Selling for fun & profit: in tough times, the `customer-focused' campus bookstore is becoming one heckuva revenue generator.

Historically, the university bookstore has been a basement dweller--necessary but not necessarily profitable, tucked into the campus's cheapest real estate and easily overlooked. But with so many higher ed budgets slashed due to state and local economic woes, the campus bookstore may now be just the revenue generator schools have been searching for. At least, that's what customer service guru Patricia Seybold was selling at March's CAMEX (the National Association of College Stores' collegiate retailing show), and attendees were pricking up their ears. After all, many of them had recently received the mandate from senior administration: Make that store a moneymaker!"

The Customer Is Key

"It's a customer economy," says Seybold, author of Customers.com (1998, Times Books) and The Customer Revolution (2001, Crown Publishing). She insists that the best practices and core competencies of successful companies can--and must--be transferred to the collegiate retailer. Those companies, she points out, know they're now operating in a "customer economy": one that's moved from a supply "push" mode to a demand "pull" mode catalyzed by the Internet. Customers are more demanding than ever before, she says; they have so much more information at their fingertips.

"A successful bookstore retailer has to create a shopping experience customers will love, and then `brand' the experience that is delivered," she says. "What do your customers want? That's the question. While price is important, there are other things customers value: convenience, atmosphere, how easy it is to do business with you, and how easy it is to get what they need."

What does the customer want? Key to creating the type of retail experience customers keep coming back to, says Seybold, is finding out what--in a very specific way--matters most to your customer. Once you uncover those essential needs, she advises, focus on fine-tuning your ability to meet them, and make them your core competencies; the things you do best. Then make sure your customers and potential customers know that's who you are: brand the experience.

Focus groups/scenario mapping. But how do you get to square one and uncover those customer needs? Seybold suggests holding focus groups to elicit feedback about how you already operate your bookstore. Or, go the more interactive route and institute "customer scenario mapping," a technique by which customers literally co-design the manner in which they want to do business with you. In customer scenario mapping, says Seybold, the retailer gathers a group of customers with a common demographic (e.g., either students, alumni, parents, or faculty) and encourages them to discuss the key issues they care about. Each of those groups, she explains, faces "moments of truth" in their shopping experiences: how convenient it is to obtain academic regalia at graduation; how easy it is for the academic departments to submit book orders; availability of used books prior to start of classes; etc. In such sessions, she says, a smart retailer will learn quickly that no matter what else he may be doing, if he doesn't get these things right, customers will be turned off.

That's where the measurement of key factors--or "metrics"--comes in. For instance, say you've discovered that your customers leave the store when they encounter long lines, and head for Internet or local competition. Your attention should then be focused on increasing checkout staff at crunch times. Yes, your metric for the cost of increased staff resources will go up, says Seybold, but if it is compared to the declining metrics of the dissatisfied (lost) customers and actual lost sales caused by long checkout lines, "You will see very quickly the benefits of having those extra cashiers," she says.

The customer "sat" survey. To help bookstore managers measure specific satisfaction metrics, NACS offers both customer satisfaction (www.nacs.org/public/ research/customer.asp) and faculty satisfaction (www.nacs.org/public/research/ faculty.asp) survey services. Such a survey proved to be a valuable tool for Lynette Seymour, manager of the Iowa State University bookstore, in Ames. The survey results revealed that customers wanted the store to provide more convenient book buyback and more used books. With those metrics in hand, Seymour moved the location of buyback from a meeting room in the student union (located on a different floor than that of the bookstore, and without direct access to it), into the textbook area of the store itself. To create a flexible space to accommodate buyback, she tore down two rows of shelf fixtures and replaced them with rolling shelves. The result: an immediate 9 percent increase in store buyback units. Used book availability automatically increased too, but focusing on what her customers had told her about the acuteness of their needs, Seymour saw an opportunity to do even more: Before classes resumed, she blitzed the faculty with letters, postcards, personal calls, and ads in the faculty/staff newspaper to encourage them to make sure the books needed for their classes were ordered or on the shelves. This gave the bookstore staff more time to mine the used-book companies for the titles. Result: Used book sales climbed 11.5 percent for the semester.

In addition to the NACS survey, Seybold recommends an innovative "insight" tool developed by MA-based consultants Gang & Gang (www.gang.net). "In any kind of survey there is a `high say, low do' phenomenon," says Seybold. "Customers will tell you one thing on the survey, but act differently." The Gang & Gang survey methodology, based on emotional motivation, takes that phenomenon into account, she explains. But there are any number of customer satisfaction survey models to be found in books and on the Web, say the pundits. Many can help a bookstore manager reveal metrics previously unearthed.

