Customer Satisfaction

State and local governments are trying to prove that the customer comes first with the help of a technology called CRM.

by / March 3, 2001
The problem started with a derelict house in Lynchburg, Va. Drinking and drug activity there led a number of citizens to call and complain to the city government. One by one, different departments began to act independently of each other, trying to solve the same problem. Over time, they filed a litany of overlapping violations against the absentee landlord. The situation came to a head when the city went to court to take the house away from its owner, only to have the judge throw the case out because of all the redundant violations filed by the city.

The embarrassing outcome forced the city to act on a problem that plagues nearly every local government. "We didnt have any way to centralize citizen complaints," said JoAnn Brown-Martin, Lynchburgs communications director. The problem wasnt just with code enforcement. Other citizens complained about getting the runaround from city officials, and of phone calls being repeatedly transferred, followed by no response.

So Lynchburg, under the leadership of City Manager Charles F. Church, launched a major effort at revitalizing how it achieved results. At the core of his plan was improving relations with citizens through better services. To deliver on that promise, the city built an integrated call center using customer relationship management (CRM) software from JPH International, a Canadian firm.

Now, citizens call just one phone number to file a complaint or to request a service. Trained service representatives use a database of scripts to gather information and then tell the citizen how long it will take to fix the problem. E-mail routes the request to the correct city department for action. If they want, citizens can visit the citys Web site and check on the status of their request, or they can use the site to file a complaint, giving them the ability to communicate with the city 24/7.

Revolutionary Relationships

But the technology that lies beneath the new results-oriented, citizen-first strategy in Lynchburg can do much more. CRM allows citizens to communicate with their government through a number of channels -- phone, fax, e-mail or the Web -- and it allows different departments to share information about a problem, complaint or concern in such a way that they can manage service fulfillment so that problems get solved and work gets done. These kinds of results are beginning to revolutionize the business of government and its relationship with constituents. "By using CRM and call centers, we have completely reengineered the way we do business in the city," said John Eagle, information technology director for Hampton. "We have not only centralized how we serve our citizens, but we have centralized our knowledge. CRM is transforming the way our organization works."

Hampton is just one of many jurisdictions that have turned to CRM technology to overhaul customer service. From cities, such as Baltimore and Chicago, to state agencies, such as the Ohio Department of Education and the Kansas Department of Revenue, governments around the country are investing in CRM and integrated call centers so they can be as responsive to their constituents as private companies are to their customers.

In fact, one of the key reasons governments are investing so heavily in this technology is the huge success the private sector has had in improving their bottom line through better service. People like it when they are treated as first-class customers by retail firms and service companies. Now they expect the same from government.

"In the commercial sector, CRM is all about making customers feel good so they will spend more," said Mark Searle, director of state and local market development for ACS, a CRM company. "In the public sector, its about enhancing your perception of government and making constituents feel good about how their tax dollars are spent."

This pent-up demand for better government service is due in part to the growing role of state and local governments. For the past several years, power and responsibility have been shifting steadily from the federal government down to the states and localities, often without any extra funding, according to a report on public-sector customer relations by the consulting firm PricewaterhouseCoopers. This has forced local governments to improve service delivery without busting the budget. State and local governments also see CRM as a way to overcome the ongoing turf battles that still rage between government departments, which stifle customer-centric service.

Then there is e-government, said Jenny Wodinsky, a consultant with PricewaterhouseCoopers and one of the authors of the report. "The focus on e-government is really driving this," she explained.

Still another reason also accounts for the growing interest in CRM. Some jurisdictions, mainly cities, have had their 911 emergency systems overwhelmed by non-emergency calls, as citizens call the three-digit number out of desperation to be heard by their government, said Wodinsky. To help local governments deal with the situation, the FCC granted cities and counties the right to use the telephone number 311, first as a non-emergency police number, and later as a general, all-purpose number for city services.

Whats different about this technology drive from other tech trends in government is that the push is coming from the very top. "This is the most top-down technology orientation Ive ever seen," said John Kost, director of sales for Siebel Systems, a major supplier of CRM technology. That view is echoed by Searle, who has helped to install CRM in Congress and at the White House. "A lot of elections are running on this theme of customer service," he said. "I see a lot of mayors who are running for election based on customer relationships, though they dont call it that."

Government-Friendly CRM

CRMs rise in the commercial sector has been dramatic. CRM revenues are expected to reach $16.8 billion in 2003, up from $2.3 billion in 1998, according to AMR Research. As Searle said, CRM in the private sector is about making customers feel good so they spend more. More specifically, CRM uses technology to link databases of customer information with Web sites and call centers so that information about the customers needs, service requirements, etc., is easily accessible through one enterprise system that is constantly available and always up to date.

CRM often uses a combination of data warehousing, e-commerce applications and call centers to gather information about customers, such as their buying histories, preferences and complaints, so that a company can anticipate what they want and, hopefully, retain their loyalty. And even though CRM and call centers arent revenue producers, they are designed to enhance the way a firm markets and sells its products and services.

