Chegg CMO Proves That Thinking Inside the Box Has Its Advantages

Former Unilever Marketer Helping Site Achieve Goal of Becoming Virtual Student Union

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When former Unilever marketer Esther Lem became CMO of Chegg less than three years ago, it was largely an online college-textbook-rental retailer, and her biggest experience on college campuses was paying -- sometimes dearly -- to get her brand, Axe, in front of college students.

Her mission from CEO Dan Rozensweig was to help turn Chegg into a sort of virtual student union and one-stop shop for college students -- and develop more ways to reap income from brands like those at Unilever that wanted to get in front of college students.

She says that today Chegg is well on its way toward accomplishing those goals.

Besides renting textbooks, Chegg helps high-school students find scholarships. Once they enroll, Chegg helps them pick courses via Courserank, an online service it acquired in 2011 that provides crowdsourced course information, data on grade distributions and scheduling for 500 participating universities. Chegg also sells 24-hour homework help for $7 to $15 a month, crowdsourced notes from Notehall (now being consolidated into Chegg.com) and digital prepaid-card services through American Express' Serve, which is now the only way to get payments from Chegg for textbook returns.

Chegg boasts some kind of business relationship with around 30% of college students and 40% of college-bound high-school students, Ms. Lem said. And it's not stopping there: In an effort to learn how to maintain relationships with students post-college, Chegg joined with McKinsey & Co. to survey 4,900 graduates about their experiences after leaving campus.

PROBLEM-SOLVERS

Esther Lem
Esther Lem

Not surprisingly, given the economy, graduates are disappointed. Almost half overall and a majority of graduates of public colleges are working in jobs that don't require degrees. More than half wish they'd chosen different schools or majors, while about a third feel they left campus unprepared. Six times as many grads are working in restaurants and hospitality as had hoped to.

Ms. Lem and VP-business development Elizabeth Harz see Chegg as being about backing ideas from college students to help solve these and other problems.

Chegg itself was a solution from Iowa State students Osman Rashid and Aayush Phumbhra, who in 2005 named it as shorthand for a chicken-and-egg conundrum: They needed jobs to get into college and college to get jobs. Courserank was started by a Stanford student perplexed by how, in 2006, one of the world's leading tech centers was still using paper course catalogs. Notehall was founded by University of Arizona students who, well, didn't necessarily want to attend all their classes.

Helping symbolize all of that -- and a focal point of Chegg marketing -- is the orange box the textbook rentals come in. "That box sits in their rooms until the end of the semester, so the branding in that room is wonderful," Ms. Lem said.

Credit: John Kuczala

The box is also a medium for other brand marketers, including HP and online fashion retailer Nasty Gal, which have included offers in recent textbook shipments. While Chegg's official mission is to help students "save time, save money and get smarter," it's certainly out to sell them something too, including products and services from a growing list of partners who view college as a watershed point akin to getting married, having kids or moving, in terms of marketing opportunity.

Between high school and the first year of college, Chegg finds 68% of students change laptop brands and 70% change smartphone brands. Overall, spending on non-school items more than triples to $750 monthly.

PARTNERSHIPS

Recent Chegg boxes have included samples and offers from Procter & Gamble Co.'s CoverGirl, American Greetings and Papa John's. The pizza company saw a 39% increase in online ordering from students exposed to its campaign, according to Ms. Harz.

Red Bull included a full-size sample inside the boxes in January. With no request or hashtag, according to Chegg, students spontaneously spread the message -- "Nobody ever wishes they slept more in college" -- on the attached notecard from Red Bull nearly a million times on social media.

"A lot of brands are very challenged by this generation," said Ms. Harz, but Chegg isn't one of them. She added that students tend to be "great advocates for the brand. They're not a cynical bunch. You just have to engage them the right way."

But with additions to its partners and offerings beyond textbooks the past few years, Chegg now must focus on what its own brand means. Ms. Lem has hired boutique shop BarrettSF to lead what she terms a "huge" branding effort later this year to tie together a program that includes search-engine optimization, social media and public relations. Adobe's Efficient Frontier handles SEO and other digital media, while SutherlandGold handles PR.

"Huge" is relative. While Ms. Lem didn't disclose spending for the effort, she said her budgets at Chegg are "notably smaller" than those for brands such as Axe and Dove at Unilever. "But I'm much, much smarter with what I do and how I spend it," she said.

She's also far more in control of her brand and customer data than she was at Unilever, where "I was only as good as that brand looked on the shelf with the other 40 SKUs. Now, from a business and branding standpoint, I talk directly to students."

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