Build trust with brand. Bookstore customers often complain that they don't trust the store's prices and are "at the mercy" of the college bookstore, Seybold points out. Since price does matter to customers--and campus bookstores cannot always meet or undercut the lowest Web prices--Seybold recommends offering onsite price comparisons to build customer loyalty and trust with your brand. (First, though, make sure you're giving your customer everything else she needs--convenience, shopping experience, availability, etc.). Go ahead and post the college bookstore's price alongside the current price for the same item at Barnes or Noble or Amazon.com, she says; "Let your shopper see that even though she is paying 30 cents more, she is not being gouged. Obviously, there will always be things that are cheaper than they are at the campus bookstore," says the guru. But if you've met (and maybe even exceeded) your customer's most acute needs, she'll come to trust your brand, and 30 cents here or there won't stand in her way of a great shopping experience.

Leverage the Internet

The mainstream bookstore with e-commerce capability scores high with today's consumers, and smart collegiate retailers have grabbed this advantage. According to the NACS 2002 College Store Industry Financial Report (www.nacs.org/public/research/ financial.asp), approximately 96 percent of college stores had Web sites in 2000-2001, up from 93.2 percent the previous year. Eighty-one percent of those sites support e-commerce, compared to 67 percent in 1999-2000 (primary items for sale online are textbooks, apparel, and gifts). Still, at an estimated $130 million, or only 1.2 percent of total college sales (2000-2001 figures), online sales is an area bookstores have yet to adequately exploit.

Best practices. But here, too, campus administrators need to look to successful mainstream models for Internet best practices before they implement, says Seybold. Land's End, for instance, creates a "seamless" shopping experience for customers, she says, whether they are shopping onsite, via the Web, or telephone. If a Land's End customer places an order on the company's Web site, and needs to modify it afterward, he can call customer service, and within seconds the company representative on the phone can locate the purchase record and make the necessary changes.

"Having what the customer does on the bookstore's Web site available to the people in customer service or at the checkout counter is important," says Seybold--whether on campus or off.

Another best practice she highlights: offering the customer the ability to reserve merchandise online and pick it up at the store--or even have it delivered. But Laura Nakoneczny, a spokesperson for the NACS, notes that textbook reservation can pose several logistical and potential financial challenges for some college bookstores, because adequate storage/warehouse space is needed to accommodate what might amount to several thousand orders. Many stores, she says, have limited space and dedicate most of what they have to the sales floor, where they can realize profit. She advises bookstore managers to think through operational changes carefully.

"You might also require a new distribution system for these orders, or a different way of tracking those sales. And stores always seem to end up with unclaimed orders, which generate additional operational costs due to the packaging, labeling, storing, re-shelving, and ultimately, return of the books to the publishers they came from. It's not difficult to actually lose money through textbook reserve programs when they aren't implemented properly," she says. "So, while many stores do provide this service, other stores tend to approach it cautiously."

Seybold warns against overcautiousness, however. "The old model of the college bookstore is a passive merchandising place," she says. The new, more aggressive campus bookstore retailers "are really putting themselves in their customers' shoes and are understanding the key things they need to accomplish, to make bookstore shopping easier for their customers."

Herewith, two highly customer-oriented campus bookstore models, both members of NACS.

Bowling for Dollars at BGSU 

In March of last year, the Bowling Green State University bookstore moved into the new Bowen-Thompson Student Union building, in the heart of the campus in Bowling Green, OH. The new location, featuring 6,050 more square feet of retail space, 800 additional square feet of storage space, and an added 1,200 square feet of office space than in the old store in the Saddlemire Students Services building, was a springboard for new opportunities to serve the campus through expanded services and product lines. Since its reopening, revenue has steadily increased, with sales up 17 percent year-to-date, and up 20 percent during the January back-to-school rush (total sales were $9 million plus).

Defining goals. Right along the lines of Seybold's mantra, the following goats essential to the bookstore's success were uncovered and developed, says bookstore Director Jeff Nelson: 1) Continuous improvement of customer service by using multiple methods for soliciting customer feedback; 2) enhanced use of technology, including the Web and internal systems; 3) deliberate and advance merchandise promotion and event planning on an annual basis; and 4) performance analysis and benchmarking against industry data to improve operations.

To meet these goals, the new store has more checkouts to get people out faster; it makes better use of comprehensive inventory management, point-of-sale, and store financial systems; and it has improved data capture at point of purchase from an approximate 25 percent scan rate to a 99 percent scan rate.