Until recently, governments that wanted to use CRM technology to support citizens had to either customize a commercial CRM product to their needs or build one from scratch. In fact, thats what the city of Dallas did, using Microsofts Visual Basic application tool to create a primitive but working version of CRM for their 311 call center.

But the situation has changed recently as firms begin to deliver CRM solutions specifically tailored to the state and local market. Siebel is aggressively going after the state market and municipal utilities, according to Kost, the former CIO of Michigan. By placing CRM in strategic agencies, such as taxation, licensing and utilities, where customer contact is significant, Kost believes CRM will take hold and grow to other departments as they observe its benefits. "For the citizen, CRM is all about reducing the hassle factor," he said. "For government, its about improving productivity. If you can automate the easy stuff, you can free up the remaining resources to solve the hard stuff."

Meta Group is offering CRM to government through its Constituent Relationship Management strategy, according to John Goggin, vice president of Electronic Government Strategies. He believes the reason governments have been reluctant to use CRM in the past is the emphasis on collecting data about individuals and sharing that knowledge across the enterprise. "You cant allow that kind of information about individuals to cross-over in government," he said.

The solution is to build a CRM strategy that moves with the government statutes that restrict the sharing of information on individuals. Like Siebel, Meta Group believes in building an enterprise CRM solution within one agency and mimicking that approach in other agencies. But Goggin thinks its too premature to talk about a government-wide CRM strategy. "Nobody has been able to implement CRM at the enterprise level because privacy statutes and funding restrictions hinder that kind of strategy," he said.

In local government, where citizen needs are more pressing and contact is more frequent, CRM has been taken on at the enterprise level. ACS offers different flavors of its government CRM product so that large cities, such as Indianapolis, can implement sophisticated systems, and smaller jurisdictions can rent out an application service provider version of the same product on a monthly basis. The product, Intranet Quorum, runs on an Oracle database and is capable of managing a citizen base in the millions, or just 20,000, according to Searle. Either way, ACS allows local officials to track a citizens complaint from the moment it is called and logged in until it is finally resolved, several steps and days later.

For most governments that want to improve constituent relations, the biggest issue they face is infrastructure, according to Tricia Renee Iveson, senior marketing manager for Microstrategy. "Many governments lack a single point of entry for customer service and have multiple technical environments in which to operate," she said. Their goal is to consolidate these points of contact, rather than integrate phone calls and the Internet. However, Iveson is seeing increasing interest among governments for ways to discern how well they are serving citizen needs. To meet that requirement, governments will need a solution that covers voice, Internet, e-mail and wireless communications, as well as integration with back-end databases.

Switched-On Hampton

No matter what kind of CRM solution a state or local government implements, many consider the technology to be the easiest aspect of the system. "CRM technology is perhaps the least-complex challenge," said Siebels Kost. Instead, government project managers need to focus on reengineering, because managing citizen relations is so multidimensional.

Perhaps the best example of how to do CRM right, including the reengineering, is in Hampton, Va., where the technology has helped revolutionize city services at very little cost to taxpayers. In 1999, Hampton switched on its 311 Customer Call Center. Instead of hiring new employees, the city transferred nine full-time staff from other departments to the center to take calls, and added three additional staff members to manage the system.

The center is staffed Monday through Friday, from 7 a.m. until 11 p.m. and on weekends, when 20 percent of the calls come in. Eventually, the call center will be staffed 24 hours to answer the more than 650 calls that come in each day. A custom-developed CRM software program from allows call takers to collect information on each 311 call and to track the complaint or request as it is routed to the proper department for action. Total cost: $300,000.

But Hamptons real success has been with the way the city has used its 311 call center and CRM to reengineer the way it does business, using an integrated approach to customer service. "We used to have multiple places to call for service," said Eagle. "Now, all the calls and the knowledge about them has been centralized."

With each department providing a time frame for completing various projects, from filling potholes to trimming trees, call center representatives can specify approximately how long it will take to complete a job. With one person authorized to dispatch service, answer a question and solve the problem, the city has been able to reduce the number of calls transferred and the number of complaints about unfinished work.

The key to success, according to call center Manager Liz Nisley, has been how the city reengineered its work process so that call center staff are the first point of contact, not the individual departments. "To make this approach work, we got total organizational buy-in, especially from the departments whose customers would be heavy users of the call center," said Nisley.

Ironically, the Web has only played a minor role in this transformation, according to Eagle. Although the citys infrastructure is up to par to handle a heavy load of Web-based customer service, Eagle doesnt believe the Web is the right tool for managing citizen relationships at this point. "The Web still is not the most cost-effective way for managing customer service," he said. But as citizen confidence in the Web as a service channel grows, so will its role in Hampton. "We plan to have it complement our call center," he explained.

Ideally, Eagle would like to see Hamptons 311 call center handle calls involving every aspect of government, including state applications such as taxes, drivers licenses and so on, and not just local government problems. "A city/state interface is a possibility," he mused. "But its going to be a significant challenge on the technology side."

For more information on Hamptons CRM application, contact
IT Director John Eagle at 757/727-6064.
Tod Newcombe Features Editor