Upsize
This! Libraries Need Relationship Marketing
by Larry X. Besant and Deborah Sharp
What do libraries have in common with John
Deere tractors, Mary Kay cosmetics, Harley-Davidson motorcycles, and Prada
haute couture? Regrettably libraries have no special link with these diverse
businesses, which share a common business reputation for top satisfaction
ratings from their customers. Along with many other businesses, they each
appear to have committed to relationship marketing (RM), a deceptively straightforward
switcheroo on traditional marketing methods.
The lead of a 1998 Harvard
Business Review
article put it provocatively, "Relationship marketing is in vogue. Managers
talk it up. Companies profess to do it in new and better ways every day. Academics
extol its merits. And why not? The new, increasingly efficient ways that companies
have of understanding and responding to customers' needs and preferences seemingly
allow them to build more meaningful connections with customers than ever before.
These connections promise to benefit the bottom line by reducing costs and
increasing revenues."
What is relationship marketing? It is a
mutual interest between company and customer. It is not a new concept. In
fact, it is as old as the merchant trade itself. It is the demonstration of
a deep and abiding regard for the customer and this is displayed in the product
and services sold, in the interaction between company and customer, company
and potential customers, company and suppliers, and so on. And in this case,
the word company encompasses every employee that represents that company.
It transcends the product or service being sold.
Why have libraries not jumped on the RM
bandwagon as they have jumped through the hoops of other business fads such
as total quality management (TQM)? The disjoint may be because librarians
have never really "got it" about traditional marketing methods, never mind
newfangled relationship marketing, which is only about two decades old. As
our very own management guru, Herb White, stated in Library Journal,
". . .it should be fairly clear that librarians do not market and that they
never have marketed." He concludes, "What we need to tell people is not how
wonderful our public libraries are but rather how wonderful they could be.
The awakening of these dreams is the purpose of marketing..."
The purpose of this article is to introduce the topic of relationship marketing
to the library audience.
We believe that Herb White is right. All
libraries, not just public libraries, have been inept marketers. Traditional
library marketing methods are mired in transactional muck; the number of items
circulated, the number of searches performed, the number of documents ordered
and so on. The transactional marketing approach places the emphasis on quantity
vs. quality; on the product rather than the customer. Relationship marketing
emphasizes customer retention and long term customer relationships.
A PARADIGM EXCHANGE
The flood of business verbiage and pontificating
about marketing is enough to dissuade even the most dogged MBA, let alone
a librarian seeking a businesslike way over troubled waters. For example,
the American Marketing Association formidably defines marketing as: "the process
of planning and executing the conception, pricing, promotion, and distribution
of ideas, goods, and services to create exchanges that satisfy individual
and organizational objectives." Adrian Payne, a RM pioneer, pinpoints the
elemental difference between RM and old-fashioned marketing this way, "Traditional
marketing has been about getting customers. Relationship marketing addresses
the twin concerns - getting and keeping customers." A working definition of
RM is more elusive.
Christian Gronroos addresses the concept
in this way: "Marketing
is to establish, maintain, and enhance…
relationships with customers and other partners…
so that the objectives of the parties are met. This is achieved by a mutual
exchange and fulfillment of promises."
Tony Cram's definition is that, "Relationship Marketing is the consistent
application of up-to-date knowledge of individual customers to product and
service design which is communicated interactively, in order to develop a
continuous and long term relationship, which is mutually beneficial." Ian
Gordon proposes that, "Relationship Marketing is the ongoing process of identifying
and creating new value with individual customers and then sharing the benefits
from this over a lifetime of association. It involves the understanding, focusing
and management of ongoing collaboration and sharing through interdependence
and organizational alignment."
A useful précis of RM may be the
conclusion of an article by Tim Ambler titled misleadingly, "Building Brand
Relationships," in The Complete MBA Companion (1997). "Brand
equity and relationship marketing, in various forms, have emerged from the
1980s as key concepts, fundamental to all forms of marketing. The two are
linked in that both shift attention from short-term transactions and immediate
profits toward a process of creating value through building and managing a
network of value-added, long-term relationships. In this perception, marketing
is the function of building brand relationships. This network can also be
seen as the store of future profits." Ambler's punch line delivers much for
librarians to ponder. "Following this paradigm, practitioners are advised
to identify the network of their brand's relationships. Resources (money,
energies and time) should be focused on those relationships that are more
important and/or more capable of beneficial change. The impact of these activities
on relationships should then be tracked, directly and indirectly, in a consistent
fashion over time."
How Well Does Your Marketing Plan
Work?
