Introduction

Two issues play a critical role in contributing to the vulnerability of libraries to closure or gradual withdrawal of support:

• the tendency of librarians to market their libraries and library services as a product class rather than as a unique service delivering specific and quanti fiable benefits;
• the view of the library as a cost centre, a vulnerability exacerbated by the tendency of librarians not to take the needs of the accountants and lawyers who manage our organisation seriously.

In the corporate environment the services of a library, librarian or researcher are may be seen as an employee benefit, and therefore particularly vulnerable to budget cuts or elim ination. In the local government environment, the hard services orientation of councils can result in the marginalisation of public libraries and a lack of understanding of their contribution to the local economy and the ability of the municipality to com pete with other municipalities for industry, investment and residents.

Generic marketing

Libraries form an effective cooperative network, and all libraries depend on stocks and services of other libraries in serving their own users. Nonetheless, libraries are also in direct competition with other libraries as well as with an increasing number and variety of organisations that provide substitute services.

The casual observer might conclude that when and if libraries differentiate themselves from competition external to libraries, they either promote their own services generically or the benefits of libraries in general. There may be some differentiation between classes of libraries such as school libraries, academic libraries or public libraries, but very often, the perception of the totality of services provided by the particular l ibrary is clouded by concentration on marketing a very restricted selection of services. For example, restriction of publicity concerning programs for one small sector, such as the story-telling programs for children, gives a very warped perception of the impact of public library services in a community, and virtually no indication of its value.

Any marketing must be a response to the potential user's question: What does your particular library or service within the library offer that is so superior to every other competing services or library that I should use it? Why does it meet my needs better than the competition?[1]

Librarians must also ensure that library users and senior decision makers within their funding authorities can see tangible proof that this uniqueness ensures superiority and value-for-money compared with the competition. It is a small change in emphasis but a major change in attitude, and it requires a shift from concentrating on usage to concentrating on value.

When libraries undertake development of marketing programs they generally find solid user-based reasons to use the service class, not the specific library. We could insert any one of our competitors' names in the advertising and still walk away with the same message. [2]

We say things like

Two years hard graft [3] in a laboratory can often save a couple of hours quiet reading in a library [4]

and tell stories such as those which came from engineers of New South Wales State Rail Authority when the library was under review in 1991:

...having ready access to the resources of the Technical library considerably reduced the time required to finalize the project, and assisted in generating a technical solution which was more closely targeted to operating needs; the solution was therefore more cost effective. The order of magnitude of the savings achieved on this one project, as a result of having a readily accessible Technical Library was millions of dollars.

While the savings in this case are impressive, it would appear that the consultants reviewing the library had to interview users to gain such information, [5] and there is nothing in the statement other than convenience to differentiate between this library and another.

In 1993, when the Commonwealth Bank library in Sydney was under review, the services of Information Edge, the commercial information service of the State Library of New South Wales , were deemed an adequate substitute for the Library, which was closed down. While some may "blame" the aggressive marketing of Information Edge for the Commonwealth Bank Library's demise, the simple fact is that Information Edge markets its services in a way that suggests its services are uniquely tailored to the needs of it customers, and the majority of libraries market their services in a way which suggest that all libraries are interchangeable. In a climate of outsourcing, of paying only for services used and of reducing capital investment, it is surprising that more libraries have not been closed.

Effective marketing of libraries must fill a number of requirements:

• It must be based on needs that are primary in the user's selection of one library or information service over the other.
• It must make explicit why your library meets their needs better than every other library or information service that it competes against.
• No other library should be able to be substituted for yours with the same message being taken away.
• No other product class should be able to be substituted for your library with the same message being taken away.

Perception of libraries as cost centres

All behaviour is based on needs. In general the needs which lay behind cost-cutting behaviours are

• the need for individual senior managers to be seen as good financial managers
• the need for the organisation to obtain and keep a competitive edge.

In the current management climate reporting on the value of the library in the form which senior decision-makers most easily can understand, translates into couching that informati on in financial terms. Whether private or public sector, library funding authorities and parent bodies operate like businesses, and focus on "profit" as the bottom line, where libraries focus on the people they are chartered to serve. In itself this is evidence of librarians success in preserving the service orientation that has made the library such a special institution. But it is not enough. Documenting the monetary value/benefit of the library and its services contributes to meeting the need s of senior managers while also meeting the needs of librarians.

Role of performance measurement

The identification of the organisation's concerns is essential, so that the service can be constantly measured against them. Evaluation must be objective. Despite some advances in the area of performance measurement, libraries still tend to report raw usage statistics, sometimes analysed for trends such as increase in loans. Some libraries track and report efficiency improvements. Few have moved to regular reporting of outcomes.

Within my library service we have developed and implemented in-depth holistic data gathering which delivers information about the value of library services to the organisation, rat her than to the ordinary user. This system concentrates on the impact and significance of the librarian's activities.

Marketing only to users, and collecting data about volume of use may be a trap because the people who use the library are not necessarily representative of the target population as a whole, are rarely representative of the parent organisation as a whole, and are rarely the ultimate decision-makers within that parent organisation.

