed. In fact, we knew students at Penn who had purchased the card.

The more we thought about it, the more we liked the concept of issuing our own student ID card. Admittedly, the idea never would have occurred to us had we not stumbled across the ICIC. Nevertheless, it seemed like a good product positioning strategy. After all, our ambition was to become an off-campus services company that rivaled the on-campus services of over 4,000 schools across the country. Issuing our own off-campus identification card seemed to fit that vision.

We reasoned a national identification card could best link together the different products we offered. Besides, it had more marketing sizzle than did our “College Pack.” Suddenly, we were creating an independent national student-identification card. We hoped that families would “enroll” to be become members of an organization like ours that specialized in coordinating off campus services. Once people understood our company, we hoped they would welcome competition to the school-sponsored services. We envisioned ourselves assembling valuable benefits for students beyond the physical boundaries of their schools.

Unfortunately, we didn’t think our existing company name, College Financial Services, conveyed our uniqueness. It didn’t feel like the name of an organization that could compete with the colleges and universities on a national scale. We were essentially trying to compete with the meal plan and book businesses at 4,100 schools across the country. We didn’t want a name that sounded overly “corporate,” because, unlike banks that issued debit cards, serving students was our only business and we were still exploring the subtle distinction between having “members” versus “customers.” Like NACCU, NACAS, and NACUBO, we felt words like “National” and “College” should be included and we decided to substitute words like “Board” or “Association” for “Company.” Ultimately, we changed the name of our company to NCRB, which stood for the National College Registration Board.

The name “NCRB” didn’t sound like a typical name for a start-up company, but neither did the “ICIC” or International Student ID Card. As members of the industry trade groups, we met the people managing these organizations, and we felt we could do a similar job directly for students cutting out the middleman, which we viewed to be the schools. In many ways, NACCU, NACAS, and NACUBO also inspired the NCRB name.

Since our initial marketing program was dependent on a successful direct mail campaign, we wanted to choose a name that fit our branding strategy and got people to open our envelopes. Undeniably, we knew our mailers at Penn benefited from the names “QuakerCard” and “University Student Services.” Penn’s mascot was the “Quaker,” so it was easy for people to associate our program with campus life. Arguably, these names got people to open our envelopes and investigate our services. On some level, creating a brand that got people to open envelopes was the only way to compete with the schools, especially if we were going to stake so much on a single direct mail campaign. Besides, once people explored Campus Card, we believed they would be inspired by our services, not the name of our company. The end would justify the means.

We spoke with our banking partner and determined if a student sent his or her photograph, we could issue the Campus Card as a photo ID. In our minds, we were starting a rivalry between our program and the on-campus services of the schools. We were trying to think big and our creating an organization like NCRB seemed like the right plan, especially if we wanted to dominate the off-campus market across thousands of schools.

I think when you stare at a problem long enough, it’s easy to miss the forest through the trees. We assumed since “QuakerCard” and “University Student Services” had worked at Penn, “Campus Card” and “NCRB” could be successful on a national level. As entrepreneurs, we never envisioned the backlash from the schools for our branding strategy. We took comfort that the International College ID Card and NACCU, NACAS, and NACUBO were all successful branding paradigms. However, we ignored the obvious differences with our situation. For example, the ICIC was for students traveling in other countries, not domestically. That might have been how the ICIC avoided conflict with the universities. Likewise, NACCU, NACAS, and NACUBO each had universities and colleges as members.

With less than a month to go we embraced our new marketing strategy. We didn’t have a lot of time to do extensive research, so we trusted our intuition. As entrepreneurs, it was a risk we were willing to take. After all, we viewed ourselves as experts on the college market.

 

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.