The current issue and full text archive of this journal is available at www.emeraldinsight.com/0888-045X.htmBL24,2 The library value deﬁcit Michael Germano John F. Kennedy Memorial Library, California State University, Los Angeles, California, USA100Received 26 April 2011 AbstractAccepted 26 April 2011 Purpose – While the great recession may have concluded more than a year ago, the lingering effects of state and local budget contraction and austerity are having a highly negative impact on libraries and librarians. The future for publicly funded libraries as institutions that promote learning, literacy, knowledge creation and entertainment is increasingly doubtful as publicly funded libraries across the country are seeing unprecedented levels of budget cuts. While the immediate cause of such reduced funding seems rooted in budgetary pressures, the reality is that library ﬁnancial support is traditionally premised upon a publicly held assumption of goodwill for libraries and the societal beneﬁts they represent. In order for libraries to survive the economic downturn and austerity measures put in place by government budgets, they need to rethink the role, purpose and beneﬁts of library marketing in favor of a more sophisticated approach that conveys the unique value of their library and its offering to their speciﬁc user population. This paper aims to address this issue. Design/methodology/approach – Informed by the author’s extensive experience in marketing information services, the paper discusses the current trends in library marketing, especially those aimed at conveying the value of libraries, and ties them to relevant scholarship in the areas of services marketing and value creation. Findings – Assumed goodwill is inadequate to the task of competing for ﬁnancial support in a post-recessionary environment where expenditure of public funds is highly scrutinized. In order to survive long term, libraries of all kinds must take on a more sophisticated view of library marketing that focuses on value creation. Eliminating the old model of presumptive value in favor of one that utilizes the marketing process in order to communicate the competitive viability of libraries as place and content providers to their users in the form of targeted beneﬁts that convey value, is critical. Simply put, if libraries hope to receive continued support in today’s challenging ﬁscal climate they must elevate marketing to a critical operational function while focusing that marketing effort upon communicating the library’s beneﬁts and value to the users it serves. Practical implications – As a librarian, adjunct professor of marketing and former sales and marketing manager for a large information company, the author relies on his years of experience to convey a more purposeful sense of library marketing that is directed at communicating a library’s unique value or worth to its users based upon an understanding of their needs, the beneﬁts to them speciﬁcally as well as the competing options available to them in terms of information acquisition. Originality/value – The paper shares speciﬁc ideas regarding the purpose, role and beneﬁts of library marketing that are connected to improving perceptions of the worth of libraries and the perception of value to a speciﬁc community as a means of engendering future support for them. Keywords Great recession, Austerity, State and local budgets, Value creation, Value propositions, Goodwill, Library marketing, Public libraries, Library users Paper type ViewpointThe Bottom Line: Managing Library Libraries as institutions are increasingly under siege. While the current economicFinances climate has resulted in an unexpected reversal of the previous decade’s decliningVol. 24 No. 2, 2011pp. 100-106 demand for libraries and librarians, the most brutal economic downturn since the greatq Emerald Group Publishing Limited0888-045X depression is making their survival questionable (Luther, 2011; Online, 2010). EvenDOI 10.1108/08880451111169124 more ironic is the idea that the conditions that led to the recent recession provide strong
justiﬁcations for the critical necessity of libraries. Such events provide ample evidence The library valueof the need for a knowledgeable and literate populace in order to lessen the chances of a deﬁcitsimilar economic catastrophe (Britt, 2010). The root causes of the current one, includingthe cumulative effect of several decades’ worth of bank deregulation with minimalpublic reaction from a ﬁnancially illiterate populace, poor understanding of credit andcredit markets as well as the complexity of mortgage lending agreements that led topoor decision making by homeowners, are all literacy related issues that strong 101libraries are institutionally capable of mitigating. The inference follows that libraries ofall types, it can be argued, are inherently important and necessary since they arecapable of playing a vital role in lifelong learning that can improve peoples’ lives in aninﬁnite number of ways. Despite the seemingly obvious need for libraries and the role they play in informinga literate populace by supporting education and knowledge creation, libraries