Pennsylvania College of Technology Constructs a Competitive Buyback
Adapting in a changing industry
For years, Matt Branca, director of The College Store, has looked for a way to address the store's local competitor who buys books across the street from campus each term. After transitioning to the MBS system, he felt the store finally had the resources needed to make this desire a reality. With a new rental and loyalty program in place, Branca decided there was no better time to integrate updated strategies with the goal of winning back buyback business. So, the store devised a plan that ultimately allowed them to purchase more books, gain more traffic and change students' perspective of the store.
A new approach to promotional dollars
One of the most significant changes the store made involved the reallocation of their promotional dollars. In the past, they had spent the money on giveaways, offering everything from t-shirts to iPads and even free pizzas. The prizes had done little to promote buyback or to provide an advantage over the competition, however.
"For years, I thought we had to have these great giveaways, but students just don't care about them. We realized what they really want is more money, so we decided to give it to them," explained Branca.
This year, the store worked with their buyers to put their promotional money to good use. They used the funds to increase various wholesale titles by up to five dollars.
"Students don't listen to individual title values, they listen to the total; they'll go wherever that number is the highest," he said. "So, we strategically placed our lead buyer in a tent across from the competition and only offered our special pricing there. He knew how to have fun with it; he joked with any student who went across the street that they'd be back, because he knew our prices were higher — and nine times out of ten, they did come back!"
According to Branca, no one questioned why the store wasn't offering prizes during buyback; the students were content to receive more cash for their books.
"I honestly don't think they even noticed," he explained. "It's all about how much you're paying. This way, they got more money, we bought more books and everyone was happy."
The store also adopted the policy of purchasing damaged or old edition titles at a reduced price.
It provided us with a way to capture business from students who would have otherwise sold their books to the competition.— Matt Branca
"In the past, students have been upset that we wouldn't accept certain titles and, as a result, would bring all of their books over to the competitor," he explained. "Even though the price worked out to be the same, the student felt better because the competitor bought the damaged books."
By paying as little as one dollar for these titles, the store was able to capture more books overall. Whenever possible, these titles were sent to One Planet Books for recycling, allowing the store to recoup some of its lost revenue.
"There was no doubt in my mind that our competition was disappointed with their results this term," he added. "It took the books out of their hands and allowed us to enhance student perception of our store, so that's a win-win."
In total, the effort cost about $2000; a small price to pay for the results the promotion brought, according to Branca.
"This approach didn't cost us that much and it turned out even better than we expected," he emphasized. "It provided us with a way to capture business from students who would have otherwise sold their books to the competition."
Offering fair market value for retail titles
Branca and his staff also dynamically priced their buyback titles. They evaluated approximately 300 titles that were being bought back for store use and adjusted over half of those to make their price match or beat the current market value.
"We compared prices being offered from Alibris.com to what half of our retail price would be. Then, we dropped some 250 titles to be above Alibris' price, but not as high as half of our retail selling price. By lowering some prices and raising others, everything balanced out in the end," he explained. "Overall, the strategy allowed us to pay students fair market value while still protecting our margins."
To ensure the new practice was clearly explained, buyers were instructed to use the term "market value" when communicating with students, instead of the typical retail, wholesale or half price phrases.
"We were prepared for arguments but, surprisingly, we didn't have a single complaint," Branca described. "Plus, our retail buy numbers held steady to last year, but dollars spent were down over 10%. That just goes to show, it's okay to change your prices. You don't have to pay 50 percent of the retail price to have a successful buyback."
"As long as you're paying a fair price and can explain it, students will be happy," he added.
Our last system didn't support a loyalty program, so we were eager to start one when we switched to the MBS system.— Matt Branca
Promoting return visits
For the past 12 years, the store has offered Buyback Bonus Bucks to students who sell back their books. This year, they continued that promotion with a coupon that was good for $10 off a $40 purchase of Penn College clothing or gift items.
"We gave Bonus Bucks to every student who stopped by," he said. "Students have cash in hand after buyback, so why not give them an incentive to use it in your store?"
The promotion is a direct counter to their competition, who offers a voucher for $8 worth of chicken wings at a local bar for every $100 sold in books. By the end of buyback, 400 coupons had been redeemed at The College Store with an average gross purchase of $63.58 before the discount.
"We found that over 50 percent of students spent more than they had to for redemption," he added. "Our clothing and gift sales were up over 16 percent from the same week last year, so it was very effective."
As yet another way to encourage traffic, students could also earn loyalty points for the store's new Wildcat Rewards program.
"Our last system didn't support a loyalty program, so we were eager to start one when we switched to the MBS system," he said. "We currently have about half of the student population signed up for the program; it's been very successful for us this year."
Students received 25 loyalty points for each book sold; every 500 points then equates to one $25 gift card redeemable at the store.
"The idea is that, if students buy and sell all of their books with us, then they have the opportunity to earn at least one $25 gift card per semester, or $50 per school year," Branca explained. "We budgeted about $30,000 per year for the program, but it's been so popular that if everyone cashed in their points right now, then it would cost us about $50,000."
During buyback, approximately 10-20 percent of students cashed in their loyalty points, further increasing traffic.
"It's just another benefit we can offer that our competitor doesn't," he said.
Building a successful buyback
The store's Buyback Bucks promotion brought students back into the store, even after the event was over. As a result, they were able to increase clothing and gift sales significantly, as well as offer an additional incentive over their competitors.
By taking advantage of all the resources available to them and putting in their own extra effort, The College Store crafted a successful buyback that accomplished all of their goals, and then some.
The store's total dollars spent, wholesale dollars and retail dollars were down from a year ago; however, much of this was due to their new rental program which accounted for 523 titles returned. The total quantity of books purchased was up by over 100 and, with rental taken into account, their buyback — by number of books purchased — is up considerably. Dollars spent, with rentals included, increased as well.
"Overall, we spent less, but paid fair price instead of overpaying for some titles and offering nothing for others," Branca said. To others looking to update their buyback policies, he has one suggestion:
"Do everything in your power to offer students the best price," he emphasized. "Just because you've always done something a certain way, doesn't mean it's the right way; experiment and find what works best for your store and your students."
About Pennsylvania College of Technology:
- FTE: 5,127
- Used resources to offer higher prices based on market value
- Implemented dynamic pricing
- Increased clothing and gift sales over 16 percent by using Buyback Bucks
- Encouraged return visits with their loyalty program
- Increased total quantity of books purchased and dollars spent as a result
About MBS Textbook Exchange, LLC:
- Gives partner stores access to the largest inventory of used titles in the industry
- Loyalty program rewards customers for purchases in-store, online and at buyback
- Offers a wide range of promotional materials to support all textbook-related events