Creating customer value in the not-for-profit sector: a case study of ...

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Creating customer value in the not-for-profit sector: a case study of ...

Int. J. Nonprofit Volunt. Sect. Mark. 10: 183–195 (2005)Published online in Wiley InterScience(www.interscience.wiley.com). DOI: 10.1002/nvsm.18Creating customer value in thenot-for-profit sector: A case studyof the British LibraryGary Warnaby 1 * and Jill Finney 21 Senior Lecturer, School of Management, University of Salford, UK2 Director of Strategic Marketing and Communications, The British Library, UK* Public sector organisations are being increasingly subjected to both legislative andcompetitive pressures forcing them to reconsider their relationships with users andcustomers (Chapman and Cowdell, 1998) in order to develop a more overt marketingorientation (defined as focusing on customer needs as the primary drivers oforganisational performance (Jobber, 2004)). The creation of customer value underliesthe development of a meaningful marketing orientation, and is a nettle that more publicsector and not-for-profit organisations will have to grasp. This article considers how a moremarketing-oriented approach was adopted by the British Library in order to clarify andcommunicate its value proposition to its identified target markets, and in doing so,hopefully achieving a sustainable competitive advantage on an ongoing basis.Copyright # 2005 John Wiley & Sons, Ltd.Research context: the marketingconcept, customer value andmarket orientationDefinitions of the marketing concept emphasisethat the achievement of corporate goals isaccomplished through meeting and exceedingcustomers’ current and potential needs moreeffectively than the competition (Doyle, 2002;Jobber, 2004; Palmer, 2004). According toJobber (2004) the application of the marketingconcept requires three conditions: customerorientation, integrated effort and goal achievement.These conditions should not exist onlywithin the marketing function—Doyle (2002)describes ‘marketing’ as ‘a philosophy for the—————* Correspondence to: Gary Warnaby, Senior Lecturer,School of Management, University of Salford, TheCrescent, Salford, Greater Manchester, M5 4WT, UK.E-mail: G.Warnaby@salford.ac.ukwhole business’, which ‘integrates the disparateactivities and functions which take placewithin the organisation’ (p. 61).The operationalisation of the marketingconcept can be accomplished through theexistence of a market orientation (McCarthyand Perreault, 1997; Heiens, 2000; Foley andFahy, 2004). Kohli and Jaworski (1990) identifythree common constructs that underlie a marketorientation (see also, Dalgic, 2000; Lambin, 2000):(1) The organisation-wide acquisition/generationof market intelligence/informationpertaining to current and future customerneeds;(2) Dissemination of this market intelligence/information across departments within theorganisation and(3) Organisation-wide responsiveness/coordinatedcreation of customer value.Copyright # 2005 John Wiley & Sons, Ltd. Int. J. Nonprofit Volunt. Sect. Mark., August 2005


184 G. Warnaby and J. FinneyThe creation of superior customer valueshould arise from a market orientation(Slater and Narver, 1995; Cravens et al.,1997; Cravens, 1998), and this in turn should,in combination with other organisationalcapabilities (Day and Wensley, 1988; Foleyand Fahy, 2004), allow the organisation todevelop competitive advantage.Synthesising earlier definitions (Shapiro,1988; Kohli and Jaworski, 1990; Narver andSlater, 1990; Deshpande et al., 1993), Day(1994a) identifies similar interrelated featuresof market orientation:A set of beliefs that puts thecustomer’s interests firstMarket orientation focuses the organisationexternally on the market as a fundamental basisfor strategy development (Cravens, 1998).Responsibility for this encompasses all membersof the firm (Webster, 1988; Cravens, 1998;Lambin, 2000). Thus, as mentioned above,marketing should become an organisational‘philosophy’, thereby increasing opennessto trends and events and the recognition thatthey provide market opportunities (Dalgic,2000; Foley and Fahy, 2004). The role of seniormanagement in inculcating such an outlook iscrucial (Webster, 1988; Kohli and Jaworski,1990; Jaworski and Kohli, 1993; Dalgic, 2000).The ability of the organisation togenerate, disseminate and use superiorinformation about customers andcompetitorsKohli and Jaworski (1990) regard marketorientation as essentially an informationalconstruct. The link between market orientationand the development of a learningorientation (defined by Fiol and Lyles (1985)as the process of improving action via betterknowledge and understanding) is recognisedby various authors (Fiol and Lyles, 1985;Day, 1994b; Slater and Narver, 1995; Cravenset al., 1997; Cravens, 1998; Foley and Fahy,2004). This encompasses more than traditionalmarket research activities (Cravens, 1998),to include open-minded inquiry, synergisticinformation distribution, mutually informedinterpretations and an accessible organisationalmemory (Day, 1994a,b). Again, this isthe responsibility of all organisational members(Cravens, 1998), and Day (1994a) identifies this‘market sensing’ as a crucial organisationalcompetence (see also, Foley and Fahy, 2004).The co-ordinated application ofinterfunctional resources to thecreation of superior customer valueAll of the above require a major organisationalcommitment with implications for