Beyond CRM and 311: Strategies for Improving Government Services

A decade ago, a fellow by the name of Reed Hastings got slapped with $40 in late fees for not returning the copy of Apollo 13 he rented for $3 from his local Blockbuster. That hurt. But it also got Hastings thinking. There must be a better way ...

There was. And he called it Netflix.

Netflix changed the movie rental experience in three important ways. It did away with late fees. It eliminated the hassle of making a trip to the local video store (only to learn the movie you'd been dying to see wasn't in stock). And instead of leaving us aimlessly wandering the video store aisles wondering which movie we'd actually enjoy, Netflix provides subscribers with customized recommendations from friends, family and the company's proprietary movie match program. 

In short, Netflix analyzed the video renting experience from beginning to end and eliminated the pain points for customers. By doing so, it became a billion-dollar company. 

Of course, Netflix isn't the only company to revolutionize the customer experience. Amazon.com transformed the way buyers and sellers come together - simplifying, standardizing and personalizing the way you buy everything, from books to DVD players. eBay turned the way consumers dispose of products upside down - bringing auctions to the masses and at the same time fostering thousands of communities of buyers and sellers. Nordstrom proved that a profitable business model could be built on the proposition that the customer is always right.

These and other innovations have raised the bar for government performance. It's a bar many government agencies are having a hard time clearing.

A surprising 71 percent of Canadians, for example, say that public services should be even better than the private sector, but only 41 percent actually believe existing public services are better. Meanwhile, a recent Pew Research Center poll found that the majority of Americans agree "when something is run by the government, it is usually inefficient and wasteful."

In short, governments worldwide face a growing gap between the level of service citizens expect from government and what they believe they're actually getting. As former British Prime Minister Tony Blair noted: "Expectations are higher. This is a consumer age. People don't take what they're given. They demand more."

Governments have been asking taxpayers for more revenues but continue to provide what is perceived as the same old product. According to Runzheimer International, local property tax burdens went up an average of 21 percent from 2000 to 2004 (leading taxpayers to openly revolt in some jurisdictions). This flies in the face of everything they've grown accustomed to in the private sector.

"In retail, consumers are continually getting things bigger and cheaper than before," observed Ontario's Secretary of Cabinet, Tony Dean. "But for public services, we just keep asking citizens for more money for the same product. That's no longer credible. People feel as though they're paying enough."

The problem isn't due to a shortage of efforts aimed at improving the citizen experience. On the contrary, many governments have invested significant amounts of time and money trying to bolster customer satisfaction. Instead, many governments are going about improving customer service the wrong way. Four misperceptions in particular often thwart the best-intentioned improvement initiatives.