continueto receive the budget axe. The current state of public ﬁnances in the US particularlyhas revealed that municipal, state and federal government deﬁcits are unkind tolibraries to say the least (Kaser, 2010). Shortfalls in available funds have resulted indecreased hours, interrupted collection development, librarian layoffs, and in somecases, outright closures. Highly regarded institutions like the Los Angeles and NewYork public libraries are responding to this new ﬁscal reality in ways that are guttingtheir entire systems (De Avila and Catton, 2010; Library Journal, 2011). Publicuniversities, similarly challenged, are reacting in the same way by severely reducingtheir commitment to academic libraries by shortening hours and reducing resources forcollections, materials and infrastructure (Henderson and Bosch, 2010). The typicalreaction seems to waiver between frustration and begrudged acceptance as librariansand patrons alike attribute the cutbacks to extraordinary economic developmentsbeyond their control that no amount of public support and goodwill could possiblycounter. While the above conclusion may be warranted as a coping mechanism, it is worthconsidering whether or not it is indeed a fair assessment of the situation. Morespeciﬁcally, is it possible that the current economic crisis is merely accelerating aprocess that had already begun? One that leaves libraries severely disadvantaged inany budgeting discussion regardless of the overall resources available for allocationdue to an imprecise and unclear understanding of their worth or value? Moreover, arethe traditional reliance upon library patron goodwill and the attenuated support thatcomes from that goodwill simply inadequate to the task of ﬁnancing libraries in an eraof heightened austerity? Considering the current decreased willingness to publiclyunderwrite libraries, the answers to these questions are all too clear. As a result,libraries of all types need to rethink the ways in which they generate support frompatrons and potential users by engaging in a concerted effort to establish value(Tenopir, 2009). Additionally, like most non-proﬁts, they need to professionalize theirmarketing effort so that critical customer communication and value creation are notleft to mere “accidental marketers” based upon self-selected interest, but in their steadare executed by professionals along with an organizational commitment to marketdriven value creation (Akchin, 2001). Value creation is an exercise in which most business engage, especially when theyoperate in highly competitive industries (Zhang and Chen, 2008). The purpose is toprovide customers with a deﬁned notion of value as well as speciﬁc reasons to choose
BL their offering over competitors (Blocker et al., 2011). Ones that are aligned with needs24,2 and beneﬁts that provide customers a solid justiﬁcation for support of a business that will ensure long-term competitiveness and survival. So where does this currently leave libraries as institutions and librarians as professionals? Currently they both face a value deﬁcit in terms of the perception and acknowledgment of their intrinsic worth compared to other sources of information as well as gathering places where that102 information is used. In other words, libraries as content providers and places are not terribly competitive these days, nor have they been for the last decade or so, thereby contributing to their declining use, popularity and most importantly, perception of value. The lack of competitiveness underlying the library value deﬁcit is not so much a problem with the product or service involved, but instead a reﬂection of the deﬁciency in terms of marketing the worth, usefulness and competitiveness of libraries. Additionally, and worth noting, is that the library value deﬁcit has produced very real collateral damage in the form of perceptions of librarians’ worth. Thus, by implication, this library value deﬁcit leaves the value of librarians questionable as well. While the outcome of these combined value deﬁcits are clear, reduced public support and curtailed funding, the solutions to remedying them are not so linear. And while libraries, and librarians as previously suggested, may have historically received an enormous amount of goodwill from those they support, goodwill is not value nor does it translate into meaningful beneﬁts when it exists as a mere abstraction. Libraries and librarians must seek to actively convert goodwill to stated value for users that can be established, conﬁrmed and by extension, self-replicating. Achieving this end requires some fundamental professional and cultural changes that might be difﬁcult to execute but nonetheless worth pursuing if libraries and librarians are to re-emerge from the current economic downturn as more viable information providers and centers of entertainment, literacy and learning. More speciﬁcally, libraries need to adopt an ideological shift that moves away from suppositions regarding libraries as inherently valuable. Such assumptions about users’ conceptions of value may not be grounded in fact, and instead support more romanticized notions of the societal, cultural or