organisationaldesign and change (Day, 1994b; Slaterand Narver, 1995; Cravens et al., 1997; Cravens,1998; Dalgic, 2000; Lambin, 2000; Foley andFahy, 2004). This can be both in terms oforganisational structure and also the developmentof a shared philosophy and processes—what Day (1994b) has termed ‘learning tolearn’ (p. 23).Shapiro (1998) argues that the terms marketand marketing orientation are often usedinterchangeably. Lambin (2000), however,distinguishes between them. He states thatmarketing orientation focuses on marketing’sfunctional role in co-ordinating and managingthe elements of the marketing mix to make afirm more responsive to meeting the needs ofits customers, whereas a market orientationhighlights the role of all members of theorganisation in developing customer relationsand enhancing customer value. Liao et al.(2001) state that there is some degree ofconsensus that the term ‘market orientation’is to be preferred as it implies the participationof all members of the organisation.It has been argued that market orientation isoverly externally oriented in that it does notfully recognise the utility of internal resourcestrengths and capabilities (Lings, 1999). Indeed,various authors (Hollensen, 2003; De Wit andMeyer, 2004) contrast market oriented andresource-based perspectives in the planningand implementation of marketing and corporatestrategies. Hollensen (2003) describesthe resource-based view (also known as theCopyright # 2005 John Wiley & Sons, Ltd. Int. J. Nonprofit Volunt. Sect. Mark., August 2005


Creating customer value in the not-for-profit sector 185‘inside-out perspective’), as the ‘proactivequest for markets that allow exploitation ofthe firm’s resources’ (p. 30). Here, a keystrategic issue is the acquisition and developmentof difficult-to-imitate competences andexclusive strategic assets (De Wit and Meyer,2004) as a fundamental source of competitiveadvantage.In contrast, De Wit and Meyer (2004) arguethat the market-oriented (or ‘outside-in’) perspectiveargues that firms ‘should not be selfcentred,but should continuously take theirenvironment as the starting point when determiningtheir strategy’ (p. 250). Thus, the firm’sresources are adapted to meet market conditionsand the competitive environment. However,regarding the choice between marketorientedand resource-based perspectives asdichotomous would be an oversimplification.Hollensen (2003) advocates a ‘value chainbased’ view of strategy, which incorporateselements of both as a means of ‘bridging thegap’ between them. He argues that theresource-based view ‘focuses on what the firmhas’, whereas the value-based view ‘focuses onwhat the firm does’ and also integrates someelements of the market-oriented view (whilstnot ignoring the cost of performing theseactivities) with the ultimate objective beingvalue creation (p. 40). Indeed, he definescustomer value as ‘the differences betweenthe benefits customers realize from usingthe product and the costs they incur in finding,acquiring and using it’ (p. 40. Originalemphasis).Market orientation and librariesConsideration of market orientation and marketdrivenstrategies has tended to focus primarilyon private sector profit-oriented organisations.Such issues relating to not-for-profit organisationshave been somewhat neglected bycomparison, although they are of equal applicability,albeit with modification (Liao et al.,2001). In this context, Kotler and Andreasen(1996) emphasise the importance of adopting a‘marketing mind-set’. Libraries are no exceptionto this (Lozano, 2000).From the earliest times, libraries have existedin a turbulent environment (see Battles, 2003for a historical perspective). While mostlibraries may no longer face an environmentwhere they may face physical destruction(although Battles does provide examples ofthe destruction of libraries in wartime as ameans to obliterate national cultures throughoutthe Twentieth century), there is a consensus,both among academics (Layzell, 2000;Hooper, 2001; Marcum, 2001; Rowley, 2001;Elliott, 2002) and, more recently, amongpopular commentators (Howard, 2004; Hutton,2004; MacIntyre, 2004) that libraries face aseries of factors that may affect their fundamentalraison d’etre and modus operandi.Public libraries, for example, are facing acontinued long-term decline in use (AuditCommission, 2002) and a recent report(Coates, 2004) castigates them for lack ofresponsiveness to changing customer requirementsand environmental conditions, a factorpartly attributed to weak management that hasnot been able to create ‘public value’ from thelibrary service (Audit Commission, 2002).Rowley (2001) states:‘If organisations in the information marketplaceare to survive and flourish, theyneed to be confident about their missionand role, and to be continually alert totechnological, economic, political andsocial factors that are reshaping the contextin which they seek to serve users, contributeto communities, attract and retain customers,and establish and maintain relationshipswith other organisations’ (p. xiii).In order to accommodate changing environmentalconditions (particularly relating to thetechnological environment), Benson (1997)identifies the following new roles for librarians:internet access provider; navigator; educator;publisher; intermediary; information evaluator;information organiser; planner and policymaker.However, Elliott de Saez (2002)emphasises the importance of marketing inthis context, stating that ‘if the role of marketeris not added, there will be no opportunity toCopyright # 2005 John Wiley & Sons, Ltd. Int. J. Nonprofit Volunt. Sect. Mark., August 2005