The library literature, as White so trenchantly
notes, is replete with articles, books and how-to-do-it manuals earnestly
attempting to deal with marketing the library and its services. Unfortunately,
the best of these contributions are, in our opinion, superficial. Planning
and marketing manuals for libraries are intended to be grounded in business
marketing and planning principles. But most fail to meaningfully deal with
the complexities and peculiarities of libraries, library users and information
seeking behavior. The Winter 1995 issue of Library Trends
is devoted to "Marketing of Library and Information Services." ALA offered
a 1998 text entitled, Future-Driven Library Marketing. We
believe that these publications confirm our pessimistic view of the state
of library marketing.
A thoughtful study of Australian special
libraries reached the following negative conclusion: "In practice, though,
very few libraries undertake formal marketing planning and prepare marketing
plans. The most commonly used element of marketing is still promotion. …
This view suggests a lack of understanding of the marketing process, of which
promotion is but one element."
If we don't understand traditional marketing applications after half a century
of John Cotton Dana Awards, can we hope for the timely adaptation of RM by
libraries?
Ambler asserts that, "Relationship marketing has emerged in a number of guises. It is not just another form of marketing. . . .Rather it is a way of understanding marketing itself." Can there be a more straightforward way to create a vigorous library of value to users than by understanding and cultivating relationships with users? Whether library users are referred to as customers or patrons or clients may, or may not, be an important psycholinguistic clue to the extinction or survival of libraries as we know them today. But whatever the nomenclature, users are the most basic ingredients in a working library.
The devil here is not IN the details. The
devil IS the detail of how to think and act about what constitutes the bottom
line for libraries. Libraries' relationships may be the yardstick needed to
plan and measure our future. Just measuring user encounters or transactions
isn't getting the job done for libraries anymore. The Dynamics of
Service by Barbara Gutek is a good starting point to begin thinking
about library service and RM. The book's goal is, "...to describe and explore
relationships and encounters as social mechanisms for delivering goods and
services to customers." Gutek discusses encounters versus relationships and
notes that "Encounters
allow people to slip into anonymity…
" and argues against pseudorelationships
that are simply an attempt to personalize an encounter. The true value of
RM is in building real relationships and not pseudorelationships. In other
words, not simply giving lip service to the idea. A cardinal tenet of RM applied
to libraries would be that relationships, broadly defined, thoughtfully categorized
and painfully prioritized, become the engines for achieving the library's
main values or contributions to the parent institution's purpose.
The essence of RM as it might apply to
libraries is best summarized by Payne, who generalizes three characteristics
distinguishing RM from "transaction marketing," as he labels marketing which
is focused on new customer acquisition: (a) "A move from functionally-based
marketing to cross-functionally based marketing." (b) "A shift from marketing
activities which have an emphasis on customer acquisition to marketing activities
which [emphasize] customer retention." (c) "An approach which addresses a
total of six key markets, not just the traditional customer market." Payne's
use of the term "markets" may here be taken as "relationship categories."
In his "six markets model," he says, "Customers must, of course, remain the
prime focus area for marketing activity." Payne's other five relationship
categories are internal markets, supplier and alliance markets, referral markets,
recruitment markets and influence markets.
Since the 1960's, the most widely taught
marketing concept was the marketing mix theory: the 4Ps (product, price, place
and promotion) - so clean, so neat, so inappropriate for libraries. Marketing
theory cannot always be so succinctly described since relationships are by
their nature complex. Evert Gummesson, a Swedish RM pioneer and theorist,
takes this into consideration as he points out that relationships "are composed
of many qualities, they can partly overlap." He has strummed the marketing
complexity chord by expanding the 4Ps to the 30Rs and writing a book about
the latter (where R = 30 "tangible relationships that exist in business and
other organizations"). His definition of RM is "marketing seen as relationships,
networks and interaction."
RM is based on a notion of trusting cooperation
with known customers. This is the basic concept of a library. A library operates
routinely with a known set of customers. If the library does not know your
name and address when you walk in, they will know it when you try to establish
a relationship with them by asking to borrow a book. A library also operates
on trust. When you walk into a library, you trust that you will find or someone
will help you to find the material or information that you need. The library
in turn, trusts that you will return the items you borrow within the specified
borrowing period.
Is our relationship-rich profession being
eroded by encounter-based management philosophies? RM can possibly help counter
the trend of disintermediation of librarianship by the WWW. Steve Coffman
writes in American Libraries,
"Perhaps the primary experience people look to 'buy' at their public libraries
is a personal relationship with a staffer." Libraries are built around relationships
with booksellers, database providers, library consortia, and of course, our
customers. Customers are why libraries exist. It follows then that the way
to create a dynamic library organization is by understanding and cultivating
customers. Relationship marketing looks to be an obvious fit for libraries.
20 WAYS TO LEAVE YOUR OLD PARADIGMS
How then can we begin to incorporate relationship
marketing into the librarian'
s psyche? We must first understand exactly how it relates to libraries. In
order to help visualize relationship marketing in libraries, we have combined
the two different models developed by Payne and Gummesson and placed them
within the library context.