educational beneﬁts of libraries that may or may not be aligned with patrons’, or potential patrons’, perceptions of actual worth. The resulting disconnect between library and patron could easily, manifest itself in decreased support due to the fact that the user or customer perception of worth is not met. Establishing and conﬁrming value that is reﬂective of user needs, beneﬁts and priorities is key. In short, librarians need to discontinue the assumptions of worth that entail user perceptions of almost hyperbolic, abstacted importance in favor of a more sophisticated marketing, customer communication and service delivery process that conveys unique value to users based upon their needs, not the library’s or librarian’s (Stephens, 2011). Interestingly, libraries have begun to take tentative steps in terms of value creation by attempting to convey quantitative measures of worth in order to prompt patrons towards a conclusion of the value of libraries and their services through the use of “value calculators” (American Library Association, 2011; Maine State Library, 2011). Such a strategy, however, seems risky considering the ﬁndings of one study that indicate that the average household in the US spends approximately $118 a year on materials that could be borrowed from a library (The Daily Green, 2011). The use of calculators to benchmark value is additionally ill advised since studies indicate that one of the ﬁrst rules of gaining customer commitment and the beneﬁts of long-term
relationships with them is to withhold a price until value has been created, established The library valueand conﬁrmed from the customer (Sweeney and Soutar, 2001). deﬁcit The obvious problem with library value calculators is that value creation is acustomer driven exercise and not a business centered one like pricing. In the case oflibraries, it is a patron-driven one. Businesses, especially those that offer services orintangibles, typically organize their efforts to drive value through their marketingefforts in the form of a value proposition, a concrete promise regarding the customer 103experience they will provide as well as the unique beneﬁts that will ﬂow from thatexperience that is delivered during all customer interaction (Frow and Payne, 2011). Atthe heart of the value proposition is a proof driven, customizable articulation of theorganization’s offering or offerings along with their intrinsic worth to its customers.Price is only one small aspect of value creation and oftentimes, not a very compellingone. If libraries wish to truly establish value that produces long term patron supportand not just goodwill, they need to take the ﬁrst step: create a customer centered valueproposition and use it whenever they communicate with patrons. As previously stated, value propositions are a critical ﬁrst step in establishing valuethat provokes the emergence of long-term customer relationships that create loyaltyand advocacy. Additionally, as introduced above, libraries have begun to explore theconcept of value creation and benchmarking, most notably in the form of libraryservice value calculators and return on investment analysis. Unfortunately theseefforts are incomplete and arguably, premature in their focus on pricing. Valuecalculators are particularly worrisome since they attempt to associate library serviceswith costs or more accurately potential prices. Such value is based primarily upon costavoidance by creating a generic list of prices in order to show how much money apatron has saved by using the library as opposed to paying for the materials borrowedor questions asked. There are multiple problems with this approach, most notably noone has clearly established that the services listed and the prices quoted are what theinformation market will bear. Moreover, the approach of assigning prices to libraryservices without establishing their value or intrinsic worth to customers represents avery real risk of creating negative reactions regarding the required investment to keeplibraries aﬂoat. In a word, they could appear too expensive or simply cost-inefﬁcient.Also, in light of the relatively modest average annual savings resulting from using thelibrary for US households mentioned above, not terribly compelling. Libraries shouldreassess this approach and attempt to convey the social value of libraries to all patronsbased upon their needs and the beneﬁts that are important to them. To do this theyneed to understand the customer and the context in which the customer makes choicesabout why to use the library or not. In short, libraries need to understand the needs andbeneﬁts that patrons derive from library use while at the same time understanding theindustry in which they operate since it arguably offers more attractive options forpotential patrons who choose other information sources or gathering places. When businesses seek to establish value in order to ensure competitiveness,increase market-share and grow the bottom line, the most crucial step is undertakingthe environmental scan (Banham, 2010). An environmental scan serves multiplepurposes in terms of assessing the business’s place in a broader, industry-wide context.Additionally, environmental scans are undertaken in order to formulate strategy byuncovering customer needs, wants, dislikes and behaviors (Chrusciel, 2011). The mostbeneﬁcial environmental scanning exercises tackle the process with no assumptions or