User pays

Adopting a user pays policy whereby small amounts are charged for some services does little to change the perception of the library as a cost-centre or to demonstrate business acum en. Attempts by librarians to justify marginal costing of some services by nominating them as "value-added" sends mixed messages to senior decision-makers, suggesting that:

core services are not value-added - which minimises the role of librarians whose skills add value to all library resources and services
value-added services relate more to capacity to easily relate usage to costs than to actual value.

Of particular concern must be the impression conveyed that the library is a cost-centre where marginal profit is concentrated in non-core services because core services are deliver ed at no additional charge.

The discussion of "core" and "value-added" services in public libraries in Australia has ignored the fact that the majority of our libraries operate under a sel f-help paradigm. In any library, the general process to be carried on is that of delivering specific information packets (concrete embodiments of informative material such as books and journals) to individual library users in response to particular querie s. In a library operating under a self-help paradigm, users define their queries for themselves and answer these queries by locating first the library, then the optimally relevant information packets available in or through that library. In a variant of t his, in libraries with closed stacks or closed reserve collections) users request specific information packets which are then retrieved on their behalf by staff. In either case, user satisfaction is a function of the degree to which the general library process operates effectively.

The sub-processes of acquisitions, cataloguing, and facilities maintenance are loci of critical value- adding activities without which our so-called core services are more likely t o be service failures. [6]

One of the services commonly set up specifically so it can be charged for is the Business Information Service. Commenting on the closure last year of the successful Business Information Service at Warwick University, Dr John Henshall, the Librarian, said that though the service was highly successful and fully self-financing such businesses are lucky to break even. Ironically, the turnover of the photocopying service was twice the turnover of the Business Information Service. [7]

Return on Investment (ROI)

The present economic and political climate favours value for money assessments of services. What is surprising is that Return on Investment is not an aspect of libraries that libraries are routinely incorporating in performance reporting. Yet if we consider Return on Investment it becomes immediately apparent that it can be demonstrated that libraries are not a cost-centre but a rational investment.

In accounting terms simple ROI is the ratio of the average annual net income of an activity divided by the internal investment in that activity. In library terms it is demonstratin g to fund providers the value of the services and information the library delivers compared with the total annual budget of the library. This must include the investment in the collection, in staff, and in operational costs. Resist the temptation to exclu de your resources vote on the grounds of it being capital expenditure. Implementation of accrual accounting will require valuing the library collection as an asset. Exclusion of expenditure on collection from annual return-on-investment calculations could increase vulnerability to closing of libraries, realisation of the assets, and outsourcing of services.

Because it may be difficult, (though not impossible as some have claimed) and because therefore it is important to include both tangible and intangible returns, librarians may be more comfortable with thinking about this aspect as Return Value.

Part of the difficulty in assessing the value of a service like research is the personal nature of the work that a research librarian does. The circumstances of the request affects the value of the information that is received, which is why it is important to gather value information at every transaction, and particularly important to gather information on how the information was used with the client providing the monetary value as sessment.

The return on investment of the library does not only relate to the value of the information as it is used, but also to productivity gains resulting from having trained researchers providing the service rather than people whose main role is contributing directly to the achievement of the organisation's goals spending time attempting to find information.

Assessing cost benefits

The system my operation has developed depends on obtaining information on the value of every reference transaction at the point of delivery, and in post-delivery follow-up.

Information collected includes

• name and other details of enquirer including classification - (from this salary level is deduced), and whether the enquirer is a surrogate, in which case w e also take details of the person on whose behalf the information is being sought
• details of "question"
• date and time of enquiry
• deadline
• date completed
• time taken to complete search and find the requested information
• reason for request
• purpose for which the information requested will be used
• sources consulted, search terms used
• gaps and inadequacies in our collections.

On delivery of the information, immediate feedback is sought including:

• Is the client fully satisfied?
• How much time does the client estimate was saved in having the library obtain the information rather than the client him/herself (this gives us the basis to work out the productivity gain to the Department of having the libra ry staff do the research as opposed to having officers do their own.)
• What monetary value can the client put on having the information
• How will the information contribute to achieving the Department's goals?.

At an appropriate time (not less than a week later, sometimes much longer, the time-lapse is an individual judgement call) - we go back to the client again and ask:

• Are you still fully satisfied that your needs have been satisfied? (information supplied may reveal additional information needs)
• How much time was saved as a result of having the information?
• What monetary value can you put on the information?
• How did the information contribute to achieving the Department's goals?

While some of that may seem to be duplication, having and using the information often reveals additional benefits. We report accumulated benefits by adding up all the estimates, kn owing full well that they are probably underestimations, and compare that with the time taken by staff, for productivity gains, and also report the value estimations. While this reporting method cannot be entirely statistical, the combination of hard mone tary value benefits and narrative has enabled us to drastically reduce the volume of information reported. As we apply the benefits against the total budget, including acquisitions, and are averaging an 8:1 return on investment, it is very clear to all th at corporate libraries services are an investment.