186 G. Warnaby and J. Finneytake on the other roles’ (p. 139), and Rowley(2001) argues that information suppliers,including libraries, ‘need to employ the fullarmoury of marketing concepts, approachesand tactics’ (p. xiii). However, marketing inlibraries has been described as ‘reactive’(Harrison and Shaw, 2004) in the sense thatcollections are built predominantly on the basisof internal knowledge, and marketing/promotionalactivities are used primarily to encouragethe public to utilise the collection. This isanalogous to many non-profit contexts where‘there is a tendency to place emphasis on whatthe organisation has considered most appropriatefor its market, rather than responding tomarket needs and wants’ (p. 393).Notwithstanding this, Layzell Ward (2000)states that the value of a professional approach tomarketing has been appreciated by largerlibraries, and the recognition of the need todevelop a marketing culture has been articulated(Elliott de Saez, 2002). While these advantagesare acknowledged (Lozano, 2000; Elliott de Saez,2002), there is a lack of underpinning knowledgeand skills base (Association for InformationManagement, 1992), the perception amonglibrary staff that marketing is in some way athreat (Harrison and Shaw, 2004) and a tendencyto equate marketing with advertising and(especially) public relations (Kies, 1987; Marshall,2001; Elliott de Saez, 2002). All thisreinforces the tendency in this context to thinkof marketing as a short-term measure (Harrisonand Shaw, 2004), rather than from a morestrategic perspective, as implied by the marketingconcept. The remainder of this articleaddresses some of these issues, using theexample of the British Library—long acknowledgedas one of the world’s foremost libraries(Battles, 2003; Elliott de Saez, 2002).The British Library: backgroundand historical developmentThe British Library (BL) is the national libraryof the UK. It is the library of legal deposit,whereby it receives a copy of every publicationproduced in the UK and Ireland. Its collectionscomprise over 150 million items, with threemillion new items added every year. Thesecollections include manuscripts (includingthose of major historical importance), over49.5 million patents, more than 260,000 journaltitles, over four million maps, as well as newspapers,prints and drawings and music scores.Over eight million stamps and other philatelicitems and a sound archive, with recordingsdating from the 19th century, also forms part ofthe collection. The BL also operates the world’slargest document delivery service, providingfour million items worldwide to customersannually (British Library, 2004a). The maincollections (with reference, bibliographic andworld-renowned research, and conservationfacilities and activities) are housed at St. Pancrasin London. Document supply and lendingactivities are based at Boston Spa in Yorkshirein a facility specifically converted to enabledocument delivery service processes.The BL serves a variety of user groups,including researchers, business and industry,academics and students. Over 16,000 peopleuse the BL collections each day and nearly half amillion people use the reading rooms in theSt. Pancras building annually. The BL has anextensive presence on the world-wide-weband over six million searches are generated onthe BL’s online catalogue each year (BritishLibrary, 2004a).The BL is relatively young when compared tonational libraries in other countries. The BritishLibrary Act was passed in 1972, bringing the BLinto operation with effect from 1 July, 1973.Its creation amalgamated various existinginstitutions:* the library departments of the BritishMuseum—dating from 1753 and one of thelargest libraries in the world (with theprivilege of legal deposit);* The Patent Office Library—established in1855, and became the National ReferenceLibrary of Science and Invention in 1962(a part of the British Museum Library foradministrative purposes);* the National Central Library (in London) andNational Lending Library for Science andTechnology (based in Boston Spa)—whichCopyright # 2005 John Wiley & Sons, Ltd. Int. J. Nonprofit Volunt. Sect. Mark., August 2005


Creating customer value in the not-for-profit sector 187were amalgamated in 1973 as the BritishLibrary Lending Division (British Library,2004b). 1From the outset, a key issue was the lack ofspace in the constituent elements of the BL.Rehousing the collections became a priority.After various abortive plans, a decision wasmade to build a new home to unite all theLondon-based collections under one roof, andalso provide extra capacity for future growth.The new BL site at St Pancras is the largestpublic building constructed in the UK in the20th century, with a total floor area of over112,000 sq. metres spread over 14 floors(British Library, 2004b). The progress of itsconstruction was long and arduous as thebuilding became the victim of unforeseendelays and rising costs, which attracted muchnegative media comment. However, the buildingwas finally opened in June 1998.Marketing in the British LibraryUntil recently the BL had no co-ordinatedmarketing activity (other than a small Press/PR department). There was a view that only‘commercial’ activities could be marketed.Thus, the document supply business waspromoted through attendance at various UKand international