Cashing in on Service

When Salt Lake City began planning its new central library, Director Nancy Tessman and staff found the community wanted what Tessman calls "a more complete destination." They wanted a coffee shop, a place where they could purchase supplies they would need for their library trip, and more, to make their library visit seem like an event, not like an errand. As a result, the library building became "Library Square," an area dominated by a state-of-the-art library, but with rental space available for retailers and a variety of other partners.

When Ferguson Public Library in Stamford, CT, opened a 1700 square foot Starbucks within the library space, patrons saw the library as responsive to their needs. "They were thrilled," says Director Ernie DiMattia. "They saw us as on top of things…that we understood them and cared enough to respond."

Internally, there's a spirit of innovation thriving in libraries. As institutions redefine themselves in a changing competitive structure, rule-breaking and risk-taking are more pervasive. Externally, there's more expectation by local governments that all city services will find new ways to derive revenue. The most important promoters of these service shifts, however, are library patrons themselves. While shopping and food are the most popular sources of revenue, myriad new ventures are at work in libraries, providing services to patrons and giving libraries more control over their funding.

Tessman sees this melding of public and commercial space as particularly critical in connecting with younger patrons. "Younger generations are multitaskers. They can think and hear and see multiple things at once. Having multiple presences in the library gives the impression of more going on, and that's what they're looking for," she says.

As the public changes, so do funding groups. Boards, mayors, councils are more likely to support new ventures that match changing demographics. That said, getting a new program approved—one that requires a fee in a traditionally fee-free institution—can rely more on perseverance than entrepreneurship.

The hesitation to charge for services can come from more powerful groups than mayors and boards—most often it's from librarians themselves. In a profession trained to share, supporting revenue generators can seem equivalent to letting money-changers into the temple of knowledge. More compelling is the very legitimate concern that the development of revenue streams is a slippery slope that can lead to selling off the public good.

Consistently, libraries that are engaged in entrepreneurial ventures define a line they won't cross—one that keeps revenue generation as a sideline activity that enhances rather than directs the mission. "You can succeed too much and move away from public funding for public services," says Tessman. "Libraries cannot be left to the vagaries of the marketplace."

Protecting the library from the marketplace means evaluating new ventures first by what they can do to enhance the primary mission of the library and looking at revenue generation second. Once that priority is clearly established, it becomes easier to identify new ventures that benefit the library and the community, ones that establish effective partnerships without stepping over the line.

Charging for a service nearly always means adding convenience for the community. Book rentals for hot new releases have allowed libraries to purchase larger stocks of best sellers, reducing waitlists for all patrons. More captivating are the stories of innovative programs that enrich community services. For example, Ferguson has a full-service passport office within the library. It started "innocently enough," DiMattia says, when the library agreed to take the overflow from the passport office across the street. However, community members found the library's environment and hours of operation made for a service that was significantly superior. As a result, over its six years of operation, the program has grown steadily, with Ferguson now processing more than 8000 passports a year. In 2003, the library added a photo service and now manages two-thirds of the passport photos, as well.

Ferguson's program required staff and space and couldn't have been handled by the library without fees. The program generates more than $250,000 annually, but DiMattia says the more important issue is the value it has in the community.

Because Americans often place a higher worth on things they pay for versus those that are free, fees can add luster to a program. Jane Light, director of the San José Public Library (SJPL), tells a story of ensuring the success of a class aimed at teaching slick searching skills to area businesses by adding a price tag. "We all agreed we would have to charge for the class so that businesses would attend," says Light. "If the class were free, they wouldn't think it was worth it."

Successful entrepreneurship—ventures that enhance the image of the library and earn money—often lies in the library's ability to find and exploit the venture's connections to the library's charter.

Tessman says when Salt Lake City was filling the rental space in Library Square, the approach was not about making rental deals but about identifying tenants that would extend the mission of the library. For example, the florist in Library Square teaches classes on gardening and flower arranging. NightFlight Comics has built a literacy program centered on graphic novels, and the Salt Lake Film Center has weekly screenings of high-quality documentaries in the library auditorium. Tessman sees these tenants as partners and as important deliverers of information. She values "the connections they bring to who we are and what we do."

Los Angeles Public Library rents use of the library to film crews, supporting an important regional business, generating revenue, and earning exposure. The library is seen in movies and TV shows, but, more importantly, members of the community (actors, crews, directors) spend time in the library and develop a new emotional investment in it. Though The West Wing may not be banging on the door of most libraries, drawing new patrons is a universal goal. Ferguson pulls patrons from nearby New York State who originally came for a passport and now return to enjoy the library's more traditional services. At Farmington Community Library in suburban Detroit, businesspeople grabbing a sandwich at the library's café enjoy the building during their lunch hours. These ventures provide added meaning as the library connects with patrons on a new level.

