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Student Advantage’s discount program: Coming to a campus card near you?

Student Advantage has been offering discount programs to college students for 11 years. But now, the company is taking the next logical step by merging the offering with a college’s existing campus card program.

The first test, an incredibly successful one at that, was implemented last fall at Georgetown University outside Washington, D.C.

“We’re now allowing, for the first time in our history, schools to add all the benefits of the Student Advantage program right on to their own ID cards,” said Ray Sozzi, CEO for the Boston, Mass.-based company. “This is just one other example of how schools can enhance the value of their own ID for their students.”

Added Kathleen Brugger, director of university relations for Student Advantage: “The Student Advantage discount card compares to the AAA (American Automobile Association) discount card or AARP. It’s a membership program with an annual fee providing discounts to student members at close to 15,000 merchant locations across the nation.”

“We call it a national student discount program for college students,” said Mr. Sozzi. Membership at universities, he added, may run from a few dozen members to thousands.

“We work in partnership with 500 colleges/universities which directly market our product as a stand-alone, or in conjunction with other student products,” he said.

Discounts range from 15% to 25% on train and bus fares, movie tickets, school supplies, and more.

“For a lot of companies, like Amtrak, or Greyhound,” said Mr. Sozzi, “this is their only discount. You just can’t show up with your college ID for the discount. You have to have the Student Advantage card to get that discount.”

Mr. Sozzi is excited about the Georgetown project. It certainly can mean greater expansion capabilities.

The reason for merging Student Advantage on Georgetown’s One Card, marketed as the GOCard, was a simple practicality.

“The University had spent years developing a consensus to implement a one card system that integrated all of the functions tied to the seven or eight previously existing card systems on campus,” said Margie Bryant, Georgetown’s associate vice president for Auxiliary Services. “We had a library card, a laundry card, a meal plan card, a parking card, we had cards coming out our ears. We had to keep our One Card true to its name.”

She said: “We had taken the time to fully incorporate all of the different on-campus services. When I thought about Student Advantage, I saw a win-win opportunity. The students would have the added convenience of one more function tied to their GOCard and one less card to carry around. Student Advantage could get out of the card production process and be directly associated with the cards the students are using every single day around campus.”

A university benefit, she added was that Georgetown “could develop a new income source to help defray the cost of the one card office.”

The program is a winner for merchants too, she said. “Previously the merchant had to ask for another picture ID if it wanted to verify the person with the Student Advantage card was the person that purchased the membership. Now, merchants get the picture ID and the Student Advantage card all on the one card.”

Adding Student Advantage to the Georgetown card costs the student $20 a year or $50 for four years, a little lower (at least at the four-year level) than what the company charges students at other universities. Participation in Student Advantage is, of course, voluntary. The students don’t have to buy the Student Advantage discount add-on. When they do, however, the college shares in 25% of the income generated by Student Advantage membership.

“We kicked off the program last year and it was a great success,” said Ms. Bryant. “We broke all the records. We thought if we could capture 50% of the students, we’d be doing excellent, but we captured 80%. And I expect this year will be just as good.”

One thing that made it nice, she added, “is that if a student loses his or her ID card, the student can turn it off right away, so someone can’t use the card to receive discounts he or she didn’t pay for.”

Georgetown has 12,500 students including medical and law. It is entering its third year of its card program with system provider Blackboard.

Prior to the melding of Student Advantage and the GOCard, Ms. Bryant said, “Student Advantage was doing their thing with the students and residence halls. It was kind of grass roots, it wasn’t really advertised. Now, when a potential student comes to Georgetown, we send them an e-mail telling them they’re eligible for a One Card and ask whether they want to open an account with Student Advantage. They send their photo back to us in a jpeg file. Many of them sign up at that time so we can pre-produce their GOCard with Student Advantage so it is waiting for them when they arrive on campus.”

Added Student Advantage’s Ms. Brugger: “For our first year of offering the integrated card, we were very purposeful in launching only one school. We wanted to do one and do it right. Now, with our initial success, we have more schools in the funnel than we ever imagined.” She said several other colleges will be announcing similar partnerships with Student Advantage this fall and, in the next month or so, the company intends a “large marketing and outreach effort” to get more colleges to integrate the Student Advantage Card with their IDs in 2005.

“Georgetown was a strong success. The result was exceptional because a vast majority of students chose to pay the extra money,” said Mr. Sozzi. “Students clearly saw the value.”

While Student Advantage also has a debit add-on called SA Cash, “The payment component for Georgetown’s off-campus debit program is being handled by Georgetown,” said Mr. Sozzi. “Anything with Student Advantage, we do ourselves. It is just a nice complement that runs incrementally to whatever application Georgetown has.”

Any student anywhere in the U.S., is eligible for the Student Advantage Card, said Mr. Sozzi. Only U.S. merchants participate. “However, we have recently expanded into Europe to allow students planning to start at a U.S. college or university to enroll in the program.”

The card costs the student $20 a year. “What most students do right now,” said Mr. Sozzi, “is pay $60 for all four years. It’s like getting the fourth year for free.” But, like Georgetown, if the card is integrated with the college’s campus card, the student gets another $10 discount by signing up for four years.

Five years ago, Student Advantage introduced SA Cash that, said Mr. Sozzi, “allows students or parents to put money on their ID card. It’s just a way for schools, instead of managing an off campus debit program, to outsource it to us.” SA Cash is expected to roll out at more than a dozen schools this fall.

The main advantage of SA Cash is that it gives schools “the ability to allow their card to be used off campus,” said Mr. Sozzi. “We install our own hardware to allow the school ID card to be swiped in the merchant location. We’re online with the school’s host system, working with both Diebold and CBORD schools.”

Student Advantage two years ago sold its SA Cash technology to Blackboard to allow it roll out the same service to Blackboard’s schools, added Mr. Sozzi.

Mr. Sozzi said he got the idea for Student Advantage 15 years ago while a student at Dartmouth. “It became apparent to me that there was no resource to leverage the buying power of students. There was no AARP equivalent for students,” he said.

After graduation, he spent a couple years “in corporate America” before finally launching his idea. Even then, it didn’t come easy. “It took a long time. It was a big chicken and egg thing you have to figure out how to crack. We needed a lot of student members, but it was tough to get them unless you had a lot of merchants signed up. Conversely, it was difficult to get merchants to offer a discount when we didn’t have the student members,” he said.

“Colleges and universities took a long time. It was a number of years before we had a university relationship.”

For much of that time, Student Advantage was a public entity, but last year Mr. Sozzi completed his purchase of the entire company and “took it private,” he said. “It was costing us a lot of money to be a public company with little benefit to our customers. I bought out 100% of the stock.” That was made easier, since he was the company’s largest shareholder.

Taking the company private “made more sense for us and it allowed me to refocus on building our business and working with customers rather than on investor relations,” said Mr. Sozzi.

“Our active members estimate they save several hundred dollars a year,” said Mr. Sozzi. “Just take Amtrak and Greyhound offering 15%; that alone is a significant savings. From transportation to school supplies to fast food our average 15% discount can save students a bundle.”

With the new, logical tie-in with the official campus ID card, it seems likely that many more students will soon be recognizing these savings.

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