Governments have not benefited from recent advances in customer experience research that have improved products and services in the business world; rather, they still embrace a paradigm where customer satisfaction is the ultimate measure. In doing so, these agencies have missed an opportunity to improve citizens’ interactions with the state. Dissatisfaction with government is a perennial issue in politics, having resurfaced forcefully in America in 2010. One of its sources is citizens’ own experiences when they encounter government agencies and their encounters do not meet their expectations. Private sector companies have implemented various approaches to better tailor services to customers’ needs and expectations, and for governments to earn their citizens’ trust, it is essential that they learn from these developments.

Companies rightly employ surveys that detail customers’ attitudes not only about their experiences but about the company itself, recognising the interrelationship of experience and brand in shaping consumers’ behaviour. They also demand that surveys’ results have a recognisable relationship with the company’s business metrics – how do changes in satisfaction with experience or in brand perceptions affect sales or profitability?  This transformative approach has only had a limited impact in the public sector, chiefly because, in contrast with the private sector, customer satisfaction is seen as an end in itself – there is no bottom-line pressure or competition for market share driving the research, but instead a general sense that government should serve its citizens effectively.  

The sentiment that customer satisfaction is its own reward is noble, but it has blinded government agencies to the possibilities of their customer research. Their current approach is flawed for three reasons: satisfaction has been proven to be a weak indicator of human behaviour, measuring satisfaction does not capture performance relative to other options, and satisfaction metrics are rarely connected to operational and financial performance measures. By complementing existing customer experience research with a broader examination of attitudes and measures of customers’ willingness to pay for an alternative method of receiving the governmental benefit, government agencies can glean a more complete understanding of their customers, one which can also be more easily related to their fiscal targets.

When someone begins her interaction with a government agency, she approaches that encounter with attitudes that shape her perceptions of the experience. A person’s general attitude (positive or negative) about the federal government can shape her experience when she interacts with a specific agency. Unless government agencies measure this “attitudinal equity” (in the same way that retailers or financial services firms must look at customer experiences in the broader context of attitudes towards their brand and industry), they will have a limited view of their customers’ experiences. 

Additionally, government agencies typically only measure the satisfaction of individuals with the service they provide, without examining it in a competitive context.  When an electronic goods retailer wants to measure customers’ satisfaction, it measures their satisfaction with its competitors as well. Government agencies rarely face the same explicit competitive forces that private sector firms face, but their customers often do have similar experiences about which they can assess their attitudes. Comparisons can be made to previous experiences or to experiences with similar activities in the private sector. 

The limited nature of competition for many government services means that common corporate measures like share-of-wallet often do not make sense, but examining the customer’s experience in financial terms is still possible. For most government services, one may purchase assistance in dealing with the relevant agency (i.e. hiring a professional to help with one’s taxes). Indeed, using these services or products may be “voting with one’s feet” and expressing dissatisfaction with an unmediated interaction with the agency. Examining a customer’s willingness to pay to avoid a task (for example, by having someone else complete the task for them) provides a useful measure of his experience, particularly if it is analysed in conjunction with a benchmark that compares a customer’s responses to those of consumers with similar demographics or attitudes. 

Agencies must better understand the economic implications of customers’ experiences and connect these measures to their financial metrics for cost and citizen burden. To do so they should analyse how much customers would pay to avoid the burdens imposed on them by their interactions with public sector service providers and examine these issues in a competitive framework that also incorporates customers’ more general attitudes toward the agencies serving them. All government agencies should consider what alternatives there are to interacting with them, and measure customers’ willingness to engage (and subsequent satisfaction with) those alternatives. As government agencies across the developed world compete with taxpayers and creditors for funds in the current fiscal environment, their survey research must recognize the need to provide competitive services in order to earn their share of budget. 

For more information, contact Zachary Lewis in Synovate's Public Sector Group.