03.11.10
Customer relationship management in local government: adjusting an innovation to fit with the needs of the situation
Customer relationship management involves managing interactions with customers. In a local government context the interface with customer can be very complex and there may be other stakeholder interests to take account of as well, says Professor Tony Proctor and David McElhinney
It involves dealing with queries, complaints and specific requests and demands accurate information to be transmitted and received speedily. How well delivery of customer service is organised within local government directly affects levels of accessibility, inclusion, involvement and general care that can be offered to its citizens. As well as meeting high standards in these respects, local government needs to get jobs done quickly and economically. Its citizens, too, want immediate attention to their requests and for them to be dealt with as quickly and easily as possible.
In the private sector in recent years ICT has been harnessed to assist in the process of producing an effective and efficient CRM interface with service users. Purveyors of custom made systems to suit all needs have come into being to meet the bourgeoning demand.
However, not all innovations can always claim to be successful or rather to meet with the user’s expectations in the first instance. In the case of CRM, problems can occur with its implementation in a local government context. The complexity of the customer interface in local government is exacerbated by attempts to provide services across several delivery channels (face to face, telephone, internet websites, texting, emails, wireless email, one-stop shops, call-centres and kiosks, etc). Many of these delivery channels are relatively new innovations and place substantial demands on the effective management of CRM in local government.
CRM, in a local government environment, aims to enable councils to recognise customers who have already contacted them and to be able to locate information relating to the customer’s enquiry.
It is also intended to help in the communication of information about the customers and services internally throughout the organisation. Councils can employ CRM to build a better picture of why customers contact them and to look for ways in which they can improve the services they provide.
CRM and associated technologies capture and process information relating to customers and make this available to staff so that an improved service provision can be developed. The technology gives councils the opportunity to review the way they conduct business and to move from a departmental structured organisation to a customer centred one.
CRM is intended to facilitate the provision of quality services in a joined up and customer focused manner. In the public sector there is a drive towards social inclusion and a wish to provide an equitable level of service to everyone.
However, traditional CRM tends to be very costly and complex. Perhaps not surprisingly local government has struggled to identify a robust business case and to establish any substantial return on investment from its endeavours through the provision of CRM systems. However it is important to note that the foundations of traditional CRM are sound. Nevertheless, having the correct form of customer relationship management system in place is important for local government and facilitates the efficient and effective provision of services.
CRM needs to enable local government to have a complete view of their customers and the many and various interactions people have with their local authority. The wide variety of access channels introduced in recent years has extended the reach of local government organisations. This has provided mechanisms for direct and efficient service provision to those whose needs may be the greatest but who have traditionally found it most difficult to get those needs attended to.
Tailoring CRM to meet the needs of local government, however, is not without its problems. Experience and market knowledge has demonstrated that the concept of a single view of the customer across a council is extremely complex, unnecessary and costly. A more pragmatic and customer-centric approach is to create a single view of the customer within particular customer groups and / or segments. This approach is referred to as CRM clustering.
CRM clustering has been developed and delivered within Liverpool Direct Limited.
The strategy is to cluster customers by activity (e.g. benefits, street scene or physical assets, children, and revenues); rationalise and consolidate ICT applications down to a single application; reduce to a single database per customer cluster; and utilise or develop CRM functionality within the cluster application.
The results of this are lower cost solution; no duplication of data; customer group intelligence; shorter transactional processes; single view of the customer within the cluster; and enhanced service performance.
An example of clustering working in practice can be seen in the context of the street scene. Here, services such as refuse collection, street light reporting etc. may be branded as ‘neighbourhood information services’ focused around all access channels. It has been developed to provide citizens with easier access to information relevant to their immediate neighbourhood and to improve the methods by which they report local incidents. The system greatly improved the management and tracking of citizen-reported incidents (e.g. fly tipping and passage dumping).
It is imperative to focus on the sectors view of customers: the actual customer and his, her or its characteristics and ideas as well as the opportunity and current issues presented and the barriers to successfully meeting customer wants and needs.
Local authorities are very different from every other type of organisation. The majority of functions that local government performs have been created in isolation from each other with little or no common relationship between them. Local authorities have traditionally been organised in silos: planning, education, social services, environmental health, council tax and so on.
Today, the public sector is a blended mix of in sourced, co-sourced and outsourced frameworks with no single entity. It comprises individual and tailored bodies, agencies, trusts, authorities and relationships. Today we live and operate in a public sector world of customer tagged financing, deregulation, privatization and outsourcing. The public sector no longer demonstrates a public service ethos - if one ever did exist. It is now more a collection of individual and tailored bodies, agencies, trusts, authorities and relationships.
Let us take a typical local authority, as an example, and explore the CRM approach taken with the ‘customer’. Often the approach taken is probably wrong and the primary reasons for this are that rarely, if ever, are customer characteristics identified, established and considered.
If they were then a traditional CRM approach would fail in its application and certainly prove to be a very expensive system to implement. Instead it is necessary to consider the idea of ‘intelligence led government’. In essence this would comprise the following key elements:
?Capture all contact: passive or otherwise in single ‘places’.
?Standardisation: one way of doing things.
?Consolidation: reduce channel access points, reduce ICT applications, and be prepared to spend less.
?Contact drives strategy: exploit the contact as a driver for “reduction? in its broadest forms.
Such an approach would not harness ICT capability but the necessity of contact: the ease of data collection and the value of its exploitation. Some of the implications of such a strategy might be:
? Stop spending up to 5% of the total price of refuse contracts to speed collection the 0.3% of missed bins each week. Find out why they were missed and stop it happening again. Exploit geodata.
? Hold all benefit and revenue data in a single place (eg. education awards, fairer charging, housing benefit, council tax) and put ‘need together’. Exploit data matching.
? Cross match data with other data sets e.g. single biggest source of benefit fraud is sole person discount (25% of council tax bill if single occupier) so cross match with credit checks.
? ?’Push out’ demand to manage workflow e.g. annual education awards. Stop waiting for the rush.
? Reduce contact not channel switch. It’s simply cheaper.
? ?Hold what needs to be held. For example, children at risk, followed by relationships, history, interventions, activity and trends. Forget free school meal history and clothing grants!
An effective CRM system need not be expensive. A system such as that advocated here can help improve service delivery and customer satisfaction. It can achieve this by linking the expertise from backoffice systems essential to a mutually satisfactory service encounter. Such a link speedily presents all the relevant information in a pertinent and helpful manner. The key message seems to be that we need to be prepared to spend less, think more and dump CRM as stated on the tin. We need to be ‘customer characteristic’ led.
David McElhinney is CEO, Liverpool Direct Ltd
Tony Proctor is professor, Chester Business School, University of Chester
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