Critical to the success of the Corporate Library and Information Service Activities for which I am responsible in being able to ensure that the resources of our service are targete d to achieve greatest return on investment was ensuring that the our cost centres were restructured to include all collection development functions - purchase of monographs and other bibliographic equivalent units, journal subscriptions, interlibrary loan costs (including postage), rental of information (CD-ROMs, on-line databases, internet and other connect costs - under one cost centre. This provides flexibility in obtaining information and resources in order to maintain our target of 100% achievement o f delivery within client-defined deadlines.

Return on investment can also be increased by active seeking of opportunities for repurposability the maintenance of information in forms that allow it to be used in a variety of w ays and through different media.

How are intangible benefits included in the analysis?

Intangible benefits are the reasons for doing things that measurable benefits cannot justify. The narrative about contribution to the fulfilling of the Department's goals, is one method of documenting intangible benefits from investment in corporate library services.

However, libraries tend to rely on statements about intangible benefits, without relating them to costs or value. For example, a 1991 survey of physicians at hospitals in upstate New York, [8] prompted by the Department of Health's demand for proof of the value of hospital libraries, demonstrated some very positive results, all of which could have been collected as part of a hospital libraries ongoing performance measurement program. On a case by case basis, routinely not only demonstrating that library information contributes to ability to avoid patient death, to reducing length of hospital stays, to avoiding surgery, additional tests or procedures or to avoiding hospital admission all together [9] (some of the results of the survey) are all positive intangible benefits in a society that values human life and quality of life. Applying a monetary value to these outcomes would be a powerful way of reporting a hospital library's performance, particularly where medical care attracts a public cost. In addition, while the survey is powerful in itself it has the drawback of being a generic marketing initiative.

School and academic libraries present a challenge in demonstrating value to both the success of the academic program, and contribution to other institutional goals, such as accredi tation, ranking, and capacity to attract endowments. The major challenge for all libraries is to make the change from reporting usage to reporting value.

Community benefit from public libraries

While documenting the return on investment of corporate and hospital libraries is relatively straightforward, public libraries represent a particular challenge. Contribution to the productivity of the local government authority may be marginal and contribution to the community not necessarily obvious. It is, however, entirely possible to demonstrate contribution to the economy of the area, together with some cost-reduction in delivering other Council services.

A large proportion of the money spent on providing a library service goes in staff salaries - and most of those salaries are recycled into the community or returned to the community in tax-funded expenditure.

Libraries, because they allow many users to share library resources, reduce the community's expenditure on books, magazines, newspapers and other library materials. This has two results.

The first is that cost of waste disposal is reduced - you return your magazine to the library or leave the newspaper in the library rather than throw it out.

The second is that use of the library's shared resources frees up personal discretionary income to be spent in other ways in the community. Very little of what is spent on books, magazines and newspapers remains within the boundaries of Australian local government authorities. The wholesalers of books and magazines are concentrated in very few areas, largely located in Sydney and Melbourne. And most books have a large foreign exchange component within their price, being either wholly or partially produced overseas whether or not they are published in Australia. So if by providing a library service, every man, woman and child resident within your boundaries, saves, as a result of co uncil's provision of a library, a mere $100 per annum which can be spent on something else within the community (and it is my contention that public libraries in Australia free up more than $100) you will be running at something between a 5:1 and a 10:1 return on investment, without taking into account the waste-disposal savings, the savings realised by distributing council information through libraries, and the benefits which accrue to a community which has access to life-long learning and culture -transference opportunities.

Conclusion

Replacing a usage and efficient management focus in performance reporting with a return value focus requires some planning, but is not in itself difficult. When it is fully in place it makes reporting both simpler and more effective. Telling senior decision-makers the number or percentage increase in loans and users is neither as clear nor as powerful as telling them that the organisation obtained a return equivalent to four, eight , or ten times its investment in the library.

References & Notes

1. Robin Woods.  What's in it for me? A marketer's guide to establishing and equal partnership with customers. New York, American Management Association, 1993. p 4.
2. ibid, p 29
3. Graft is an English slang word meaning work
4. Michael Dixon writing in The Financial Times, 17 February 1988.
5. Information provided by Rishpal Singh Sidhu of the State Library of New South Wales.
6. Alfred Willis and Eugene E. Matysek, Jr. 'Place and the functionality of reference services from the perspective of Total Quality Management theory', LIBRES 2(8), August 1992. ftp://ftp.curtin.edu.au/pub/libres/LIBRES2N8/featurearticle.txt  (Link updated 26 February 2005)
7. Susan Mendelsohn, 'Making money - forget it!' Library Manager Issue 1, November 1994 Electronic version http://info.learned.co.uk/Oh/libman/backlist/1money.html
8. Judy Quinn and Michael Rogers. 'Study shows hospital libraries save lives,' Library Journal October 15 1991 p 12.
9. 19.2% of surveyed physicians said information provided by medical libraries contributed to their ability to avoid patient mortality; 21.2% to avoiding surgery, 49% to avoiding additional tests and/or procedures, 19.2% to reduced length of hospital stay and 11.5% to avoiding hospital admission. 80.4% of physicians reported that library information led them to handle some aspect of the care of their patients differently, 71.6% changed their advice to their patients, 29.3% changed diagnosis, 50.5% changed tests, 45.2% changed drugs.