Best Practices

Benefits of Using a Subscription Agent and Cost-Benefit Analysis

Valerie Ryder, Director of Information Strategy, Wolper Subscription Services, Inc.

Libraries, corporations and institutions that are weathering the economic recession and are positioning themselves for growth and strong competitive positions in the recovery period are continuing to focus on cost reduction and improved operational efficiencies. An effective subscription agent can play an important role in the procurement and timely delivery of print and electronic content to support informed business decisions and provide a positive contribution in the balance of costs and benefits to its customers.

Key factors in a cost-benefit analysis whether the comparison is between using any subscription agency versus in-house staffing or among several subscription agency candidates are the same and detailed below. The sheer number of benefits provided by an agency partnership – more than a dozen – would suggest that outsourcing is a good decision. When evaluating several subscription agencies to select the one best suited to an organization’s requirements it is critical to first determine and prioritize the decision factors that are important to the organization. During the evaluation process, an organization should be asking each subscription agency how they handle each factor and comparing these responses not just with each other but against criteria that the organization has established as to the required level of service.

Benefits of a Subscription Agent

• Convenient, easy ordering

Using a subscription agency provides an easy and convenient point of ordering for all subscriptions that employees need to do their jobs or the organization needs to provide service to its customers. An employee does not have to research which publishers to contact, investigate each publisher’s ordering systems and payment requirements, nor initiate a separate order for each subscription. Many subscription agencies have online ordering systems that are available anytime day or night and provide a one-stop ordering point, with prices and delivery options, to help employees make their purchasing decisions. Often these ordering systems can be customized for the organization’s preferences and interfaced with their e-procurement systems or a library’s Integrated Library System (ILS) for additional time savings.

• Lower cost does not always save money

Sometimes employees or other individuals in an organization believe that prices for periodicals are less expensive when ordered through an Internet-based discount subscription broker or the publisher’s website. Using a discount subscription broker or a subscription agency who quotes the lowest cost can be a short-sighted decision since the organization loses the power of the subscription agent’s knowledge and ability to leverage their relationships with publishers to resolve problems. Too often, organizations find that the customer service provided by discount subscription brokers or low-cost subscription agencies does very little to resolve problems once they have received payment or placed an order with the publisher. Whatever savings the organization thought they would receive is offset by additional effort on their part to ensure that the subscription starts when expected, that all issues are received promptly and that the subscription is renewed at the correct time and for the correct price.

In addition, discount subscription brokers and low-cost subscription agents are not always authorized to sell subscriptions to the highly specialized journals in science, technology and medicine or from scholarly publishers so the employee must still locate the proper ordering channel. In some instances, the discount subscription broker or low-cost subscription agent is quoting a price for an individual subscription rather than for an institutional subscription. When the publisher challenges the validity of the order, the institution must pay the higher rate or they will not receive the publication.

• Leveraging the subscription agent’s knowledge and relationships

Subscription agents are well-informed about each publisher’s offerings and will know or can easily research where to order a particular title. Employees can avoid spending hours of time trying to figure out which publisher is responsible for the magazine or journal that they want to order, determine the correct pricing category that applies to them, and the most appropriate delivery method. Subscription agents usually specialize to serve particular types of libraries, organizations, industries and subject focus of periodicals. When evaluating several subscription agencies it is important to determine what are a subscription agency’s specialties and obtain references from current customers in the same field as the organization.

Reputable subscription agencies have established business relationships with publishers and have direct authorization to place orders for the publisher’s periodicals. Other subscription agencies do not have these publisher relations and must place orders through an intermediary, adding extra steps in ordering, paying and resolving problems. Subscription agencies without strong relationships with publishers may not be able to offer competitive pricing, discounts nor prompt responses to inquiries.

Client-focused subscription agents can also keep a customer informed about new information resources in their areas of interest, if desired.

• Accurate and appropriate subscription rates provided by publishers

Diligent subscription agencies will provide current and accurate prices of the subscriptions being ordered. Pricing for periodicals can change throughout the year and may vary depending on the type of institution receiving the service, number of individuals subscribing and location of the customer. When evaluating multiple subscription agencies it is vital to ensure that all pricing data is current and accurate.

