December 6, 1995 - library as great value

Imagine that you inherit a business franchise -- a video rental shop. It has a pretty good inventory -- about 65,000 items (some a little battered), scattered among 3 locations, none of which is open more than 5 days a week, and some of which are open only a couple times a week. You don't have a lot of visibility, but do have a solid customer base -- about 60% of the service area -- which checks out about 350,000 videos a year.

Now imagine that it's five years later. Now you've got 220,000 videos, and a transaction level of a cool million annually. You're running 4 shops, 7 days a week, and 4 more twice a week. You've extensively renovated two of the original locations, and expanded the square footage of a third location by a factor of three. At the end of this period of phenomenal growth, your costs -- including personnel, facilities, all your overhead -- are just under $3 per transaction. An astonishing 72% of your target market has come in, registered for membership, and used your service in the past year.

Now add a new wrinkle: you don't charge by the transaction. You charge a membership, a flat fee based on the value of your customers' house: about $40 for a house worth $100,000. The cost of this membership has dropped each year. But for this fee, the customer (and anyone in his or her family) can rent as many videos as he or she wants. There's no limit at all. Beyond that, you offer a complement of other services, among them:

* terminals that let the customer search for and reserve any titles of interest

* connections to other computerized video rental systems that allow the customer to request items you don't have in stock, which will be purchased or delivered at no charge to the closest location, often within just a day or two

* friendly, knowledgeable, and efficient staff members, available some 68 hours a week in person or by phone, who are prepared to answer detailed questions about any of the videos in stock, or any of the issues or times they deal with

* a comprehensive collection of periodicals and reference works about videos, available either for rental or on-site consultation

* programs that provide live performances or interpretations of popular videos for people of all ages (with an emphasis on children)

* discussion groups concerning various videos in the collection

* comfortable surroundings in which the customer can view any of the videos in quiet privacy, or in groups

all of which (and more) is included in the membership fee. In fact, many of the services (answering questions, programs, in-house use) are offered to people who may not even have a membership card.

Ridiculous, isn't it? What business could possibly achieve such impossible levels of service at such a low price?

Welcome to your local public library.

Substitute "video rental" with "public library," replace "video" with "collection of materials" and every one of the above statements reflects the accomplishments of the Douglas Public Library District over the past five years.

A few weeks ago I talked about the ways in which public service differs from "customer service." I believe this: the public library is a public good, accessible to the lowliest and the highest among us without distinction. That's important.

But as the record shows, the public library is also a staggeringly cost-effective business. It delivers a cold cash value, a return on the investment, that is unparalleled.