Even space rentals can build a new connection to the community. After-hours lease of the library for community events—for instance, Salt Lake Public Library is the site of an upcoming high school prom—creates "community common ground," says Tessman. "When public space is used for important rituals, you build a feeling of openness and community ownership."

Librariy buildings that lack the architectural cachet that makes for swank events don't have to be left out of the space rental business. Take a close look at the library. A display case that's a perpetual annoyance because you need to rotate what's in it could be removed to make way for a coffee and bagel stand. Think how the atmosphere in the library changes when parents can have a latte while they supervise their child's homework or research. Would it be similar to Ferguson's experience, where patrons felt the library was tuning in to their needs?

No space? There are a variety of ventures at work in libraries. Kern County Public Library's, CA, Pennies for Periodicals has added more than $100,000 to the library's coffers by selling donated magazines for 25¢–50¢ each. Friends run the program much like a book sale, with startling success that Director Diane Duquette attributes to the enthusiasm of those managing the program. "The Friends keep the magazine collections current from an enormous amount of donated new magazines, and it fits our populace. Many have limited time to read these days—it's easy to pick up a magazine and finish it, while books take so much longer. And what a deal!"

Now a systemwide revenue generator, the logistics of Pennies for Periodicals vary to match the needs and capacity of the branches. Smaller facilities use the magazine sales to augment Friends' book sales. Larger buildings have dedicated space for ongoing sales of both books and magazines. In each branch, Friends manage sales and collection of the magazines.

There's much to be learned from Pennies for Periodicals, from concept to execution. The idea came from a board member, and though Duquette had initial concerns about its worth, the program was given a green light because its risk could be controlled. It required little investment—in either staff time or expense—and could be tried on a small scale in a single branch. Further, the program fit with the library mission and the needs of the community.

Part of the appeal of Pennies for Periodicals was that it could be implemented without interrupting normal library operations. But service disruptions may also signal opportunity. When SJPL launched a revolutionary new service model focusing on what Light calls "The Four Cs—Comfort, Convenience, Choice, and excellent Customer Service," librarians from around the country began visiting to learn how the model was being implemented. Tours and discussion soon became too much for staff to handle. Rather than call a halt to the visits, Light spotted an opportunity for a consulting business. "Libraries the San José Way" introduces library professionals and their stakeholders to the San José service and building models through a series of learning modules. Services include structured presentations describing philosophy, strategy, and implementation issues, as well as hands-on consultation. Guided tours included in the program—unique because they're specifically for library administrators—focus on how the library environment affects the service model and give a first-person look at the model in action.

Implementing fees for a program that has been traditionally free is dicey. San José provides a good model for how to do it successfully. It selected a venture that was tangential to normal library operations rather than one that was dead center. More importantly, it used the fee to create a more robust service—casual tours and discussions have become structured learning programs that customers feel comfortable exploring to their fullest. "The fee gives our customers the license to get the most out of this program," says Light.

Parallels in other libraries are services that are used by small groups but are outside the traditional purview of the library or at least near the edge. A service that the library has dropped—or is considering dropping—because of its annoyance level could be a great opportunity for an expanded, fee-based service.

Pricing strategy can be a challenge to an industry that's used to sharing. Partners are a tremendous resource in determining market rates. In cases such as coffee shops and bookstores, prices are fairly straightforward.

However, unusual programs take a more thoughtful approach. First, establish a market rate for similar ventures, then add or subtract based on the goals of the program. For example, "Libraries the San José Way" is priced by learning module, with no limit on the number of people attending. The pricing structure takes into consideration that libraries interested in adopting the San José method may need to convince important stakeholders. Pricing by module allows them to bring along these opinion leaders.

Also consider cost recovery, which can be hidden. For example, after-hours rentals take a toll on buildings, and getting the library back in shape for the day's operations after an evening party can be monumental. The cost of insurance and security personnel to protect both the building and the collection during the event—as well as the cleaning crew—must be built into the price. An essential rule of thumb is to identify hidden costs by testing all new ventures on a small scale.

Nearly all libraries have a store of ideas or at least an itch to try a venture that earns them some additional funding security, but inertia or lack of time gets in the way. Kern County's Duquette suggests getting the momentum going by brainstorming with staff, board members, and Friends groups.

Let the question be, "What would make the library a better value, a better experience, and more responsive to users?" Functioning as a mantra, it's the kind of question that can propel the library forward by identifying missing services and waiting opportunities. "Be resourceful, creative, and take the initiative," encourages Duquette. "Give others the opportunity to succeed by testing out their ideas. Take risks. Go for the gold."