trade exhibitions. However,this activity was sales-oriented with littleawareness of margins and the actual costs ofserving customers. There was no accountmanagement structure, and widespread usewas made of agents to serve overseas markets,which were not particularly effective.The individual subject collections within thelibrary had their own separate marketing/promotional activities that were organised by—————1 In 1974, two other institutions became part of the BL.The British National Bibliography produced and publisheda weekly listing of all British publications anddeveloped a computed based system for storing andhandling bibliographic information for the use of librariesand the book trade. The Office of Scientific and TechnicalInformation was transferred from the Department ofEducation and Science to become the BL Research andDevelopment Department (British Library, 2004b).their curators. However, there was no consistencyin this activity—with the content andformat of marketing activities governed byindividual curators’ styles. Communicationtended to be ‘deep and narrow’ aimed atsubject specialists (primarily academic audiences)with extensive, detailed knowledge ofthe specific subject area. Moreover, there wasno uniformity of style. Various sub-brandsexisted relating to the various products/services offered. These were often based onacronyms, causing some confusion in theminds of the audiences, and not serving toimprove the limited awareness and understandingof what the BL as a whole could offer.Indeed, the only common communicationtheme was a logo (which itself was only usedin the main BL building—the document supplybusiness in Boston Spa had its own logo).Among senior management at the BL there wasa strong perceived need for the organisation’sidentity and promotional activity to be improvedand co-ordinated if the BL was to realisemany aspects of its mission and objectives.Mirroring the situation in many not-for-profitorganisations where marketing may not beseen as desirable, and indeed may be resisted(Blois, 1994; Kotler and Andreasen, 1996), thisinevitably created some tensions, particularlyamong those in the organisation for whomresearch and scholarship was perceived as themain raison d’etre. Particularly influentialwere the collection curators. They had to bepersuaded that the application of marketingconcepts and the implementation of moreprofessional promotional activities could be amore effective means to raise awareness andthe profile of their collections beyond theexpert audiences to whom they traditionally(and very successfully) appealed. To this end,formalised processes for submitting proposalsfor public exhibitions based on themes/materialsfrom their collections in the exhibitionspace in the public areas of the BL building atSt. Pancras were put in place. Moreover,effective marketing communications activities(including public relations activities andevents, and publications related to individualexhibitions) and an improved web presenceCopyright # 2005 John Wiley & Sons, Ltd. Int. J. Nonprofit Volunt. Sect. Mark., August 2005


188 G. Warnaby and J. Finneypromoted these collections and exhibitions farmore effectively than would have previouslybeen the case. A crucial task, however, was tomove from a focus on the subject matter ofthe specific collections towards a more overtcreation of customer value, without devaluingthe importance of the collections (which werea unique resource of the BL), in the process.Value creation and deliveryin the British LibraryThe creation of value in the minds of customersby meeting and exceeding their needs moreeffectively than competitors, as embodied inthe marketing concept (Doyle, 2002), requiresorganisations to undertake a process of valuecreation and delivery (Kotler, 2003). FollowingLanning and Michaels (1988), Kotler (2003)outlines a value creation and delivery sequencecomprising the following three stages:* Choose the value: This comprises theessential, initial ‘homework’ of segmentingthe market, selecting appropriate markettarget(s) and developing the offering’s valuepositioning—described by Kotler (2003) as‘the essence of strategic marketing’ (p. 111).* Provide the value: This comprises thedetermination of the various elements ofthe marketing mix to deliver the valuepositioning.* Communicate the value: Finally, the offermust be communicated to the target markets.This and the previous stage areregarded as more tactical in their orientation(Lanning and Michaels, 1988; Kotler, 2003).This process in the specific context of theBritish Library is discussed below.Choosing the valueAn essential first step is to develop an understandingof the market (Kohli and Jaworski,1990; Cravens et al., 1997; Dalgic, 2000), andthe BL was engaged in extensive intelligencegathering activities. As a result, in 2001, fivedifferent market sectors for the BL wereidentified—researchers, business users, education(schools), the general public and theUK library network (both public and highereducation libraries). A Head of Marketing foreach sector was appointed, reporting to theDirector of Strategic Marketing and Communications,who had been appointed earlierthat year. For each of the five sectors, furtherresearch into awareness of the BL among targetcustomers was implemented, and a specificstrategy for each target sector devised. Strategydevelopment took into account the businessenvironment, the results of user researchmentioned above (particularly in