Library database vendors need customer loyalty incentive programs

What's in your wallet?

What’s in your wallet?

When I shop at  Kroger  I get coupons toward future grocery items and points towards gasoline discounts.   When I buy with my American Express Card I get  airline mileage points for my purchases. When I visit a coffee shop, I get a stamp towards a free cup.  Gamestop gives me points towards my next video game purchases and extra discounts on used games.  All of these are ways that companies reward me for frequently doing business with them.  And it works.  It’s also the reason my wallet looks like George Costanza’s.

Why do companies do this?   They do this because in a highly competitive environment, it is important to hold onto your best and most loyal customers (this post won’t cover the information gathering of big customer data — another topic entirely).  If you’re not happy with the way the company is doing business, or another company has a better deal, then you can easily find another coffee shop, grocery store, or credit card.  As consumers, we have lots of choices, and companies who are successful reward their loyal customers.

In the library world, the major companies that we deal with are database vendors.  Unfortunately, most library database vendors reward loyalty by *only* increasing our subscriptions 5% instead of 10% each year. For non-library folks, library budgets generally increase at 0%.  I understand the vendors’ side of the argument that they need to keep up with inflation, they’re adding new content, designing new services, refreshing interfaces, etc., and all of that adds to the additional overhead.  In some cases they are providing good value to justify the price increase.  In other cases, the “added value” doesn’t match the cost of the increase. Regardless of our opinion of the increase, libraries only have two choices — pay up or cancel.

The problem is libraries can’t go to another coffee shop or do our grocery shopping somewhere else.  These database vendors have a corner on the market, and they know it. As such, they don’t really have to reward our loyalty because we likely have no other choice of who to do business with.  However, as budgets get tighter and prices get higher, libraries are going to need extra incentives to keep doing business with vendors.  They need to reward their most loyal customers in more creative ways than just giving us extra pens and tote bags.  (Side note:  Bring back the good, thick, nylon tote bags.  Ever since the green movement, tote bags have gotten very, very cheap, flimsy, and boring).

One suggestion is that database vendors offer discounts for years of longevity.  While many vendors have multi-year deals that are lower than the cost of their usual annual increases, many university budget offices will no longer permit paying up front for services.  These multi-year deals, if negotiated without an “out” option, may tie the library to a service they can’t afford when budgets go south.  Rather than require libraries to pay for these discounts up front, database vendors should reward us for staying with them for the long haul.  For example, if a library has been with the vendor for 3 years, a longevity discount of 2 percent could be deducted from the annual 7 percent increase.  Once the library reaches 5 years or another tier, the longevity discount could be increased.

Another suggestion is for vendors to give credits for additional purchases within the longevity program.  Many of our business research databases sell one-off reports, or have additional reports, ebooks, etc. within modules that aren’t included in our subscriptions.   After being a loyal subscriber for concurrent years, vendors should award libraries with bonus bucks. (I’m trademarking Ebsco Bucks, Ebrary Bucks, Ibisbucks, Gale Bucks, Mintel Bucks, and more,  shortly after writing this post ;-) )  Theses bonus bucks could be used to purchase reports, ebooks, or other content that aren’t included in the subscriptions (at a heavily discounted academic price, of course).  To take this one step further, vendors could really keep us as customers if these bonus bucks could roll over (AT&T anyone?) each fiscal year.  I do realize that this would create another level of accounting on their part, but I’m pretty sure my account reps – who with the exception of a handful (Sara, George, Steven, & Sean, thank you! ) I only hear from at renewal time anyway – could handle it.  If I knew I had additional bonus bucks tied up with a particular vendor, and my library was being continually rewarded for my loyal business, then I would be a lot more inclined to renew each year.  Those price increases would be a little bit easier to swallow as well.

The bonus bucks could also be tied to tiers of database usage as well.   Vendors love to tell you how much their content is used (especially when you threaten to cancel), and librarians are the ones who can drive database usage by pointing students, faculty, and patrons to the resource.  Librarians also have their favorite resources as well, and might be more inclined to point their patrons to a new favorite resource if it offered bonus bucks tied to usage.  As usage for a particular resource increases, libraries are less likely to cancel a resource, especially when faculty, students, and patrons learn to  depend heavily on that database.  On the other hand, when library budgets don’t keep up with the costs of annual subscription increases, the databases with the least amount of use often get cut first.

Our next fiscal year begins in a few months, and once again we’ll be asking the question “is it worth it to renew?” on a regular basis. I’d love to see vendors roll out some creative incentives to keep our library’s business.  How about you?

 

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