Business Rx: Expanding refrigerator rentals on campus
Just over a year ago, Eric and Adam VanWagner started a business renting mini-refrigerators and microwave-fridge combos to students on college campuses. They started this business after working for a similar company in the past, where they realized there was a potential to improve the rental business model and to create a more recognizable brand image. The company, MyFridgeRental.com, based in Silver Spring, serves 10 universities and colleges in the Washington-Baltimore region. Identical twins Eric and Adam — now college students themselves studying business at the University of Maryland — are now looking for ways to increase their market and expand the business.
“Most college students like the convenience of having a refrigerator in their dorm room, and MyFridgeRental.com makes it easy. After we establish a vendor agreement with a university, students go online to place their order. We then deliver the fridge to the dorm room before the student arrives on campus, and pick it up at the end of the school year when they move out. We’re already providing this service to college students at several schools, but we want to expand our market. We’d like to tap into other universities in the region, including the University of Maryland. The large university system has proven difficult to forge a formal marketing partnership — a model we have with all of the current schools we service. How do we break into a new market with an unfamiliar model?”
Asher Epstein, managing director, Dingman Center for Entrepreneurship
“There are a couple of different challenges here. One, how do you penetrate a new market? You have both formal and informal channels that you can go through to get you product into a new market. If you can’t make progress going through formal channels — in this case, forging a partnership with the university — reach the market through informal channels. Try to get as many customers as you can through informal or grass-roots marketing, then you can use your success as validation to approach the formal channel again.
“If MyFridgeRental.com can get 2,000 students using their service without the university’s buy-in, when you go back and pitch the university again, you will be more likely to prove the value of forging a formal marketing partnership.
“For informal marketing, figure out whom you are targeting and approach them directly. For refrigerator rentals, you’re really targeting parents, not students, so you need to catch them when they’re here. I’d recommend getting together a sales force of students to stand out in front of the biggest dorm buildings on campus at the beginning of the school year when students are moving in.
“The other clear challenge is figuring out the best value proposition for customers on the product. You obviously want a business model that makes economic sense for the business and the customer. Perhaps you could explore a lease-to-own rental model.
“Finally, think about other potential markets. Is there a way to market to senior citizens? Summer camps? Medical patients? Others?”
“Using a student sales force on move-in days at the university is a great idea. A lot of our last-minute rentals at other campuses happen like this now — when one student sees us delivering our fridges to another student. It would be great to formalize this as a sales strategy and have a way for students and their parents to sign up for rentals on the spot.
“As far as the business model, we haven’t considered the lease-to-own option, but that’s definitely interesting. And we’d love to think about other markets — most of our refrigerator units are sitting in a warehouse all summer.
“We’re forging ahead with ‘informal’ ways to market to students. One channel we have considered is marketing through different student philanthropies on campus. One group we’ve talked to is the University of Maryland Relay for Life, which is the collegiate fundraising branch of the American Cancer Society. We would be able to give a percentage of our profits to this group, giving us exposure to students participating in the event. Being that Relay for Life is the largest philanthropic organization on the University of Maryland campus, an informal channel such as this could be very beneficial to us. This year alone about 2,500 to 3,000 students will be participating, and these students are all part of our direct target market.”