terms of theperceived competitiveness of the BL) anddefinition of the organisation’s core skills, inorder to maximise the value proposition foreach customer sector. The determination ofsuperior customer value is a key factor indeveloping a market orientation (Slater andNarver, 1995; Cravens et al., 1997; Cravens,1998). In addition, a Marketing Services department(incorporating exhibitions, BL bookshop,publications, development and fundraising) was also established.At the end of 2001 it was decided that theprocess of value creation would be facilitatedby the development of a consistent, unifyingstrategy and new brand identity in order toposition the BL more clearly. The brandconsultancy Interbrand was commissioned,which implemented an extensive researchprogramme on perceptions of the BL amongboth internal and external stakeholders. Theinternal research comprised a series of workshopsacross the organisation where staff wereasked to describe ‘their’ library in their ownwords (i.e. what they thought the BL stood for).Results from this research indicated a largedegree of consensus on the organisation’sethos, which was deemed to incorporate threekey organisational values—innovation, relevanceand pride—this last value building onthe key strength of a committed and professionalworkforce, many of whom are worldexperts in their fields. Indeed, developinginternal commitment to a market orientedapproach is emphasised by various authors(Dalgic, 2000; Lambin, 2000; Foley and Fahy,2004).Copyright # 2005 John Wiley & Sons, Ltd. Int. J. Nonprofit Volunt. Sect. Mark., August 2005


Creating customer value in the not-for-profit sector 189Building on this process, the mission of theBL was articulated in terms of helping peopleadvance knowledge to enrich lives. It couldbe argued that this mission statement is anexplicit articulation of the BLs value proposition—acentral aspect of a market orientedapproach (Cravens, 1998), which when linkedwith the organisation’s distinctive competences,is key to the development of competitiveadvantage (Cravens et al., 1997; Cravens,1998). Five ‘core competences’ of the BL wereidentified by which this mission was to beachieved:* open, consultative management;* staff who feel valued and recognised;* an empowered, flexible and diverse workforce;* non-hierarchical, agile decision making;* strong performance measurement.Senior management engaged in an extensiveinternal marketing campaign (including smallgroup workshops and briefings etc.) to communicatethe mission and organisational valuesin order to get staff to ‘buy-in’ to the process(and its results). The crucial role of seniormanagement in this process is generally recognised(Webster, 1988; Kohli and Jaworski,1990; Jaworski and Kohli, 1993; Dalgic, 2000).The strategy for the BL moved to being‘demand-driven’, focusing on the targetedmarket sectors identified above, and with itsawareness and what it could offer improvedby the adoption of a single, coherent brandidentity. The value proposition of the BL—particularly its world class collections and thevalue-added services it could offer through theskills and expertise of its staff—would arguablyguarantee customer satisfaction in thesetargeted sectors, and provide a source ofcompetitive advantage. Indeed, it was envisagedthat the new strategy would be deliveredthrough a renewed customer focus across thewhole organisation, whereby staff would interfacemore effectively and the potential ofelectronic communications would be embraced.Thus, the BL website offers onlinecatalogues, information and exhibitions, andchanges to the Document Supply Service atBoston Spa have enabled digital delivery ofresearch material on a far greater scale. Inaddition, partnerships with appropriate commercialpartners are being developed in certainareas—the importance of this is recognised inthe literature (Cravens et al., 1997; Cravens,1998; Lambin, 2000).Providing the valueThe latest BL Annual Report (British Library,2004c) gives an indication of the current scaleof activities and their usage for each of thetarget market sectors.* Researchers: Over, 400,000 visits are madeto the BL each year by members of theresearch community (e.g. postgraduate/undergraduate researchers, scholars, lifelonglearners and commercial researchers),to use the reading rooms. Even more usethe remote information supply service. Thecustomer alerting services offer access toover 20 million articles from academicjournals and conferences (with 9000 newarticles added to the database each day).* Business users: Key targets were identifiedas high research and development orientedindustries, professional services, creativeindustries publishing industries, and smalland medium-sized enterprises (SMEs). Indicativeactivities include research services(including bespoke services), documentsupply, reprographics and the creationof an innovation centre (to facilitate suchtasks as new product development etc.).Over 80% of the highest spending UKresearch and development companies useBL services. In many cases, this research andinformation retrieval expertise (in, e.g. thesciences, medicine, technology, intellectualproperty legislation and market research) istailored to clients’ budgets and deadlines.More than 10,000 SMEs use the priced(i.e.more standardised) information supplyservices.* Education: Usage of BL services andresources by the education sector (e.g.teachers, students in the 11–18 years categoryand school libraries) is increasingrapidly. In 2003, 8173 children and theirCopyright # 2005 John Wiley & Sons, Ltd. Int. J. Nonprofit Volunt. Sect. Mark., August 2005


