I really like the SmarterCard, as it generates revenue in a totally different way to SmarterHousing, helping cash flow and reducing risk across the group.
With SmarterHousing, it can take 10 to 12 months before any cash will be realised from new sales. For example, letters have just gone out to a number of target landlords, in the hope we can agree terms of business before 1st September – as their properties are likely to be vacant and thus easier to photograph / video. We’ll start promoting these properties as soon as November this year, looking to let by the end of January 2010 at the very latest. Our tenants would move in in September 2010, at which point we benefit from securing the tenancy agreement, and begin taking a monthly management fee.
By contrast, there is no lag between sales and revenue with SmarterCard. We offered an initial 1,500 for Coventry University and a further 1,500 for the University of Warwick in April of this year and they sold almost immediately. We’re looking to sell a further 3,000 at £10 per card for colleges and universities in Birmingham by the middle of August, with a small number of sales throughout the rest of the academic year.
The SmarterCard is only being offered at £10 as an introductory offer, with prices going up to £20 for the 2010/2011 academic year. This may appear more expensive than rivals, for instance the SPLAT card (“Students Pay Less AT”), which is going for only £6 per year, but take a moment to think about it.
Anyone buying the SmarterCard can use the card for the duration of their time at University. Over an average three year undergraduate degree the SPLAT card works out at £24, assuming the price stays fixed at £8 per year. Whether or not you get the SmarterCard at the introductory price it’ll still work out cheaper – £10 or £20 vs £24.