"This will allow us to better track what sells, and then use that information for reordering (electronic and otherwise), auto-replenishment, gross margin management, sales performance analysis, clearance strategies, immediate verification of on-hand inventories in the system, and automating the accounts payable process," Nelson says. "These are all features and capabilities that were present in our existing system, but were not utilized."

Display. As part of a series of customer service improvements, Nelson also raised the bar on the visual display standards to give more exposure to products than the old location (with no display windows) would allow. Because one side of the new store is glass and faces a bustling mall area in the center of campus, Nelson opted for flexible display systems to show off products to passers-by. Flexible nesting tables are used inside to rotate seasonal merchandise in the wider aisles of the new bookstore.

Surveying customers. And for the first time, the bookstore partnered with the university's Office of Institutional Research to conduct focus groups the fall after the bookstore opened. Paper-and-pencil customer satisfaction surveys had been used in the past, but administrators thought they could benefit more from a dialogue rather than a one-way exchange of information. They were right.

Nelson discovered that graduate students did not like the graduation gown rental program. Pickup times were limited; mail, phone, and Internet orders were not possible; gowns varied in fit and color due to dry cleaning of the rentals; and students were tired of trudging back to the bookstore to return rented caps and gowns after the ceremony. Now, for $38, students can purchase their gowns at any time, instead of renting for $29.50; they can make sure the gown is fitted properly and can even have it shipped. The feedback? The convenience is worth the modest additional expense.

Catering to target groups. The bookstore also added a midterm "Graduation Fair" to its event schedule. A one-stop shopping event, the fair brings together commencement-related products such as graduation announcements, academic regalia, and diploma frames. The initial shipment of regalia sold out at the one-day event; most of the second shipment sold when it arrived the following week.

To include the needs of the Alumni Department, the BGSU bookstore is also expanding (at no additional cost) its MBS Textbook Exchange e-commerce solution. It has also purchased the Alumni Department's merchandise inventory, and has agreed to pay licensing income for their logo. The bookstore Web site is marketed to the alumni via the alumni magazine and online newsletter. Alumni will serve on the store's advisory board, and a focus group or online survey exclusively for alums is in the works.

"Someone once said to me, `A student is a customer for four years, but an alumnus is a customer for life,' says Nelson.

Web search and order. The Web has also helped the bookstore meet another customer need that surfaced during the fall focus groups: academic department coordinators wanted better and more independent access to the textbook database. In the past, they submitted textbook orders via campus mail or fax. Now, they can access the live database the store uses to track sales history and order textbooks, and they can scan 400,000 titles offered nationally. Instructors can track which texts were used to teach courses previously at the university, can order from the national database of best-selling textbook titles, or can manually enter a needed text.

After a brief confirmation process, department coordinators and instructors are brought directly into the ordering system, Nelson says. And in fall 2003, students will be able to register online, bring their classes up on screen, and then click over to the bookstore's Web site with all of their course information and required texts. Students will be able to reserve the books before they arrive on campus and pick them up later, or have them shipped. Since the MBS e-commerce solution is integrated with the store's ordering and inventory management database, point-of-sale solution, accounts payable, and physical inventory packages, the customer can contact the store via any channel, and bookstore staff can add or delete items with ease.

"It's supreme convenience for the customer," says Nelson.

UCSB's Value Proposition

The bookstore at the University of California, Santa Barbara has subtle ways of letting customers know their business is important: Full bowls of candy are placed at all customer service counters, and bottled water is dispensed from large coolers on both levels of the store, to keep shoppers refreshed while they search for goods.

Focusing on the customer. "We're also reviewing our hiring criteria, to make sure we hire staff with outgoing and friendly personalities," says Ken Bowers, director of the bookstore. And he's eliminated an office adjacent to the sales floor, to provide more space in the apparel area, and added video screens there to replay sports events and create a more customer-friendly atmosphere for try-ons. Clothing sales are up more than 10 percent as a result, he says. Bowers also uses suggestion boxes, annual customer satisfaction surveys (developed in-house), and "undercover" shoppers to help him gauge how patrons feet about the store's customer service efforts. Right now, the staff is communicating with customers to find out how easy it is to find the merchandise they seek: Is signage and lighting effective? Do products "sparkle" on the shelves?

Adding value to the textbook sale. Still, textbook sales have been a challenge. Though textbooks comprise about half of the store's $14 million in total annual sales, textbook prices have become a hot topic on university campuses.

"As price level has crept up rapidly toward $80 to $100 per text, students have started looking for other options," Bowers says. "We think more of them are sharing books, copying parts of books, and looking for low-cost options."