190 G. Warnaby and J. Finneyteachers took part in workshops based atSt. Pancras and visits to the learning pages ofthe BL website increased fourfold. The BLprovides 2000 pages of online material toenable learners to develop investigative andcreative research skills in support of theNational Curriculum for schools.* Libraries: Links with the UK library network(both public and academic libraries) promotecollaboration between institutions atboth regional and local levels. Touringexhibitions (featuring items from the BLcollections) and online resources help toimprove access to BL material across thecountry, as befitting the library’s nationalremit. The BL also supports digitisationprojects with the aim of reuniting materialof regional importance that has been dispersedaround the country.* General public: For the public as a whole,the BL stages many public events (rangingfrom literary panel discussions to conferencesand themed talks) and also freeexhibitions—both real and virtual. The BLalso publishes books, audio CDs and interactiveCD-Roms targeted to both general andspecialised markets.Of course, the marketing function cannotachieve all this alone. The importance ofintegrated effort is recognised as a crucialelement of the marketing concept (Doyle,2002; Jobber, 2004; Palmer, 2004), and a keytheme of the literature on market orientation isthe need for interfunctional working (Day,1994a,b; Cravens et al., 1997; Cravens, 1998;Dalgic, 2000; Lambin, 2000; Foley and Fahy,2004). There are strong links with the organisation’sother directorates, particularly Operationsand Services, whose responsibilitiesinclude providing the full range of libraryservices, including reading rooms and documentsupply, to all the user sectors (BritishLibrary, 2003)—crucial elements in the targetsectors’ perceived satisfaction with the BLservice provision. Indeed, the organisationalprocesses by which value is delivered tocustomers are a critical component of marketorientation, and the link with the concepts oftotal quality management is made by variousauthors (Day, 1994a; Cravens et al., 1997;Cravens, 1998).Communicating the valueThe key organisational values identified aboveguided the development of a new brandidentity and logo for the BL. The previous logowas felt to be too subtle and often subservientto other communications elements. It was feltthat if the value of pride was to be displayedthen this must start with the importance andvisibility attached to the organisation’s name.The new logo incorporating the ‘BritishLibrary’ name now leads each communicationfrom the organisation. The previous corporateidentity system was traditional, even oldfashioned,and it was felt that a new identitysystem needed to be created if the key valueof relevance was to be communicated to abusiness and professional audience. A moremodern-looking corporate identity systemwould also highlight the third key value ofinnovation.In order to develop consistency of approach,the theme of advancing knowledge becamethe focus for external communications. Marketingcommunications aimed at each of thetargeted market sectors focussing on casestudies of how the BL has helped organisationsand individuals advance their own knowledgein order to achieve their business and/orpersonal aims and objectives, through theresulting enhanced individual developmentand effectiveness or improved business performance—inother words, demonstratingthe organisation’s value proposition. Thisapproach has been adopted in the latest AnnualReport and Accounts (British Library, 2004c),where representatives from exemplar organisationsfrom the different target sectors provideendorsements as to the value of the BL totheir own work and organisations.This key theme of adding value underlyingall of the BL communications activities appliesnot only to those individuals and organisationsthat comprise the various targetedmarket sectors, but also, as a consequence, toCopyright # 2005 John Wiley & Sons, Ltd. Int. J. Nonprofit Volunt. Sect. Mark., August 2005


Creating customer value in the not-for-profit sector 191—————2 In the Measuring Our Value study, this consumersurplus was measured through extensive primaryresearch among the various user sectors—over 2000respondents interviewed in total—that asked amongother things:* How much they would be willing to pay for the BL’scontinued existence?* What is the minimum payment they would be willingto accept to forgo the BL’s existence?* How much they invest in terms of time and money tomake use of the BL?* How much they would have to pay to use alternative tothe BL, if such alternatives could be found?the nation as a whole in line with its remit as anational library. Indeed, like many not-forprofitorganisations (Blois, 1994; Kotler andAndreasen, 1996), ‘resource generators’ (Gwin,1990) such as central government and otherfunding stakeholders are also an importanttarget for the BL marketing communicationsactivity. Here the need to highlight theefficiency and cost effectiveness of the BL isparamount. To support this, the BL producesvarious documents supporting their case, suchas Increasing Our Value: Summary of theBritish Library’s Case for Grant-in-Aid 2006–2008 (British Library).This focus on outcomes and how the BLprovides added value, has been reinforcedby an independent study of the economicimpact of the organisation titled MeasuringOur Value (British Library), using contingentvaluation methodology. This approach,designed by Nobel laureate economists KennethArrow and Robert Solow, provides acoherent quantitative evaluation of the totalbenefit to a nation of publicly-funded institutions.It makes an attempt to calculate theeconomic welfare that the BL generates by thesize of consumer surplus—by the value gainedby the BL beneficiaries over and above any costto them of using the library’s services. 