Where there were once five or more co-equal competitors in the fraternity billing space, there is now a duopoly. How did a startup with fewer than 15 full-time employees force the “giants” to improve their strategies and business practices?
This is a story of David versus Goliath in the 21st Century. It’s a story of how technical superiority and maneuverability rattled a few giants.
Shortly after deciding to quit my role as a director at my fraternity’s central office, I was approached by two familiar faces. We discussed the prospect of me working for Legacy Financial, LegFi. Many of our chapters had switched to LegFi in the year or two leading up to that conversation. I had experience with the product, and felt like I could do more to benefit fraternity students selling LegFi than working for a central office. Plus, I wouldn’t have to be as cautious with my blog posts. LegFi was excitingly ego-free.
As a small, often dismissed competitor, LegFi carried unique strengths. Its prices were roughly half of the competition and its billing software required little involvement of middle men. Chapter officers could bill dues, set payment plans, organize collections, set up fundraising pages and send mass communications from an online portal. The free trials were generous and the website was sleek and modern. In short, switching to LegFi would save time, save money, and reduce a Treasurer’s headaches.
Friends who worked for competitors would often joke about my job at LegFi. Some had clearly never seen the product, and their judgements were based on resentment passed down from superiors. I knew; however, that LegFi posed a serious threat, and that our populist approach to business was benefiting students.
What if you could pay half as much as you are paying today and automate most of the work you do? That is the basic pitch behind LegFi. To appeal to students we offered low, flat-rate pricing, unparalleled automation software (in the fraternity billing world, that is), and a generous free trial.
Chapters which felt forced into using other billing software switched in droves. No matter what insults the competition spewed about LegFi, the word of mouth among student members protected the brand.
This is something many who have made a career in the fraternity/sorority space take for granted. Student buy-in isn’t necessary when only the top levels make decisions. It’s why policies we impose on chapters are rarely as effective as we wish them to be.
LegFi proved that buy-in is a valuable tool to change behavior, even if it takes longer to build momentum.
Long Term Support
Every new treasurer can request a free demo of the software to learn its ins and outs. Although my primary role was to sell LegFi, I dabbled in these training demos. It was easy, then, to help new officers uncover features that previous officers had neglected to use.
By keeping our resources simple, and promoting individual features online, we would encourage chapters to find new uses for the platform. Some realized that LegFi was more affordable than GoFundMe to collect donations for a philanthropy event. Others realized that the polling software would make voting easier.
We never took a customer for granted, and offering training to officers would often bring some back from the brink of switching to another product. More importantly, we would receive invaluable feedback on our products feature set and design. With that feedback, both in demos to potential customers and those put on for our own, we could gain a technical upper hand on our opponents.
LegFi was founded by a college student after seeing how much his fraternity friends were paying to use dated billing software. He created a simple product which grew into a business. It grew over the years, chipping away at larger rivals, but things picked up steam in the mid-2010’s.
Enough students knew of LegFi for it to gain greater recognition among national organizations. Soon, LegFi was offering mutually beneficial agreements with national organizations. Some, like mine, already had agreements with competitors, but the demands of our students, and the noticeable improvements offered by LegFi’s lightweight, low-cost tools were too great to ignore.
LegFi would gain exclusive access to conventions, offer training courses for treasurers, and share some profits back with the fraternity as a “preferred vendor.” Just as LegFi addressed student pain points to win them over, LegFi won over national organizations. Competitors offered services to national organizations once they met a penetration threshold. (90% of chapters use a product, for example) LegFi offered these services as standard features of any contract.
The Competition Takes Notice & Adapts
As competition for national contracts grew, it became the only way of effectively doing business in the fraternity billing space. Much like education, centralization threatened less competition and, therefore, less benefit to students.
Still, the ability of LegFi to, over the course of 8 years, lower the cost of fraternity billing software and to compel competitors to improve their product should serve as a blueprint for all aspiring leaders.
The professional class built around the fraternity and sorority field values hegemony. Saying that one is doing something bold is often more important than doing something bold. Whether the topic is hazing , substance misuse , or the laundry list of standards all fraternities must value , the way young professionals are taught to rise through the ranks is to stroke the ego of the established thought leaders.
LegFi operated differently. They focused their effort on the needs of students and forced competitors to improve their products and pricing. For those of you looking to make a difference in fraternity – don’t fall for the dream of slaying the beast from within. The benefits are outweighed by the limitations placed on your ability to act in the interest of students. And students, as we know, ultimately control the fraternity experience.
Is LegFi responsible for the consolidation we’re witnessing in the fraternity billing space? Probably not, but they certainly catalyzed the race to scoop up exclusive national partners. How was that done? Intuition and a willingness to address students’ real-world frustrations.
Disclaimer: I worked at Legacy Financial from March 2017 to December 2018. LegFi is currently a product offering of OmegaFi. This post does not carry the endorsement of either entity and is based on a personal observation of LegFi’s tactical success leading up to its acquisition.