Customer experience: addressing the difference between councils’ and the private sector’s competitors
There are many differences between the public sector and the private sector, but do these differences drive the customer experience, or are the customers themselves the differentiating factor? In this thought piece we consider where this difference lies, what causes it and how organisations can improve customer experience.
Is there a difference between customers of the public sector and the private sector?
When working with councils and using the term ‘customers’ we often hear the phrase “well they have to come to us, they can’t go anywhere else”. Many customers who engage with councils have no choice in the matter. In other instances, some services offered by public sector organisations can also be purchased from private companies. People have access to healthcare via the NHS but there is a perception that private health care provides a better experience, if the option is available and the customer can afford to pay. Likewise, council services are generally viewed as inferior where an equivalent private service is available. This is so, despite views that councils are considered more trustworthy than private companies.
The groups of people more likely to take up private services (eg private social care and early years services) may be seen as different customers. Yet they still interact with the council. Although engaging much less than other residents, they are still council customers, at the minimum, receiving waste collection services and paying council tax.
Ultimately the customers are the same, so this points to the experience being the difference.
Traditional service quality surveys presented a 74% overall customer satisfaction in public sector, compared to 87% in the private. Furthermore, Zapico-Goni and Wholey (2007) conclude that customer experience is more effective in the private sector compared to the public.
So why are the experiences different?
A big factor is the reason why people approach the organisation. In most instances, people go to private sector companies of their own accord. They purchase a product or service based on the value they assign to the item, or the outcome, being offered. On the other hand, people go to public sector organisations for services they believe they are entitled to. This reason for engagement shapes the customer’s perceptions, emotions, and expectations, which in turn sets the foundations of their experience with the organisation.
Secondly, private sector companies have competitors and they must prioritise customer satisfaction to be rewarded with continued custom and additional revenue. In contrast, local authorities provide statutory services, often holding a view that they need not convince customers to choose to engage with them. As a result, creating a positive customer experience has not traditionally been as high a priority. More recently, where this has been an aim, reductions in the levels of resources and stricter eligibility thresholds in some services have hindered this.
Unlike private sector companies, increasing customer satisfaction in councils sees no direct correlation to increased revenue.
A further factor is the council’s purpose and how it views its duty to the community. Whether as an enforcer of, or a servant to the local community, this self-perception influences the council’s view of its customers, how it engages with them and the resulting customer experience.
Why does customer experience matter?
Good customer experience positively impacts the organisation as well as the consumer.
For councils it leads to:
- more efficient, effective journeys to give customers what they need – reducing wasted effort and saving cost
- greater customer satisfaction – reduced complaints
- better engagement and relationships with our customers – encouraging earlier engagement and more chance of earlier problem resolution
All these outcomes would indicate good performance and more importantly, align with many a council’s strategic aims.
How do we improve the customer’s experiences?
Understanding the customer is the first step to improving customer experience. We must ask ourselves…Who are they? What kind of situations are they in? Who do they have around them?
We continue by:
- Understanding their needs – Why have they approached the council? What do they need versus what they want? What outcome are they trying to achieve?
- Understanding their expectations of the service – What do they think we can do for them? How quickly (if at all) do they think they will get what they want? Are our messages clear in shaping their perceptions and expectations?
- Understanding their experiences – What is our current service offering like? What have their past experiences been with the council? How would they like to see the service working?
It is imperative to ensure we do not make assumptions at this point. Our approach at Ignite Consulting places importance on engaging with customers to ensure an accurate view of their experience. We encourage utilisation of data available to identify clear insights and help make evidence-based decisions. Unless we grasp customer frustrations, the positive parts they encounter and their suggested changes, we will continue creating service offerings based on partial and opinionated views of our customers.
Customers across public and private sectors are mutual but have differing reasons to engage with, and differing views of each sector. This, along with a handful of other factors, influence the customer’s experience when engaging with local authorities specifically. The incentives and drivers of private sector companies along with councils’ positions on their own purpose and their customers, have resulted in differences in customer experience. To resolve this, we must better understand our customers through direct engagement and data analysis, throughout the process of designing future services.