Magazine article Online

Chargebacks: Solution or Setback?

Magazine article Online

Chargebacks: Solution or Setback?

Article excerpt

It is of utmost importance to remember that when the library moves to chargebacks, it is essentially becoming an explicit internal vendor.

Late last year, Outsell's staff was inundated with inquiries about implementing chargebacks. Unfortunately, for many of our clients, the questions came too late. Chargebacks require planning and careful implementation. Rolling them out in the middle of the fourth quarter as a preemptive or reactive budget move over-simplifies a delicate and complicated issue. In a world where end-users are increasingly expecting their content for free (it's on the Internet, they say) chargebacks in a non-chargeback culture can be explosive. Any plan to implement charging has the potential to create a major internal debate, followed by many dissatisfied clients. With proper planning, analysis, and communication, the pitfalls can be overcome and the result can be highly gratifying.


We sound like a broken record, but this is a theme you'll always hear from us. It is of utmost importance to remember that when the library moves to chargebacks, it is essentially becoming an explicit internal vendor, more than ever. The process needs to be approached just as any vendor would approach a pricing decision. Implementing pricing decisions on the fly can really upset a marketplace--remember the upset Dialog created? It is doing many wonderful things these days, yet the pricing misstep still clouds its progress. And no one needs clouds these days.

In essence, the information center becomes a business (usually mandated as not-for-profit), and the key activities of a business plan are musts. It doesn't mean that all users need to be marketed the same services, however. Step one is to perform your needs assessments, and target specific services to specific groups of users. Formalize your "product list" and prevent service creep. When you start getting demand for new things, determine if there's a broader market and roll it out--adding it formally to your menu and letting your internal customers (the one's you think will be most interested) know.

Chargebacks alone create a purchase decision between you and the customer. You want to minimize that as much as possible because it creates a barrier every time they want to use your services. Being too busy is a good thing in light of the reverse. Key to chargebacks is two overarching rules of thumb:

1. Make it easy

2. Tie it to the value proposition of what you're offering

Free reference might be de rigueur in the era of user-friendly Internet searching. Charge for staff participation on teams or in-depth analysis that takes a literature search to an entire new level of support and value-add. Do-it-yourselfers might be willing to pay for training or content deployed to their desktop. Be creative, and don't be all things to all people.

The needs of the potential customers (users) must be understood in advance. Products must be assigned a cost (vendor charges, personnel, overhead) and a value (selling price or chargeback amount). Although it may not be possible to move to a fully charged-out operation, it is necessary to manage the "business" as though that is the objective. The total cost of the entire operation must be accounted for. This cost should roughly equal the individual rates that will be charged for each product or service multiplied by the forecasted demand for each product.

Ultimately, just as in any other business, your clients will "buy" your services as long as they perceive they are getting good value for the price paid (charged). This means that they will compare your prices to other options. You should examine each of your client's options just as a business should evaluate its competitors. Possible options might include doing it themselves, having another group within the organization perform the same work, or contracting with an outside firm to do the research. …

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