Payne, Peck, et al. have created a structure
for understanding the concept of relationship marketing as the interplay among
6 different markets. Gummesson has compiled a list of 30 possible relationships
that could exist in a business or organization. In the following illustration,
we have merged Payne's six markets and twenty of Gummesson's 30 Rs to form
a model for practical application to libraries. For the complete list of the
30Rs see "Making Relationship Marketing Operational" by Gummesson.
I. Customer Markets
Customers are at the heart of all marketing.
But it is not only attracting new customers that is important. Retaining existing
customers is equally important. Creating loyalty in existing customers is
the ultimate goal. A loyal customer base is the best defense against budget
cuts and the best offense for expanding services.
The relationship between library and customer.
R1
The service encounter: interaction between
the customer and front line personnel. We do this every day. R7
The electronic relationship. An important
volume of marketing today takes place through networks based on IT. Libraries
were in the forefront here until the advent of the Web and the succeeding
commercialization of it. Could also be included under Influence Markets.
R13
The relationship to the dissatisfied customer.
"But I returned that book on time!" R26
The knowledge relationship. Knowledge can
be the most strategic and critical resource and "knowledge acquisition" is
often the rationale for alliances. R28
II. Internal Markets
Internal markets are the employees and
departments within the library. There are both internal customers and internal
suppliers within the library organization. A good working relationship among
all departments and employees is essential for the smooth operation of the
library.
Market mechanisms are brought inside the
company - profit centers in an organization. Document Delivery for profit.
R6
Interfunctional and interhierarchical dependency:
the relationship between internal and external customers. Bringing departments
together through teams. R8
The relationship among library employees.
R10
III. Supplier & Alliance Markets
Supplier and alliance markets refer to
relationships with sources of organizations raw materials and basic equipment
or systems. Library collaborations rather than adversarial negotiations with
publishers, system vendors, and booksellers are becoming more and more commonplace.
The easy trick is folding these relationships into a marketing plan. The hat
trick is changing attitudes, adopting new approaches, and defining new ways
of rewarding these relationships. In this connection, "defining" probably
means, "contracting."
Alliances and collaboration between companies.
OCLC, consortia among libraries. R5
Physical distribution: the classic marketing
network. R12
The relationship to the customer's
customer. e.g. vendors of info products. R19
IV. Referral Markets
Referral markets are the groups that do
marketing on behalf of the library, those who act as intermediate marketers
for it. "Word of mouth" by satisfied customers is generally accepted as the
best kind of advertising. Planning to make it happen is elusive and long term.
Thinking through the chain of referral possibilities, organizing the links
and budgeting the campaigns will yield results, but they may be a long time
coming in the real world. On the net in the cyberworld referral markets may
be fast acting, e.g. AMAZON.COM's return on their profit sharing offer for
all books sold via web pages linking to theirs.
Personal and social networks such as
exist in professional organizations e.g. SLA, ALA, state library
associations. Could also be included under Influence Markets.
R16
The mass media relationship. The media
can be supportive or damaging to the marketing. The way of handling the media
relationships is often crucial for success or failure. Don't have. SHOULD
have. R29
V. Recruitment Markets
Recruitment markets, following Payne's
model, are just that; recruiting relationships designed to attract and retain
the best people to do what needs to be done, to work in the firm or the profession
and help it "live long and prosper." "The great secret of the computer revolution
is that people now matter more to information systems than ever not less."
[Thomas H. Davenport, Information Ecology] Librarians know
this, but they continue to ignore incorporating it into their strategic plans
at their peril and their professions!
Parasocial relationships via symbols and
objects. What mental image does the library conjure and is that image
conducive to recruiting bright young librarians? R21
VI. Influence Markets
Influence markets are the people and groups
who can benefit the library, such as boards of directors, friends groups,
trustees, state legislatures, and corporate executives. It is a mistake
to think that simply by following your library's mission, the result will
be an expansion of influence.
Megamarketing: relationships above the
market proper as with governments, legislators, influence individuals. Applies
to all types of libraries both publicly and privately funded. R3
The non-commercial relationship. This is
a relationship between the public sector and citizens/customers, but it also
includes voluntary organizations and other activities. R11. Related to
R3
The library and financier relationship.
The library board of Trustee, friends of the library groups, Bill Gates!
R20
The law-based relationship. A relationship
to a customer is sometimes founded primarily on legal contracts and the threat
of litigation. e.g. Censorship or ADA. R22
The customer as member. Friends of
the Library. R25
The green relationship. Make recycling
efforts visible and easy for the customer. R27
From Concept to Reality
What some may believe to be an arcane academic
exercise is actually grounded in reality. The principles of relationship marketing
naturally intersect with many existing library relationships. Applying these
principles begins with looking differently at how we operate within our current
framework. Currently, Herb White is right. Librarians do not market and they
never have. Librarians count and report. Librarians advertise. Librarians
orient and teach. But librarians do not market. Why? Just as Ma Bell is no
longer the only phone company in town, so too
is the library. Today choices abound for information, reading, and entertainment.