BL expectations in terms of outcomes. For example, the most successful businesses rarely24,2 dismiss new innovations offered by competitors as fads or inconsequential results of passing fancy. The exercise is truly one of research and discovery with absolutely no agenda other than gaining insight into competitive choices faced by customers as well as behaviors related to the industry. Libraries face some signiﬁcant competition from more user-mediated information sources that provide uninterrupted access104 non-dependent upon place. Libraries additionally confront users with increasingly divergent views regarding information, formats, and needs compared to a decade ago. Not appreciating these types of realities can severely hinder a libraries ability to create value in a way that resonates with patrons. Taking the time to fully understand a library’s user population as well as the alternatives that are available to them in terms of information access is a ﬁrst step to creating value. Deepening the inquiry into motivations and needs is the next and vital step towards connecting existing offerings to need and therefore beneﬁt. Value creation is, after all, the combining of a product or service with a targeted need that produces a unique beneﬁt. Uncovering and exploiting user beneﬁts in order to establish conﬁrmed value, it should be noted, is a highly personalized exercise that is dependent upon uncovering needs and priorities of a unique user or set of users. Without establishing such a concrete connection between what is being offered to the customer, a business runs the risk of failing to establish relevancy in terms of the customer perception of its offering. Libraries, it can be argued, have not truly established that connection between what they offer and what their users need. In defense of libraries and librarians, a signiﬁcant part of the problem is the high level of change information industry. Change that constantly alters user perceptions and expectations of what libraries offer in terms of a place, a collection or both. Prior to the widespread digitization of information, libraries as place were intuitive and clearly understood. As information became increasingly digitized and user orientations accepted the signiﬁcant beneﬁts of that digitized information, the role of libraries as place or gathering sites for sharing and learning, became less clear. The beneﬁts of the library as a collection or content provider became similarly, but altogether unfairly, compromised by that lack of the decreased importance of libraries as places. Differentiating user perceptions of these two very different needs during the environmental scan that supports the value creation process is critical. Equally important is that users do not necessarily understand or subscribe to this crucial differentiation in terms of what libraries potentially represent. They may very well have internalized one view or the other. In order to create value and receive conﬁrmation of value from users there is a requisite need to explicitly learn what those users value. Most importantly, it is critical to learn precisely which services or offerings users value, why they value them and how to differentiate them from competing forms of content acquisition and information use in gathering spaces. Library patrons, as well as potential ones, are presently afforded a wide variety of competing replacements for libraries as place. With unbound information access, outdoor spaces, cafes, online social networks or home, can viably compete with a library as a place to gather and discuss information. Libraries have spent an enormous amount of time, effort and energy focused on competing with locales that have recently sprung up as de facto information commons like cafes and bookstores. The over emphasis on library as place in order to convey a compelling competitive case for
libraries is somewhat misdirected. The true potential value for libraries is not The library valueexclusively found in the notion of their space, but rather in the commingling of content deﬁcitand the knowledgeable service offered to make the most of that content. In that valueequation space may play a role, but it is a decidedly supporting one. The true value isthe accessibility of content along with knowledgeable guides in the form of librariansthat can facilitate the best use of that content. In short, the main competitivedifferentiator for libraries and the one that has very little opportunity for which 105competitors can offer a viable replacement, is the librarian. Libraries need to conveythat value with concreteness and speciﬁcity based upon patron held perceptions ofneeds met and the beneﬁts that follow in order to establish true value. Morespeciﬁcally, value that is uniquely provided by the library and librarian in questionand that is competitive with other information gathering forms, tools and institutions. Relying