2The study concluded that for the £83millionof public funding the BL receives annually, thetotal value produced is £363million—a benefitcost ratio of 4.4:1. Thus, for every £1 of publicfunding the BL receives annually, £4.40 isgenerated for the UK economy. The BL regardssuch initiatives as a valuable first step inquantifying its value proposition, whilst recognisingthat such research is not an exactscience. Indeed, it is argued that the figurereported above is likely to be underestimated.The Measuring Our Value study did not considerthe complete range of products andservices offered by the BL (e.g. website usagewas not valued) and the results exclude anyvalue generated for non-UK BL users, which islikely to be substantial (British Library, n/d b).The futureCombining both market-oriented and resourcebasedapproaches, the BL is constantly seekingto maintain and enhance its value propositionto its identified customer segments in a dynamicinformation marketplace. A key task iscapitalising on the resources of the BL, whichcan be classified as both tangible and intangible(De Wit and Meyer, 2004; Hollensen, 2003).Tangible resources obviously include the collectionsthemselves, and intangible resourcesinclude inter alia the reputation of the BL,based on, for example the research skills ofBL staff. Thus, for the business segment the BLcan provide general market intelligence tobusinesses (especially SMEs), and also bespokeservices for larger organisations (e.g. facilitatingthe use of collections as sources ofinspiration for product or communicationsdesign). Facsimiles of rare historical manuscriptshave been loaned to and exhibited inregional public libraries (providing significantopportunities for local, and also national,marketing/promotional activity). Resourcematerial based on items housed in the BLcollections are increasingly used by manyeducation providers as research skills thatbecome an important element of the NationalCurriculum.The Internet has revolutionised the informationstorage and retrieval industry (Benson,1997; Layzell, 2000; Hooper, 2001; Elliott deSaez, 2002), and the BL, like all players in thisindustry, has to cope with the implications:‘Today all libraries stand at a crossroadswith forks leading to a future obscured bythe fog of the new information technology’(Howard, 2004).Copyright # 2005 John Wiley & Sons, Ltd. Int. J. Nonprofit Volunt. Sect. Mark., August 2005


192 G. Warnaby and J. FinneyThe BL is actively developing its digitalcapabilities, so that as much of the collectionsas possible is available on the world-wide-web,with the ultimate goal being for the entire BLcollection to be available online on demand.Recognising the synergies between organisations—afactor emphasised by Cravens et al.(1997)—the BL has recently finalised a dealwith the software company Adobe and sciencepublisher Elsevier to establish a Secure ElectronicDelivery service. The BL now providesusers with scanned pages on request from anyof the 100 million research articles in BL, whichcan be sent to their desktop within two hours(British Library, 2004c; Fazackerley, 2004). Theimplications for some of the existing operationsof BL from such activities are obvious.Another key issue is preserving electronicdata (especially scientific data which is increasinglybeing published only in online format), inthe same way as books. The BL has successfullycampaigned for primary legislation for electroniclegal deposit. Thus, in addition to storing acopy of every print publication produced inthe UK and Ireland, the passage of the LegalDeposit Libraries Act means that the BL willalso be responsible for keeping copies ofelectronic material. As the Chief Executive’sreview in the latest Annual Report (BritishLibrary, 2004c) states:‘ ...we recognise that legislation is just thebeginning. Now, we must work to securefunding for the infrastructure that isneeded if we are to collect, store andpreserve digital materials and make themaccessible for centuries to come ...Only ifwe ensure long-term access to knowledgeheld electronically can the UK sustain itsglobal leadership in research, science andinnovation. It is critical that we continue toinvest in this infrastructure’.ConclusionIn a short span of time the BL has come a longway in terms of developing a more marketingorientedapproach. However, many challengesremain. As the Chief Executive’s review in thelatest Annual Report (British Library, 2004c)states:‘Every day I am reminded of all that theLibrary has achieved strategically andoperationally since our full-scale reviewin 2000. Our modernised services, integratedlife-cycle approach to collectionmanagement, and audience-driven approachto strategy development, all pointtotheremarkableprogresswehavealreadymade. Now, we are moving to the next level,focusing on an in-depth analysis of theLibrary’s strategic context ...The assessmentwill help us determine the strategicpriorities that will guide our developmentover