Report: Flat Renewal Project 2020-2021

SCELC saves its libraries $1.1 million in response to the pandemic

In April 2020, as SCELC libraries began to report pandemic-driven budget freezes, budget cuts and even large student refunds, it became clear that they would face an unprecedented need to minimize library subscription renewal costs for the coming fiscal year.  SCELC saw this need as an opportunity to use our position as intermediary to leverage the buying power of our hundreds of libraries to request incremental price relief. In the Great Recession of 2007-2008, SCELC successfully negotiated flat or reduced renewal costs with some of our subscription vendors, so in 2020 we decided to approach all of them in an effort to maximize savings. More specifically, our objective was to negotiate flat renewal pricing for all 5000 SCELC subscriptions renewing between July 2020 and June 2021.

In the end, we secured agreements from more than 90 companies. Seventy-four SCELC vendors held their renewals flat and an additional 13 agreed to reduced increases, combining to lower SCELC libraries costs by 2.5% (an estimated $1,118,000 on $45.5 Million in annual renewals). We hope this successful effort provides ongoing justification for libraries to support SCELC's efforts by licensing as much of their electronic resource content through SCELC as possible. (Nearly all of SCELC's income derives from a <= 5% surcharge -- averaging 2.8% in 2020.)

 Three tools we used to support these negotiations: 

1. A live response summary with fiscal impact -- to show that a strong majority of vendors were agreeing to flat renewals all along the way

2. A live confidential list of individual vendor responses -- to give credit where credit is due

3. A timely, comprehensive Fall 2020 library budget change survey (full report) -- to provide concrete evidence of the breadth & depth of our need

Round 1 - In April, we sent a personalized request to hold prices flat to our top contact at all 90 SCELC subscription vendors. Many agreed right away by email, others said they’d get back to us, asked to postpone the decision, or requested a meeting. 

To ensure decisions from all 54 vendors with July renewals, the three management team members each took a share of these and built a tracking tool, sending emails & scheduling meetings as a team or individually.

Our talking points:

• Member Libraries were already experiencing and/or expecting 10-20% cuts (April Survey Results) 

• In response to this unprecedented need, we expect renewal increase price relief from every vendor 

• A majority of vendors already agreed to hold prices flat (live response summary, as above)

• Vendor concessions will be shared with the membership via a live confidential list of vendors in each response category

• Concessions should help maintain subscriptions overall

Round 2 - As of late July, most journal publishers had yet to decide, representing ~$20 million in SCELC library spend that was still scheduled for standard increases. Around that time, Wiley and Taylor & Francis publicly announced flat renewal options for all of their US multi-year contract customers. Encouraged by their concessions, SCELC staff decided to redouble our efforts to negotiate reductions with the remaining publishers. In the end, every major journal package publisher reduced their contracted renewal increase. 

• In early September 2020, we launched a campaign to gather specific year over year budget data (full report) from all of our member libraries (this was the soonest it was available)

• We then shared up-to-the-minute budget survey summary data with each of the undecided vendors as we followed up

  • Budget survey summary (updated daily as libraries responded)

• Individual library budget change sorted by decreasing FTE (updated daily as libraries responded) 

Communication

Regular Communication with libraries was essential to the renewal negotiation process.  In addition to standard reporting to the SCELC board, and despite the sensitive nature of the negotiations, we sent multiple emails to SCELCs All Directors contacts, one email to library primary contacts, and responded to librarian requests individually.  At the request of one member library we made more detailed information available to SCELC member libraries as a whole. We also shared the emerging results during multiple SCELC Channel One & Channel Two webinars.  Whenever possible, vendor concessions were communicated as part of the normal renewal process. In one case for a large vendor, we used a mailmerge with each library’s specific subscription profile to support informed, individual choice as to whether to secure a lower increase via contract extension.

Assessment & Reflection

• Comprehensive timely interactions, vendor by vendor, strengthened many relationships even though we were asking for concessions.  As an added bonus, January renewals were improved because these percentages were established more than 90 days in advance, allowing more time to negotiate exceptions for individual libraries.

• Real time data summaries and details served both as ‘bravo’ and goad, allowing us to reinforce our gratitude and cheer on the successful effort each vendor had the opportunity to contribute to. 

  • More specifically, proof that a majority of responding SCELC vendors had agreed to forgo an annual increase was remarkably effective in convincing many of the remainder to do the same. 

  • The ‘reduced increase’ category was important in bringing costs down and providing a path to compliance for those with historically higher increases. It gave some vendors an alternative, without undermining our flat renewal request, and netted savings of 70 cents on the dollar when compared to the concessions made by ‘no increase’ vendors.   

• Return on investment - From the library perspective the return was quite high, since the savings percentage alone ~(2.5%) nearly covered the average annual surcharge (~2.8%) and will pay off every year going forward, because it reduces the base price on which future year’s increases are based. Looking at it another way, even at $100 an hour in labor costs (wages, benefits, overhead) the >$1M savings would cover more than 10,000 hours of work! It is difficult to estimate the number of staff hours invested in this effort but it would almost certainly fall in the low hundreds: suggesting an ROI of more than 2 orders of magnitude. 

• What about next year? One librarian was overheard saying “flat is not gonna cut it”-- in addition to being punny, this statement serves as a reminder that nearly half of SCELC libraries faced budget cuts, and many are expecting further cuts next year.  SCELC has yet to figure out how to negotiate price reductions in a scalable way, either across the board or on a case by case basis. 

Recommendations to SCELC Libraries

1. Factor vendor specific increases & concessions [available on request] into your future renewal decisions (and send SCELC any general rules or anecdotes about how they affected your decisions)

2. Support SCELCs future efforts to collect just-in-time budget data so that we can better negotiate on your behalf

3. Choose to acquire new or replacement eResource subscriptions through SCELC whenever possible (this offsets the negative impact of lower prices on SCELCs budget)

Recommendations to the SCELC Office

1. Close the loop with further communication 

   1. By specifically thanking the Vendors that made concessions when disseminating this report to Library Directors & budget survey respondents

   2. Via a customized thank you to the vendors that made concessions

   3. By posting the Vendor Response List to the members only section of the SCELC web page at least until the FY2022 renewal process is well underway

   4. Consider adding each vendor’s FY2021 renewal increase to an appropriate location in Consortia Manager 

2. Consider developing a more proactive annual renewal increase negotiation process, where increase percentages are finalized at least 90 days in advance

   1. This could be an annual process starting 120-150 days in advance, requesting a maximum increase based on market circumstances and vendor by vendor history 

   2. Alternatively, or in addition, this could involve pre-negotiating a standing standard annual increase with each vendor, with language/terms for exceptions along the lines of Orbis Cascade’s E-Content standing group’s Licensing Best Practices (see page 9)

3. Consider gathering qualitative & quantitative evidence that vendor concessions reduced the likelihood of cancellation, as vendors frequently asked about this