Using value as a customer metric, the store is trying harder to convey to customers what sets it apart from local and mass-merchant competitors, when it comes to textbook sales. "Best Value Guarantee" banners hang throughout the store, boasting store strengths: reputation, convenience, selection, returnability, etc. High-visibility yellow price-cut signage announces best deals on select texts.

Building loyalty through value. Bowers believes in building customer loyalty through value-added selling, and his staff keeps tabs on customer loyalty through sales data. When the store began offering a lifetime guarantee on the backpacks it sells, backpack sales soared from an estimated 5 percent of the area market to near 85 percent. In 18 months, the dominant backpack retailer in the area was forced to close shop--it couldn't compete with a lifetime guarantee policy.

For a store that saw a seven-fold sales increase in a decade, "having the strongest value proposition is key," says Bowers. Knowing who the customer is, what he needs, and how you can set your store apart by giving it to him, is what it's all about.

RELATED ARTICLE: Creating new markets.

Smart collegiate retailers are seeking out campus sub-groups and organizations, looking for those partnership opportunities that respond to customer need and build new revenue streams for bookstores.

Faculty. At University of Colorado-Boulder, bookstore director Pamela Mills believes the bookstore should be involved in the orientation of new faculty to familiarize them with what the bookstore has to offer. "Now we are producing the new faculty fair. We get to visit with every new faculty member at our a tabletop booth," she points out--a great way to get closer to the faculty customer.

Parents of athletes. The University of Cincinnati's senior bookstore buyer, Chris Adkins, developed the Family Fanatics program after being contacted by the Football Parents Association. After meeting with several vendors, a name-drop graphic logo was developed for football, basketball, and soccer. Adkins marketed the program with a four-page flyer mailed to parents. Now the proud moms and dads can order the special sports-logo apparel directly from the store.

Community members. With no major booksellers in the Bowling Green, OH community, the Bowling Green State University bookstore staff wants to draw community members in to shop on campus. So, the store has partnered with the chamber of commerce to design a focus group to better identify the community's needs. The bookstore has also bumped up ad placements in the local paper and is getting involved in local community events: At a recent holiday parade, a staff member donned a Winnie the Pooh costume and led parents and children back to a children's book event at the store.

Parents. The University of Cincinnati bookstore has developed Bearcat Care Kits featuring Birthday, Spirit, Stress, and Valentine Care Kits consisting of assorted goods marketed to parents to purchase for their UC student children. The bookstore delivers the kits directly to the students.

Alumni. The University of California-Santa Barbara bookstore courts alumni by offering a special alumni portal on UCSBstuff.com, the bookstore's e-commerce site. The portal offers Alumni Association members a discount on everything purchased on the site, while the store builds revenue and lifelong customer relationships. And because the Alumni Association controls the password to the site, it can offer the discount shopping as a member benefit.

Freshman. To "grab" the freshman customer from the get-go, University of Cincinnati's Adkins developed a Bearcat Bundle Package, and distributed a flyer and order form to parents and students during freshman orientation. The flyer offers two different bundles, which feature a Bearcat comforter or throw, an extra-long sheet set, UC trash can, pennant, pillow, and alarm clock.--NR

Get Help Fast

Looking for expert advice or technology? Use the links below, to start.

Bookstore Consultants

Affinity Express--www.affinityexpress.com

Barnes and Noble College Bookstores, Inc.--www.bkstore.com

Campus Bookstore Consulting--www.cbcconsult.com

College Bookstores of America--www.collegebookstores.com

College Discount Cards--www.ideal-results.com

Components Design Studio--www.componentsdesign.com

Connect2One--www.connect2one.com

Eldon [e-mail]

Follett Higher Education Group--www.fheg.follett.com

GRID2 International--www.grid2.com

JGA--www.jga.com

Ken White and Associates--www.kwainc.com

National Association of College Stores--www.nacs.org

Nebraska Book Company Inc.--www.nebook.com

OCC Associates, Inc.-Spartan Showcase [e-mail]

U. the College Marketing Company--www.colleges.com

Systems/POS/Textbook Management

Affinity express--www.affinityexpress.com

Booklog--www.booklog.com

BUDGETexT--www.budgetext.com

Connect2One--www.connect2one.com

Follett Higher Education Group--www.fheg.follett.com

MBS Textbook Exchange, Inc.--www.mbsbooks.com

Nebraska Book Company Inc.--www.nebook.com

PROMARK Labels--www.promarklabels.com

Pubnet-Bowker--www.pubnet.org

RATEX Business Solutions--www.ratex.com

Sequoia Peripherals--www.sequoiap.com