upon an established sense of goodwill towards libraries is no longersufﬁcient to the task of garnering public ﬁnancial support in an increasinglycompetitive information industry. The current economic downturn merely highlightedthe intense competition with which libraries as places and content providers mustcontend. As a result, libraries must forge a new path that includes a commitment tovalue creation that is co-created and conﬁrmed by users. In fact, this activity should bean embedded in future iterations of librarian professionalism for the good of andlong-term survival of that profession. Simply put, it is no longer sufﬁcient to simply bevaluable or to even know of one’s own value without marketing that value.Unfortunately this has been the way in which librarians have established their worthfor most of their existence. Requiring patrons to discern value in an increasinglycompetitive marketplace is highly risky while leaving one vulnerable to competitors.Especially those who have a clearer message or one that is more readily delivered atcritical moments of need. Staying in the forefront of user consciousness via anarticulated statement of value in a deﬁned promise of beneﬁts that matter to that useris a ﬁrst step in creating customer relationships that can turn into advocacy andultimately represent a hedge against future budget cuts. In the ﬁnal analysis, librarians have potentially wonderful stories to share abouttheir libraries as well as their own role in making those libraries competitive whencompared to other forms of information access and gathering places for sharing thatinformation. They simply need to hone in on the most relevant ones in order tocommunicate them to patrons in the form of a stated value proposition that reﬂectscustomer needs along with the potential beneﬁts compared to other forms ofinformation retrieval. They additionally need to adopt a sense of urgency in terms ofhow critical and necessary it is to constantly sell the idea of value to patrons and makeit a professional obligation similar to their commitment to service. Such a move willdemonstrably improve libraries’ chances of continued relevance and viability whileconverting the current value deﬁcit to a value surplus.ReferencesAkchin, D. (2001), “Nonproﬁt marketing: just how far has it come?”, Nonproﬁt World, Vol. 19 No. 1, pp. 33-5.American Library Association (2011), “ALA: advocating in a tough economy toolkit library value calculator”, available at: www.ala.org/ala/issuesadvocacy/advocacy/advocacyuniversity/ toolkit/makingthecase/library_calculator.cfm (accessed 21 April 2011).
BL Banham, H. (2010), “External environmental analysis for small and medium enterprises (SMEs)”, Journal of Business and Economics Research, Vol. 8 No. 10, p. 19.24,2 Blocker, C.P., Flint, D.J., Myers, M.B. and Slater, S.F. (2011), “Proactive customer orientation and its role for creating customer value in global markets”, Journal of the Academy of Marketing Science, Vol. 39 No. 2, pp. 216-33. Britt, J. (2010), “Economics education”, Advisor Today, Vol. 105 No. 7, p. 30.106 Chrusciel, D. (2011), “Environmental scan: inﬂuence on strategic direction”, Journal of Facilities Management, Vol. 9 No. 1, p. 7. (The) Daily Green (2011), “Save money on books, newspapers and magazines – library money saving tip – the daily green”, available at: www.thedailygreen.com/green-homes/latest/ save-money-on-books#fbIndex12 (accessed 21 April 2011). De Avila, J. and Catton, P. (2010), “The city budget proposal: libraries warn of more closings”, Wall Street Journal, May 7, p. 21. Frow, P. and Payne, A. (2011), “A stakeholder perspective of the value proposition concept”, European Journal of Marketing, Vol. 45 Nos 1/2, p. 223. Henderson, K.S. and Bosch, S. (2010), “Seeking the new normal”, Library Journal, Vol. 135 No. 7, p. 36. Kaser, D. (2010), “Proving your worth”, Information Today, Vol. 27 No. 6, p. 16. Library Journal (2011), “Los Angeles PL cuts mean layoffs, loss of service day”, available at: www.libraryjournal.com/lj/home/885399-264/los_angeles_pl_cuts_mean.html.csp (accessed 21 April 2011). Luther, J. (2011), “Economic reality for libraries”, Information Today, Vol. 28 No. 3, pp. 12-15. Maine State Library (2011), “Library use value calculator: Maine State Library”, available at: www.maine.gov/msl/services/calculator.htm (accessed 21 April 2011). Online (2010), “Libraries help Americans during recession”, Online, Vol. 34 No. 4, p. 6. Stephens, M. (2011), “Stuck in the past”, Library Journal, Vol. 136 No. 7, p. 54. Sweeney, J.C. and Soutar, G.N. (2001), “Consumer perceived value: the development of a multiple item scale”, Journal of Retailing, Vol. 77 No. 2, p. 203. Tenopir, C. (2009), “The value gap”, Library Journal, Vol. 134 No. 12, p. 20. Zhang, X. and Chen, R. (2008), “Examining the mechanism of the value co-creation with customers”, International Journal of Production Economics, Vol. 116 No. 2, pp. 242-50. Corresponding author Michael Germano can be contacted at: email@example.com To purchase reprints of this article please e-mail: firstname.lastname@example.org Or visit our web site for further details: www.emeraldinsight.com/reprints