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QUESTION: How does the library justify allocating budget dollars for Unique Management's material recovery service when dollars are scarce or when budgets are tightened?
ANSWER: When budgets are tight or being reduced, it becomes even more important to use our material recovery service to protect the library's assets and to increase revenue.
Here is why:
Unique Management’s material recovery service is one of the most cost effective, high-return investments a library can make. Our guaranteed ability to help the library recover lost materials and fines protects the library’s assets, reduces expense and increases revenue.
The average return on investment for our service, among our 400+ customers, is between $4 and $7 for each dollar invested. Returns are defined as the value of materials and cash recovered/resolved.
For libraries that have access to the money recovered through our service and that have our budget neutrality guarantee, budgeting will be no problem because at least enough cash will be coming in to cover the cost of the service. This is in addition to the value of materials recovered.
When preparing the library’s annual budget, it is important to account for the full financial effect of our service:
Expense Budget
The cost of our service should be calculated, based on the projected number of accounts to be submitted by the library. (For prospective customers, our cost can be estimated at $8.95 per account submitted. The number of accounts submitted can be projected to be 12 accounts per month for each 100,000 items in annual circulation (assuming a minimum account balance of $25. For current customers, actual past experience is an accurate guide for budgeting for future years, notwithstanding anticipated increases in circulation.)
The library’s projected cost for replacing lost materials should be reduced. Our service will recover approximately 50% of the value of materials submitted to UMS for recovery. The line item expense for the library’s collection can be reduced accordingly.
Income Budget
Income should be projected to increase because of money recovered from accounts submitted to UMS. (Again, for libraries with UMS’ budget neutrality guarantee, cash recoveries can be projected as income at least equal to the cost of our service.)
Return on Investment
The estimated value of materials and fines recovered/resolved should be at least 2 times greater than the projected cost of our service. If the library is using our service as recommended, that is: submitting accounts with minimum balances of $25, within 60 days of being overdue, and adding a $10 late fee, amounts recovered will likely be between 4 to 7 times higher than recovery fees paid. In other words, our clients typically get $4 to $7 back for every $1 spent on our recovery service.
Value Added
The materials we recover are typically the most popular items in the library’s collection. As those materials are returned for re-circulation, the availability of those items greatly increases. Financial considerations based on the library’s circulation size are positively impacted.
In addition, the ability of the library to more fully meet the needs of patrons is significantly enhanced. It is difficult to quantify the value of improved customer service because items are available when patrons want them. However, we can be certain that improved customer service has tremendous value for the library.
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