Discount club opens college market to merchants Student Advantage has 250,000 members

November 25, 1996|By KNIGHT-RIDDER NEWS SERVICE

There are 14 million students on American college campuses, and each year they have $30 billion to toss about at their discretion.

That's nearly $2,100 each to be spent on movie tickets and pizza, underwear and contact-lens solution, compact disks and, well, you know, "stuff."

Somewhere in this reality Ray Sozzi sensed an opportunity.

So, five years ago Sozzi set out to bring together the members of the learning class and their money with retailers. He founded Student Advantage, a national club that saves money for students and delivers to merchants -- ranging from the local pizza parlor to the national railroad -- access to the college market.

"You have millions of consumers making decisions about everything from shampoo to long-distance service for the first time," said Sozzi, 28. "You have a tremendous opportunity to establish brand loyalty at that point."

Student Advantage has grown from a few thousand members at colleges in the Boston area to about 250,000 members nationwide.

The for-profit company has managed to attract vendors with national brand-name recognition such as Sony Theatres, Kinko's photocopying centers and Dollar Rent-A-Car. Amtrak, which Sozzi characterizes as the "marquee sponsors" of his program, does not offer any student discounts -- except with the Student Advantage card.

For a $20 annual fee, members get the card, which they can use for discounts on everything from Burger King Whoppers to dry cleaning.

With the card, students can, for example, get:

A 15 percent discount on Amtrak fares. (Discounts are not available on Metroliners during rush hours.)

15 percent off everything from pens and notebooks to computer disks at Staples office-supply stores.

A 20 percent discount on Greyhound bus travel.

A pager from Pagenet at 40 percent off the retail price.

"It's pretty much institutionalized around here," said John Awong, a junior at the University of Pennsylvania. "A lot of restaurants take it, and it's really good for things like laundry or CDs. A lot of students 'expect' it to be here now."

Awong, who works in the student services office at the university, said he uses the card mostly for food, but that travel also is one of the big attractions.

"It's a big plus on Amtrak and Greyhound," he said. "You can save that much money [the $20 annual fee] on one -- just one -- trip. It's pretty cool."

Amtrak operators even plug the card when callers ask about a student discount.

"We are very happy with the program," said Linda Rink, marketing manager of the Amtrak Northeast Direct program. "We had been looking for a way to reach college students and had test-marketed a card, but it was very expensive for us."

She said Student Advantage cards fit the railroad's needs.

"They enabled us to gain access to students through a reputable organization and at much smaller cost than we could have been able to do ourselves ."

Colleges have been enthusiastic as well.

"I think it provides a high value-added for students who purchase the card," said Ira Hillman, general manager of Penn Student Agencies at the University of Pennsylvania. "It is accepted by a lot of the vendors on campus and downtown, and now it's accepted in many cities across the country. So easily in one weekend you can get the money back."

"The saving-money concept is the fundamental concept for our product," Sozzi said. "But we are also saying to students, take advantage of your student status, leverage your buying power."

Actually, it is his company that has been leveraging and capitalizing in its drive to become the dominant national student card.

Earlier this year, Student Advantage acquired Compus Card, a similar program based in Washington, that served many schools in the Philadelphia area. The company this year also bought U Card, an Atlanta company that had been a Student Advantage licensee for about a year and was the dominant student discount card in the Southeast.

Sozzi would not discuss the firm's profits. However, he said, "We have revenues in the little millions, but there has been significant growth." And there is little question about the kind of future the company envisions for itself.

Todd Eichler, vice president for marketing at Student Advantage, said: "We have been compared to the AARP for young people."

Pub Date: 11/25/96

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