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CRM Can't Possibly Apply to Government. Or Can It?

Customer Relationship Management (CRM) is a management approach or model that puts the customer at the core of an organization's processes and practices. CRM is a familiar term to businesses that pursue initiatives to increase customer retention and profits, but neither of these motives exists within government. Nevertheless, CRM principles, approaches and tools are beginning to take hold within the public sector . Because government has the largest customer base of any service provider, it also has much to gain from applying CRM principles and practices once it gets past the terminology differences.

For example, the word customer is not universally used within government. Terms citizens or constituents are more common. There is also the duality of citizens as both customers and shareholders to consider. Our own experience suggests that provincial and municipal government bodies are quite comfortable with the term customer, federal government organizations are less so.

Treating different customers differently, as espoused by Peppers & Rogers, was quick to catch on with the private sector. Public service officials, however, are uncomfortable with this message. Citizens are all equal. There is no tolerance for actions that could be construed as being discriminatory. Understandably then, there is some discomfort with customer segmentation as done by business. Public service officials, however, have traditionally classified those they serve into major groups and agree that such classifications are necessary in order to tailor services to the needs of users and to allow users to interact with government using the media of their choice.

The concept of bonding with customers is less quickly accepted by government organizations and understandably so. Businesses hope strong bonds with customers will provide competitive advantage and lead to increased revenues. Government organizations have no competition, different desires and their customers have no option. In addition, their customers may have limited and infrequent interaction with any one department. Nevertheless, government organizations universally are striving to improve customer service. They understand that citizens expect as good or better service from government as they do from business organizations. They also recognize that relationships with customers are born of successive experiences of customer satisfaction with the whole organization across all channels irrespective of the frequency of interaction with any one department.

CRM involves strategies and processes designed to create new and mutual value for customers and the organization. The concept of mutual value, however, is not well understood by many businesses. Some simply try to make customers more valuable to their organization by selling them more products and services. Others try simply to deliver customer services at lower costs, thereby increasing short-term profits and shareholder value. These approaches have nothing to do with the creation of strong customer relationships. More enlightened firms see the creation of value for the customer as the heart of their customer relationship strategy.

What is the value for customers in their relationship with government? More efficient and convenient contact, quicker and better response, seamless one-stop shopping for a range of government services from multiple government departments: these functional benefits are certainly valued by customers. In addition, emotional value is created when customers are made to feel welcome and important. Both forms of value are important and lead to customers having genuine respect for the organization's programs, operations and people.

CRM is not just about technology. It's about delivering better services at affordable cost to taxpayers. And CRM technology can be a key to enabling cost-effective service transformation with a well considered, citizen-centric plan.