This article was originally published in 2017, but has been updated to reflect new research and consumer trends. A lot has changed since we first covered this topic, but the need to securely verify students has not!
Leading brands from Nike to YouTube to Peloton extend special discounts to college students for good reason: student offers are a proven tactic to acquire customers and build brand loyalty with a lucrative new audience.
But if your gated offers for university students depend on using a .edu email address to verify eligibility, your profits and your brand reputation are at risk.
In this article, we’ll cover why student discounts are worth the investment—and how to protect your valuable offers from fraud and abuse.
Why offer student discounts?
Reaching new customers during their college years with exclusive student pricing allows consumer brands to build relationships that can last a lifetime. Specifically, student discounts help businesses to:
Acquire new customers
When surveyed, 50% of students say they will try a new brand when offered a discount, and 97% would share the offer with other students. This word-of-mouth effect means student discounts are a highly efficient customer acquisition tactic.
Build long-term loyalty
Students respond positively to brands when discounts are on the table. 75% prefer to shop with brands that offer a student discount, and 93% say receiving a personalized offer would positively impact their brand relationship.
Collect zero-party data
Offering a student discount provides a friendly way for brands to collect zero-party data: reliable, actionable information that your customers freely give you in exchange for something of value, like an exclusive discount.
Re-engage with relevance
When you know a customer is a student, you can re-engage them with relevant content and seasonal promotions throughout the year: back-to-school, fall/winter/spring breaks, finals week, and graduation.
But what about the honor system?
Here’s where things get thorny. Offering student discounts can pay off in dividends—but you have to protect your profits by verifying that only eligible individuals are taking advantage of your special pricing.
Discount abuse is real. Our customer audits have shown that in general, it can be as high as 35%. This erodes your profits and damages the exclusivity of your discount. Because if students know that anyone can get the “exclusive” pricing, your offer suddenly becomes a lot less special and those positive brand feelings may be diminished.
Why isn’t .edu verification enough?
For many years, brands would have students enter a .edu email address to sign up for a student discount, and then open an email sent to that address to confirm it. And while that’s better than nothing, using a .edu email address leaves your offer vulnerable to fraud—and could cause you to miss out on reaching millions of nontraditional, but otherwise eligible, students.
Fraud happens in both outright and subtle ways. Unfortunately, a whole cottage industry has been built up around helping people secure fake .edu addresses for the express purpose of taking advantage of student discounts—a quick Google search turns up dozens of blogs and videos with workarounds and tricks. And beyond blatant fraud, there’s the subtler issue of college alumni that retain access to their .edu email address for years after they graduate (or even indefinitely, as our survey found was true for 51% of respondents).
And that same survey showed that 43% of college students never received a .edu email address in the first place. This means requiring one to verify your discount could unintentionally exclude millions of nontraditional or international students and end up creating a negative brand experience instead of a positive one.
Finally, using .edu verification isn’t ideal because it requires your would-be customers to leave your website, go to their inbox, click an email, and then go back into purchase mode. This added friction can lead to cart abandonment and lower your offer’s conversion rate.
How can you verify students?
Fortunately, there’s an alternative method of student verification that provides a better experience for both your brand and your customers. We call it digital verification, and here’s how our process works:
- During the checkout flow on your website, our embedded, white-labeled software asks a student trying to redeem a discount to verify their identity.
- The student enters a minimal amount of personal information, such as their date of birth and the name of the school they’re attending.
- Behind the scenes, our identity marketing platform references 20,000 authoritative sources to automatically review and authenticate the student’s credentials.
- Assuming they’re eligible for your offer, the student is instantly verified and approved!
- The student continues to buy or subscribe with special pricing intact—never leaving your website or stepping outside your brand experience.
Student verification can happen once or be scheduled to repeat at any interval you choose, such as every year or every semester.
This allows you to protect your offer from long-term abuse, create positive moments of re-engagement with students on a regular basis, and stay aware of when your students are graduating—so you can convert them to full-price customers.
Compared to using a .edu email address, digital verification is a win-win: more secure, more seamless, and sets up your brand for ongoing engagement and a long-term relationship.
Building loyalty past graduation
Exclusive offers don’t just drive purchases and subscriptions while your student customers are attending college. They lay the foundation for a loyal brand relationship that could last for years.
Student discounts fall under the umbrella of identity marketing, an approach to relationship-building based on recognition of your customer’s meaningful personal attributes (such as life stage). By offering an exclusive discount, your brand is creating a personalized experience and moment of appreciation for simply being who they are: a student.
And that matters deeply to this audience. 92% of students identify with being in college more strongly than they do their religion, family role, hobby, or nationality/cultural background.
When you acquire customers through this kind of personal recognition, you’re creating a positive brand experience that you can build on for years to come.
Marketers can use the zero-party data you collect through verification to create relevant content, deliver timely messages, and continually reinforce that your brand is there to support students during their college careers.
And when graduation time comes, you’ll have a well-established foundation to build on as students transition to their next life stage.
3 great examples of student discount programs
Brands across industries have found success with identity marketing to students because students welcome discounts on almost everything! When surveyed about the types of discounts they’d like to receive, college students were most interested in special pricing for:
- Entertainment (73%)
- Computers and mobile devices (73%)
- Streaming media (73%)
- Clothing (72%)
- Restaurants (72%)
- Subscription services (69%)
For example, here are a few specific brands that have driven revenue, customer acquisition, and brand loyalty with student discount programs:
Non-profit organization CompTIA offers training, credentialing, and mentorship to new IT professionals—so offering a student discount was a perfect fit to grow their audience. They launched a program using .edu email addresses to verify eligibility but saw high levels of fraud when people started using fake emails to secure vouchers and re-sell them to non-students. CompTIA partnered with SheerID for digital verification and reduced fraud drastically, gaining the confidence to promote their program more widely and giving their organization the ability to reach millions of nontraditional students. Ultimately, CompTIA saw a 20:1 ROI for its identity marketing campaigns.
“We had identified a number of pockets of fraud, and when we implemented SheerID, they quickly disappeared,” said Randy Gross, Chief Information Officer. “SheerID made it impossible to game the system, and it was fun to watch the bad actors wither.”
Comcast joined with Amazon Music to create a combined offer of internet, content, six months of premium music, and a $150 prepaid Visa gift card at a special price for students living off-campus—who proved trickier to reach with marketing efforts than those who lived in official university housing. With digital verification streamlining the sign-up process, the offer drove a 6x increase in subscribers and a 91% increase in conversions—making it the top-performing gated program in Comcast history.
“We now have a scaled, always-on program that leverages behavioral insights, student community access, and best-in-class offer integrity to engage Gen Z customers and maximize lifetime customer value,” said Cheri Davies, Senior Director of Acquisition Marketing.
After achieving success with a military discount, sunglass brand Shady Rays expanded its identity marketing program to include students. And while their customer base typically skews older, Shady Rays has seen a disproportionately high redemption rate among students—suggesting the brand has room to grow this lucrative new audience. The combined identity marketing campaigns saw 5x revenue, 5x engagement/clickthrough rates, and 3x repeat purchases.
“The best way to engage with students is to offer them a discount, so they can see the value in your product at an easier entry point,” said Jordan Light, Growth Marketing Manager. “We’d use the contact information they gave us to re-engage with them, so we could keep them up to date even after they graduate. SheerID gives us the perfect way to launch and deepen their brand relationships.”