Think your marketing job is tough? Larry Chiang is trying to convince college students to pay attention to their credit ratings -- you know, adult stuff like FICO scores and how your borrowing and bill-paying behavior affect it. It’s a big hurdle since “less than 10% of students even know what a credit score is,” he says.
But Chiang has to do this because the online company he founded, Duck9, depends on a pool of borrowers and lenders with good credit. He and his team needed a reliable way to get their good-credit mantra to college students while convincing them to interact with Duck9 as their friendly source for credit-related information, products and services.
How could they do this most effectively? Cell phones. “Students are on the phone 24/7 -- literally -- while computer use is still a fraction of their time,” Chiang says. They just needed a system to collect the data and get students to actually sign up.CAMPAIGN
Rather than expect students to find the company’s Web site, Chiang and his team hosted credit seminars at college campuses across the country to meet students. These events were part of new student orientations or seminars hosted by student groups, fraternities and sororities.
-> Step #1. Collect names, email addresses and cell phone numbers
As they collected data from students, they followed four rules:
- Instead of typical financial presentations, they offered real-life examples of why students needed to care about their credit scores and “underground” tips to protect themselves. Topics included a stark assessment of why blowing a few credit card payments might haunt them for the rest of their lives and suggestions, such as not volunteering to put your phone bills or electric bills in your name (get a roommate to do it instead).
- Chiang wanted to keep the registration basic, so they collected only a student’s name, email address, cell phone number and the name of the bank that issued their credit card. More detailed information was collected later, if the free reminder service convinced students to come to Duck9’s Web site and become registered users.
- They still needed to collect more information, so their sign-up tables offered a free pizza to anyone who came over to talk. They also invited students to enter a contest to win free food, downloadable music or an interest-free loan when they provided their personal information.
- Chiang’s team immediately pinged the cell phone before the student left the table to make sure the number worked and so the student could see what a message from the company looked like.
-> Step #2. Send credit-card bill reminder to cell phones
Next, they took an educated guess about when a student’s bill was due based on their knowledge of the issuing bank’s billing cycle. Typically, companies issuing cards at a big school operated those accounts from the same billing center, so Chiang’s team generally knew when statements were issued and bills were due.
Days before the due date, Duck9 sent a simple SMS text message saying, “Duck9 reminder to check your NYU visa that’s due the 25th. This’ll be your 17th on time payment.”
They also kept messages short and to the point. They didn’t include any marketing messages or offers for additional products and services with those reminders -- the goal was to build trust.
SMS messages were sent from a real phone number so students had a way to call the company back if they had questions. Again, the idea was to build trust and make the message seem more personal and less like spam.
-> Step #3. Send credit-education newsletters to email addresses
As with Duck9’s seminars, Chiang wanted to keep an educational tone with the email newsletters. Topics included steps to take to avoid identity theft and “5 sophomore mistakes” regarding credit. They also kept the newsletters in plain text and didn’t try to sell anything to students.
They labeled each email as one in a five-part series but started new subscribers with message #2 of five. The idea was to make students feel like they may have missed something and want to come to the Web site to find the first installment of the series after they’ve read a few others.
-> Step #4. Wait for students to come to the site
By creating trust with the SMS reminder service and educational email newsletters, Chiang expected many of those students to check out the Web site, begin interacting with the company and then register for additional services. They just needed to give it some time.
The pizza bribe is working better than Chiang hoped. In two years, they have signed up 500,000 subscribers for their free SMS reminder service. 50% are converting to registered users on the Duck9 site. “We’re totally happy with the program, happy to the point where I think the banking industry is going to need to change [to incorporate SMS in its services].”
Not everyone loves the service, of course, but their unsubscribe rate is just under 6%.
The “friend-of-the-student” approach to seminars has been so successful that Chiang is seeing 90% signup for the service. But the event’s reach continues long afterward because of the word-of-mouth marketing potential of the college market. “College students live on top of each other, and they’re going to talk to their friends about us.”
Hosting events like these might seem expensive, but by using student volunteers (often Duck9 subscribers), keeping presentations standardized and simple and paying for only minor expenses like a few pizzas, they have kept their cost-per-name gathered around $5.
Chiang expected to take up to 10 months to earn back the money invested in those leads but he has found they can earn it back within 90 days because of sales of other products and services from the Duck9 Web site. Useful links related to this story
Creative samples from Duck 9: