financial reporting to improve operational metrics to lower the odds of being outsourced dennis...
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Financial Reporting
To Improve Operational MetricsTo Lower the Odds of Being Outsourced
DENNIS MEKELBURG
SENIOR CONSULTANT, INDICO
CSANC, OCT 27, 2015
Goals for Today
An Interactive Conversation
Talk about why we should report financial (and other) information
Talk about the “teaser questions” and why they were asked
Provide some information and ideas to use in our stores
Learn about some of the language of outsourcing
Talk about contractor interests and language
What have you done
TODAY?
How often do the contractors communicate with your administration?
At least once a month?
NACAS and NACUBO publications
Several times a year?
NACAS and NACUBO meetings
Direct communication
Mailings
Personal contacts
So – What does that mean relative to financial reporting?
To whom do want your administration to listen?
Why Would Your Campus Outsource the Bookstore?
Financial – Perceived or Real
Textbook sales declining – fear about future sales
Fear of the future – digital textbooks
Perceived lack of customer satisfaction
Lack of communication from the bookstore
Why Would Your Campus Outsource the Bookstore?
Are the contractors communicating with your administration?
NACAS
NACUBO
What are they telling your administrators?
How to Address Pressures to Outsource
Financial
Know your numbers!
Especially what the total contribution to the campus is
Improve each primary measurement
Examples:
Cash flow
Textbook inventory arrival/return management
Three Guys - $30
Make Sure the numbers make sense!
How to Address Pressures to Outsource
Textbook sales declining?
Know Why!
Category Sales (New, Used, Rental, Digital)
Unit Sales
Rental Units increasing or declining?
More course materials through the campus LMS?
What is the customer feedback?
How to Address Pressures to Outsource
Fear of the future – digital textbooks
Do you believe these Ads in NACAS magazines by contractors?
“Only xxx can help you seamlessly manage the transition to digital course materials…..”
“XXX is the undisputed leader in helping you create a superior campus store experience”
“We’re your faculty’s advocate – empowering them with groundbreaking textbook research and adoption tools”
“We’re your campus’ retail expert – fueling school spirit with dynamic in-store and online shopping experiences”
“We’re your school’s hands-on partner – delivering what’s next to drive your academic and business success”
“Original and inventive, our solutions are as unique as the bookstores they benefit”
How to Address Pressures to Outsource
Know what the contractors are saying
“We’re your students trusted ally – saving them the most money on course materials and providing the most options”
How are they the trusted ally?
What are the metrics for “saving the most money”
What options do they provide that others do not?
Reducing the Odds
Maintain a list of all services that the current store provides Include with financial reports
Track every nickel that you provide for your campus and administration Profit
“Rent”
Utilities
Assessments for administration, IT support, etc.
Required contributions for employee benefits
Contributions to R&R
Departmental, faculty/staff discounts
Contributions to campus related organizations
Are they of high value to some constituency?
Find out if customers care about the services
What is the dollar value of them being provided?
How to Address Pressures to Outsource
Emphasize that the course materials are ordered ON CAMPUS.
Be the course materials expert on your campus
Access code sales in the store and online
Sell through academic departments
Through LMS (Blackboard, etc.)
Fee based, included in tuition
Multiple licenses, delivered to individual students through the LMS, charged to the academic department
Support faculty publication of digital materials
Example - RedShelf as a partner
Know about the competitors
Amazon
Akademos
How to Address Pressures to Outsource
Perceived lack of customer satisfaction
How often do you measure customer satisfaction?
What was the action plan formulated from the last survey?
Reducing the Odds
Know the institutions goals for the store
Are goals for the store clearly stated?
Are they realistic?
Communicate/Communicate/Communicate
Tell – Keep a current list of all that the store provides
Ask
Have you asked for exclusivity for textbook (or other) sales on campus?
Exclusivity is a condition of the contract for most outsourced stores
Reducing the Odds
Operate the store as if it was outsourced
COMMUNICATE!
Financial Goals Achieved
Student Satisfaction
Positive Messages
Reducing the Odds – Tell the Story!
Know what you bring to the table Complete access for all constituencies
On campus, off campus, faculty, alumni and staff
Policies and Procedures locally derived
Not subject to corporate policies, procedures and dictates
Professional, campus specific knowledge
All course materials decisions make in the store
Access to all technologies for price comparison and sourcing
Examples - Verba / Sidewalk / Rafter
Access to technologies for digital migration
Example - RedShelf
Campus Contribution Worksheet
Campus Contributions Worksheet
Store Net Sales
Discounts All discounts - students, faculty/staff, sapecial sales, etc.Rent Commission Donations Monetary and in-kind (books to audio, etc.)Scholarships Institutional Support Cost of 3rd party partnerships that are focused on student satisfactionBad Debt Rebates In a contracted store many, if not most, of these go to home officeUtilities (on campus utilities only) Net Income Other (non-sales income) Grad, Amazon etc. TOTAL
Contribution as a % of sales #DIV/0!
Teaser Questions“Why does it matter” to each question
When you take your annual physical inventory, how do you determine the cost value of the inventory? If you use system cost as the number, how is that cost calculated?
What do you believe is an acceptable number (as a percentage of retail sales) for mark-downs from retail for product that doesn’t sell at the initial retail price?
How many full-time or part-time positions have you filled during the last fiscal year?
How many full-time or part-time positions have you not filled during the last fiscal year?
How many adopted titles are on the shelf for Fall, 2015?
How many adopted titles were on the shelf for Fall, 2014?
What is the additional charge, paid to the institution, for each dollar paid in salaries or wages? (Benefits and / or administrative charge)
Teaser Questions“Why does it matter” to each question
What is your total personnel cost, as a percentage of net sales?
What percentage of your sales for course materials are fulfilled through web sales?
What percentage of your sales for general merchandise are fulfilled through web sales?
What percentage of your course materials sales through the web include at least one SKU of general merchandise?
What is your marketing / advertising expense for this fiscal year, and how much of that number is dedicated to the web?
What is the metric your store uses for the shipment of received web orders relative to the receipt of the order?
Do you use dynamic pricing for any of your course materials?
What expenses have you purposely increased or decreased during this fiscal
What have you done
TODAY?
Reducing the Odds – Two Things:
1. If you have additional strategies that will enhance and supplement our endeavors – please send to me!
2. THANK YOU!
Contact Information:
Dennis Mekelburg
Senior Consultant
indiCo