Graduating to Full-Fledged Marketing Programs
"We only sold about 20 last year -- people aren't dying to get them," joked Rick VanBrimmer, assistant director for trademark and licensing services at Ohio State.
Caskets may not be a hot item among Ohio State alumni, but they are symbolic of an expanding rainbow of products and services that alumni can purchase thanks to marketing pacts between companies and universities. While alumni feed their nostalgia, companies cash in on their loyalty and universities pocket a slice of the profits for campus programs and construction.
"There are some huge dollars in these relationships," VanBrimmer said. "It used to be that what sounded like good ideas didn't really pan out and the companies were smaller and less capitalized -- they weren't really prepared to do full-fledged marketing programs. Now you are seeing some really important players stepping up."
The Indiana University Alumni Association used to receive 80 percent of its funds from the university, but that dwindled to 20 percent after state cutbacks. The association, which publishes and sends a magazine six times a year to its 76,000 members in addition to planning various alumni events, was in dire need of cash.
Fortunately, a growing number of companies, eager to mimic the success that banks saw with their university credit cards, were asking for the rights to place schools' names on their products and sell them to alumni. Three years ago, the Indiana University Alumni Association offered discounted products and services through six vendors and pulled in less than $500,000 annually through the partnerships. Now, the association has 16 partners, reels in more than $1 million through the ventures each year and is considering creating an online catalog at www.indiana.edu.
"These programs are great," said John Laskowski, director of marketing and membership for the association. "Usually in a business transaction, you have the customer and the vendor win -- so it's a win-win situation. When you bring in the alumni association, it's a win-win-win situation."
Many of Indiana University's vendors, which include Avis Rent A Car, MBNA and IBM, carry out direct mail and telemarketing campaigns to a list provided by the association or rely on it to place their fliers in alumni mailings.
"Alumni are more attractive than students because they have jobs and they have income," Laskowski said. "So if the vendor has this product and is trying to reach a higher-income customer, it's much cheaper to do it through us than to mail to the entire city of Kokomo, Indiana. We can give you lists of our business school alumni or we can give you a list of alumni who are 35 to 40 years old."
After casket retailer Oak Grove International, Manistee, MI, began getting requests for caskets with university logos, Ohio State and about five other schools granted permission to use their names and receive $50 to $60 for each $3,000 casket sold, according to James Kieskowski, Oak Grove's president and owner.
Last year, Ohio State partnered with First USA to offer alumni affinity credit cards featuring the school mascot, the football stadium or the college campus. Sign-ups through direct mail and event promotions began last fall, but the school says it already has 19,000 card holders. The Ohio State University Alumni Association, which receives money for each person who signs up, is packaging credit-card fliers with orders generated by its gift catalog that is mailed to its 117,000 members annually.
"I remember 30 years ago when we only sold match books, decks of playing cards and big tin drinking glasses to the alumni," said Ron Hopper, senior vice president of the association. "Now we feature 120 to 130 products in our catalog, and it brings in about $600,000 a year."
In Pennsylvania State University's alumni magazine, graduates can find ads that feature Penn State Spring Water bottled by AquaPenn Spring Water Co., direct them to 1-888-PS-ALUM-1 for more information about Mellon Mortgage Direct or picture shirts from the Penn State Bill Blass Golf Collection.
In November, the Penn State Alumni Association contributed $5 million toward the university's campus construction and academic programs. Card income from MBNA, which says it has 100,000 Penn State credit-card holders, made up much of that figure, according to Elizabeth Wilson, associate director of membership and marketing at the association.
"I have been in alumni relations for the last 15 years, and in the last five years, the number of companies approaching us to market to our alumni has really stepped up," said Jennifer Lewis McCarty, assistant vice president for development and director of alumni relations at Carnegie Mellon University. "There was a hesitation initially in marketing to alumni. But since associations have seen success and have had relatively little negative feedback, it has become an acceptable risk."
Seiko markets a $200 university watch through direct mail to the parents of Carnegie Mellon's graduating seniors, and MBNA markets a university credit card to the alumni. Carnegie Mellon makes $50,000 annually on these and other endeavors, but McCarty estimates that larger schools make close to $900,000 on credit cards alone.
"Every year, universities graduate more alumni, so you have this growing customer base and a declining budget if you are public school. A lot of us have had to look to external sources of funding," McCarty said. "This is a good way of doing it. Alumni feel as if they are contributing to the institution. They may not be sitting down and writing a check, but they are going to have a credit card and insurance anyway, so they figure why not try this and know that some money is going back to the institution."