Some publishers will provide group rates or package deals for subscriptions ordered by the same customer. A knowledgeable subscription agency will review a customer’s total list of titles and negotiate on behalf of the customer (if granted this authority) with the publisher to obtain group rates or better pricing for a package of titles than the sum of each title’s individual price.

• Negotiating licenses for electronic subscriptions

A knowledgeable and experienced subscription agency can advise an organization during its migration from print to electronic or digital subscriptions. A proactive subscription agent will advise a customer when there are more cost-effective methods of making journal content available to employees or clients, such as site or enterprise licensing of electronic journals, for subscriptions that are widely used in the organization. If authorized by the organization to negotiate on its behalf, a subscription agent can recommend modifications to a publisher’s standard license terms and conditions to meet their customer’s needs for internal use, re-purposing or redistribution of the subscribed content. The subscription agent can work with the organization’s legal or procurement department or as authorized by the organization to directly negotiate with the publisher.

• Increased employee productivity

Time and effort reductions for employees placing orders, approving invoices and processing payments also deliver soft savings to the organization. These soft savings can be converted to hard dollar savings by computing the hourly rate (including all benefits and overhead costs) of the employee class performing these functions, computing the number of subscriptions ordered and estimating the amount of time required to place orders and process payments. Wolper Subscription Services can provide a sample worksheet to assist in this analysis – see section “Cost-Benefit Analysis”.

• Invoice consolidation

Accounts Payable will process one invoice per month, per quarter or per year for all subscriptions paid by the subscription agent during the period agreed to in the contract instead of paying individual invoices for each subscription ordered or renewed by an employee or department. The cost savings to an organization will depend on the quantity of subscriptions ordered and their internal costs to process orders and invoices for payment. Internal costs to an organization to process orders and invoices can range from $80 to $100 per order/invoice where orders and invoices are processed manually and in totally paper-based work flows.

• Cash flow benefit

In most cases, a subscription agent pays the publisher upon receipt of the order or renewal and then invoices their customer at the next billing period. This time shift in outlay of funds by the customer provides a financial advantage in that the customer has use of their money for the period of time between ordering and paying even though the purchased goods or services have been committed.

• Avoidance of duplicate subscriptions

Publishers send renewal notices or special rate advertisements to subscribers many months in advance of the actual subscription expiration date to accelerate their receipt of payment. If employees are not carefully monitoring which subscriptions they have renewed or when the renewal commitment really needs to be made, the result can be duplicate payments or duplicate subscriptions. Some subscription agents will double-check their records when receiving an early renewal or duplicate order to prevent unnecessary payments by their customer and avoid the time-consuming effort of obtaining refunds.

• Visibility for total spend management

Some subscription agencies’ ordering systems can be leveraged to provide necessary data to purchasing, accounting and financial groups within the organization and enable them to monitor, analyze and manage the total amount of spending on subscriptions. In many cases, the consolidation of ordering and payments through one channel (the subscription agency) will provide the visibility necessary to focus attention on ensuring that the right information sources are being received and used by the right people in the organization. A knowledgeable subscription agency can also recommend alternatives and strategies for maximizing the value derived from the spending level desired for information content delivered to an organization.

• Monitoring of renewal dates for subscriptions and timely notifications

Some subscription agents utilize their internal ordering systems to monitor when subscriptions need to be renewed to ensure uninterrupted delivery of issues. Notifications are sent to the appropriate decision-maker within the customer’s organization with sufficient time allowed for a renewal commitment to be determined and payment made to the publisher by the agent so that no magazine or journal issues are missed. Staff time is minimized for the renewal process because they can rely on the subscription agency to keep them informed and initiate timely actions.

• Problem resolution with publishers

Depending on the quality of their business relationship with a publisher, certain subscription agencies are better able to ensure timely and satisfactory resolution of problems in delivery or invoicing with a publisher. Whether the problem is delays in starting to receive a new subscription, missing issues of a magazine or journal during the subscription period or gaps in delivery at renewal time, a subscription agency’s staff knows who is the correct person at a publisher to quickly resolve the problem and can escalate the problem resolution through the publisher’s chain of command to achieve a solution that is acceptable to their customer. Any problems in incorrect billing by the publisher for the subscription ordered are resolved by the subscription agency.