the coming years—indeed, will helpus redefine the whole idea of a library in the21st century’.The extent to which the BL has developed atrue market orientation is however, more opento question. Two of Day’s (1994a) features ofmarket orientation—the development of a set ofbeliefs that puts the customers interests first, andthe coordinated application of interfunctionalresources—are being developed and implementedthrough the process of value creation anddelivery (Kotler, 2003) outlined in this paper.Much progress has been made in a short span oftime, but many of the issues associated withintroducing marketing concepts and principlesinto nonprofit organisations (see, e.g. (Blois,1994; Kotler and Andreasen, 1996)) have had tobe addressed and this work is ongoing, in termsof, for example building and maintaining relationshipswith both public and private sectorresource generators, and satisfying public scrutinycriteria.As the dichotomy between the public andprivate sectors becomes increasingly blurred(Flynn, 2002), public sector organisations arebeing increasingly subjected to both legislativeand competitive pressures which are forcingthem to reconsider their relationships with usersand customers (Chapman and Cowdell, 1998).The importance of this has been manifested inthefactthattheincreasedadoptionofmarketingprinciples by public sector and not-for-profitCopyright # 2005 John Wiley & Sons, Ltd. Int. J. Nonprofit Volunt. Sect. Mark., August 2005


Creating customer value in the not-for-profit sector 193organisations has been the focus of recentthemed issues of academic journals (see editorialsin (Horne and Laing, 2002; Warnaby, 2004)).Indeed, the task of developing customer valuethrough embracing the marketing concept (asopposed to merely implementing tacticallyorientedmarketing practices more effectively),is a nettle which more public sector and not-forprofitorganisations will have to grasp if they areto remain competitive in turbulent marketplaces,especially ones (such as the informationmarketplace) where they are increasingly incompetition with private sector organisationsfor whom marketing is more embedded in theirculture.Biographical notesGary Warnaby is a senior lecturer in marketingin the School of Management at the Universityof Salford. His specialist interests are themarketing of place, retailing and marketing innot-for-profit organisations (with particular referenceto town centre management schemes).He has presented papers at a number of internationalconferences and has publishedarticles in a wide range of academic and professionaljournals, as well as contributingchapters to several books.Jill Finney is the Director of StrategicMarketing and Communications at The BritishLibrary. Her role includes fundraising, publishing,retail and lobbying, press and publicrelations, as well as all mainstream marketingresponsibilities. Prior to this, Jill was theMarketing Director for UK Ernst & Young,responsible for global re-branding, workingwith Ernst & Young Worldwide. She was alsoresponsible for delivery of their major artsponsorship programmes in the UK. Beforeher role at Ernst & Young, Jill spent 15 yearsmarketing food products and food distributionto the foodservice industry, working for majorUS and UK corporations.ReferencesAssociation for Information Management. 1992.Sponsorship in Libraries. ASLIB: London.Audit Commission. 2002. Building Better LibraryServices: Learning from Audit, Inspection andResearch. The Audit Commission: London.Battles M. 2003. Libraries: An Unquiet History.Vintage: London.Benson AC. 1997. Neal-Schuman Complete InternetCompanion for Librarians. Neal-Schuman:New York. Cited in Elliott de Saez (2002).Blois K. 1994. Marketing and non-profit organizations.In The Marketing Book, 3rd edn., Baker MJ(ed.). Butterworth Heinemann: Oxford.British Library. 2003. Annual Report, 2002/2003.British Library: London.British Library. 2004a. The British Library—DidYou Know. http://www.bl.uk/cgi-bin/print.cgi?url ¼ /about/didyou.html [13 February2004].British Library. 2004b. The British Library—History.http://www.bl.uk/cgi-bin/print.cgi?url ¼ /about/history.html [6 April 2004].British Library. 2004c. Annual Report, 2003/2004.British Library: London.British Library. Increasing Our Value: Summary ofthe British Library’s Case for Grant-in-Aid 2006–2008.BritishLibrary:London.British Library. Measuring Our Value: Results of anIndependent Economic Impact Study Commissionedby the British Library to Measure theLibrary’s Direct and Indirect Value to the UKEconomy. British Library: London.Chapman D, Cowdell T. 1998. New Public SectorMarketing. Financial Times Pitman Publishing:London.Coates T. 2004. Who’s in Charge? Responsibilityfor the Public Library Service. Laser Foundation/The Libri Trust: London.Cravens DW, Greenley G, Piercy NF, Slater S. 1997.Integrating contemporary strategic managementperspectives. Long Range Planning 30(4): 493–506.Cravens DW. 1998. Examining the impact ofmarket-based strategy paradigms on marketingstrategy. Journal of Strategic Marketing 6: 197–208.Dalgic T. 2000. Market orientation and its implications.In The Oxford Textbook of Marketing,Blois K (ed.). Oxford University Press: Oxford.Day GS, Wensley R. 1988. Assessing advantage: aframework for diagnosing competitive advantage.Journal of Marketing 52(2): 1–20.Copyright # 2005 John Wiley & Sons, Ltd. Int. J. Nonprofit Volunt. Sect. Mark., August 2005


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