Today there are alternative sources to libraries. Today, as never before,
libraries need relationship marketing.
References
Ambler, Tim. "Building
Brand Relationships."
In The Complete MBA Companion. Edited by Tim Dickson and George
Bickerstaffe. London: London Business School, Pitman Publishing, 1997.
Coffman, Steve. "What
If You Ran Your Library Like a Bookstore?"
American Libraries (March 1998): 40-46.
Cram, Tony. The Power of Relationship
Marketing: How to Keep Customers for Life. London, Pitman Publishing,
1994.
Davenport, Thomas H. Information Ecology:
Managing the Information and Knowledge Environment. Oxford University
Press, 1997.
Fournier, Susan, Susan Dobscha, Mick Dobscha,
and David Glen, "Preventing
the Premature Death of Relationship Marketing,"
Harvard Business Review (January-February 1998): 42-51.
Gordon, Ian H. Relationship Marketing:
New Strategies, Techniques and Technologies to Win the Customers You Want
and Keep Them Forever. John Wiley and Sons, Ltd. Toronto, Canada, 1998.
Gronroos, Christian. Strategic Management
and Marketing: Managing the Moments of Truth in Service Competition.
Lexington, MA : Free Press, 1990.
Gummesson, Evert. "Making
Relationship Marketing Operational."
International Journal of Service Indu stry Management 5 (5) (1994): 5-20.
Gutek,
Barbara A. The Dynamics of Service: Reflections on the Changing Nature
of Customer/Provider Interaction. San Francisco: Jossey-Bass, 1995.
Kelso, Helena. "The
Marketing of Special Libraries to Their Parent Organizations: A Study of Selected
Melbourne Institutions."
Australian Special Libraries 28 (3) (September 1995): 3-21.
Payne, Adrian. "Relationship
Marketing: A Broadened View of Marketing."
In Advances in Relationship Marketing. London: Kogan Page, Ltd. 1995.
Payne, Adrian, Martin Christopher Martin,
Moira Clark, and Helen Peck, "Relationship
Marketing for Competitive Advantage: Winning and Keeping Customers."
Oxford: Butterworth-Heinemann, 1995.
Peck, Helen, Adrian Payne, Martin Christopher,
and Moira Clark, "Relationship
Marketing: Strategy and Implementation."
Oxford: Butterworth-Heinemann, 1999.
White, Herbert S. "Marketing
as a Tool for Destabilization."
Library Journal 122 (2), (February 1997): 16-17.
Sidebars
What
do libraries have in common with John Deere tractors, Mary Kay cosmetics,
Harley-Davidson motorcycles, and Prada haute couture?
We believe that Herb White is right. All
libraries, not just public libraries, have been inept marketers.
If we don't understand traditional marketing
applications after half a century of John Cotton Dana Awards, can we hope
for the timely adaptation of Relationship Marketing by libraries?
Biographical Information
Larry X. Besant
Larry X. Besant is Director of Libraries at Morehead State University and a past president of the Kentucky Chapter of SLA. At the Ohio State University in 1973, he initiated library questions for the recurring OSU poll of faculty and students. In 1978 on the ALA Planning Committee he drafted ALA's first membership priorities survey. He prepared the first published summary of a CLR-sponsored nationwide survey of online catalog use: American Libraries, 13 (160) (1982). Morehead State in 1992 applied and analyzed the two surveys specified in ACRL's measuring academic library performance (Van House, et. al, 1990). In 1996 he co-authored a paper reporting on a survey of library attitudes of freshmen. He has served on OCLC's Information Research Grant Proposal Review Panel. His paper at SLA's Library Management Division June, 1994 program, "Transformations and Revolutions," addressed moving from transactional to transformational librarianship.
Mr. Besant may be reached via e-mail at
l.besant@msuacad.morehead-st.edu
Deborah Sharp
Deborah Sharp is Head Librarian for the Lexmark Information Center, under a contract through the University of Kentucky. She joined the staff in 1989 as Technical Services Librarian when Lexmark was still the IBM Printer Division. Lexmark was spun off from the IBM Division in 1990 and is now a Fortune 500 company. Ms. Sharp is a past president of the Kentucky Chapter and is currently serving as Secretary of SLA's Information Technology Division. Her article, Partnerships in information services: the contract library, Special Libraries, 85(2) 1994, describes the successful partnership between Lexmark International and the University of Kentucky Libraries.
Ms. Sharp may be reached via e-mail at
dsharp@lexmark.com
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