• Updating of address or access changes

When employees leave the organization or change jobs such that their print subscriptions need to be re-assigned to their replacements, the subscription agency can handle all notifications to all publishers. In the case of electronic journals, the subscription agency can also notify each publisher of any relevant changes. One notification of required changes to the subscription agency will result in prompt and accurate notifications to the appropriate individual at the publisher or distribution channel for each subscription.

• Prevention of unauthorized spending

Depending upon the subscription agency’s specific capabilities, an organization’s policies for spending approvals may be enforced through a subscription agency’s ordering system which can be interfaced with an organization’s purchasing and accounting systems through a variety of e-procurement interfaces or procurement card payment channels to ensure accountability and control of spending on subscriptions.

• Ensure completeness of journal collections

In cases where timely receipt of all issues of a magazine or journal is critical to the functioning of the organization, the subscription agency can provide systems and/or staff support to ensure that delivery of each issue is tracked and expedite the replacement of missing issues. The subscription agency staff can conduct all follow-ups with the publisher and keep their customer informed of status so that employees can devote their time to their primary function.

• Ancillary services

Some subscription agencies are able to provide additional services to their customers that streamline the organization’s internal work processes, such as: Electronic Resource Management software systems, interfaces with a library’s Integrated Library System or online catalog, provision of MARC formatted catalog records for the library’s online catalog or document delivery services for individual articles from periodicals. When evaluating multiple options for ordering subscriptions an organization should factor in the value of these services to their decision-making process.

Costs of a Subscription Agent

• Prices paid for subscriptions ordered by the organization or its employees

All subscription agencies are required by the publisher to charge the same publisher-mandated price for the market served for a particular title. When comparing prices for specific subscriptions or for the total package of subscriptions, it is crucial to ensure that the same journal or magazine title, the identical media or delivery channel, the correct publisher pricing category (individual, institutional, library or educational) and the same year prices are being provided for all options being considered. It is also important to provide the entire list of subscriptions being considered because some of the other costs can vary depending on the mix of titles, publishers and balance of electronic versus print subscriptions. A knowledgeable subscription agency will be able to suggest when a package of journal titles from the same publisher is more cost-effective than purchasing individual titles.

• Service fees or transactional fees of agent

While most subscription agencies charge a service fee to cover their costs of doing business, these service fees may be calculated as a percentage of the total invoice, or as a percentage of each item with a maximum charge per item, or as a flat amount per item.

Cost-Benefit Analysis

Wolper Subscription Services has developed a worksheet that provides a framework within which costs can be compared for the options of handling subscriptions in-house versus engaging a subscription agent, as well as comparing multiple subscription agencies. This worksheet can be requested by contacting Wolper Subscription Services at Sales@wolper.com.

As in any cost-benefit analysis, a careful and accurate assessment of the costs incurred for specific alternatives versus the quantified value of benefits that are most important to an organization will result in a fact-based decision. The time and effort expended by investigating all options under consideration, asking probing questions and comparing qualitative as well as quantitative data will deliver the best long-term decision for an organization.

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Valerie Ryder is Director of Information Strategy for Wolper Subscription Services. She has over 30 years of experience in managing business and research libraries in the corporate sector, has spearheaded the migration from print to electronic information resources at a Fortune 300 company and has been a solo librarian. She has an MLS degree from the University of Pittsburgh, a Master’s degree in International Business Management from Point Park University and a Bachelor’s degree in mathematics from the University of Rochester.

Wolper Subscription Services is the leading provider of personalized, customized subscription management services for public, government, corporate and academic libraries. Our high tech, high touch™ approach combines extraordinary customer care with a robust online system (WOLPERweb®) that enables 24/7/365 access to more than 300,000 titles and online check-in with automatic claiming. Wolper has been in business for 30+ years and is the only certified 100% woman-owned business in the industry. For further information, please contact us at 610-559-9550 or www.wolper.com.