"I wouldn't normally buy my CDs at Tower [Records], but because of the discount, I figure why not drive the extra five minutes more to save $3," he said.
The discount he's referring to is offered by Student Advantage, a 7-year-old relationship marketing company that tracks student purchasing habits at 3,000 college campuses. SA members pay an annual $20 fee to customize marketing offers and discounts relevant to their tastes.
Next week, SA will add an e-commerce-focused Web site that tracks online purchases. That information will be added to its current database, which already tracks 1.3 million members' offline shopping transactions.
"Very few programs are able to combine online and offline purchasing data like this for the general consumer, let alone for the college market," said Ray Sozzi Jr., president-CEO of Student Advantage, which went public in June and had revenue of $9.7 million for the first half of '99.
A LUCRATIVE SEGMENT
The college market is a lucrative one. Each of the country's 5.3 million fulltime undergraduates spends an average of $150 per month on discretionary items, according to Student Monitor, which conducts a research survey of student lifestyle trends. That amounts to $100 billion a year up for grabs.
Mr. Sozzi said SA's individualized student biographies that combine online, offline and general demographic data allow the com- pany's 15,000 local and 50 national sponsors to tailor advertising and online promotions. The company's national sponsors include AT&T Corp., Egghead.com and Tower Records.
In the past, consumers had to fax in their student IDs to prove they were eligible for discounts, said Jonathan Brodeur, chief marketing officer of computer software e-marketer Egghead.com. With SA, Egghead can identify students by membership numbers and target e-mail solicitations based on past Egghead.com purchases.
He said that during a three-month marketing test in 1998, SA members spent 59% more per order at Egghead's site than the average Egghead customer.
Linda Park, director of marketing for Amtrak, said that before joining SA four years ago, the railroad had had little success reaching the college market through traditional mass media.
"We ended up spending all our energy and dollars just trying to find the students. But Student Advantage has already found them, so we can now spend our dollars getting them to ride our trains."
Ms. Park said SA's tracking has helped Amtrak build a database of frequent riders to whom it can mail targeted offers and develop marketing campaigns tailored to students.
In its first year as a sponsor, Amtrak took in $4 million in revenue from SA members alone. In 1998, 350,000 students took advantage of Amtrak's 15% discount, amounting to $15 million in incremental sales.
"I see this as a long-term investment," Ms. Park said. "Hopefully, we'll keep them throughout their life cycles, and they will continue to use us in their business lives and with their families."
CARDS BECOMING MORE COMMON
Discount cards such as SA's are becoming more common among students. According to Student Monitor's spring 1999 "Lifestyle & Media Study," 8% of all undergraduates responded with a "yes' when asked if they had used a discount card in the past week.
"It's so easy," San Diego State's Mr. Hickman said. "I get free sodas and sandwiches, $3 off CDs at Tower. It saves me money for doing nothing but carrying around a card."
Even his friends, who only use the discounts at one or two places, can save enough to make the program worthwhile, according to Mr. Hickman.
"If you buy just one pair of sneakers at Foot Locker, it already saves you $15 to $20."
BOON TO LOCAL BUSINESSES
Those small purchases are a boon to local businessmen, such as Paul Rittenhouse Jr., who owns a McDonald's franchise near Penn State. With on-campus eateries competing with local restaurants, Mr. Rittenhouse's sales were dropping.
Then he partnered with SA in April '98, offering a free sandwich with purchase of a "supersize" meal. In the first 10 days of the offer, his store recorded 500 membership card transactions. That's without advertising, aside from the SA logo posters on his doors and windows.
"This discount program is a big thing with the students. A lot of them are big eaters," he said. In March alone, 3,315 cards were used in his restaurant.
Mr. Hickman, a marketing major, doesn't mind having his transactions recorded. "The world is filled with marketers. Everyone's competing for dollars. This is a chance for the consumer to get the best deals on things that interest them and for marketers to understand the consumer. Ideally, it works out for everyone,"