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In a small northern English town, a central car park was for decades a hive of comings and goings. Then local council men arrived, tarmac, paint and regulation notices in hand. Now the car park is full of frustration; customers circumnavigate in vain for a permitted space, ending up parking hazardously on a side street, causing annoyance to residents.
The council, you see, has failed to appreciate that the car park usage has changed, that the customer segment now hogging the reduced number of parking bays, and avoiding the no parking zones, are 'all day parkers' working in local businesses. They arrive early, supplanting the ‘come and go’ shoppers. The cause of this market change is a supermarket; since its arrival, the small butchers, grocers, and bakers have slowly changed into wine bars, mobile phone stores, and retail outlets. Where the shop assistants used to be local and walk to work, the new business employees are from out of town and drive.
Inside-Out
The efficient answer to this market change would be to designate long and short term parking bays, based on research; backed by public relations with local business’ on the advantages of the local train. But nothing is done to improve the parking facilities, whilst wheel clamping and fines are imposed on angry drivers with no where else to go. There isn't even a number on the regulatory signs for customer feedback!!
The council, who have won awards for their CRM system, is doing what many public sector organisations across the world are doing – trying to modernise by increasing efficiency so that services can be improved. Although just what their targets are for car parks is a mystery – that every one is tarmaced with marked bays, maybe? Or, that everyone is treated fairly and has x metres of parking space? Whatever it is, just like a great many other public sector initiatives, it's obviously being determined inside-out, instead of outside-in. It's process driven instead of customer driven. There is an obvious gap between the vision for car parks and operations - namely a 'how to' marketing strategy. It's a surprise they haven't started issuing self service, chose your bay parking allocation by internet to meet e-services targets.
Customers Given a Back Seat
The realisation that the customer has still not been invited to the 'modernisation' party hit me at a recent London conference held by The Institute of Economic Affairs on Enabling Government Efficiency. Despite assurances by the Office of Government Commerce that the UK Government’s modernisation drive (currently focussed through the Gershon Report) was to reallocate resources from back office to front office for service improvements, customers still seemed to have a back seat -somewhere behind the back office. (see The Efficiency Programme – David Rossington, Office of Government Commerce) On the first day, only David Varney, Executive Chairman of the newly formed HM Revenue and Customs, had customers in his heart. His advice was to think differently; to stop imposing burdens on the public and turn them into services. For example, the Department of Environment could turn 60 page regulatory documents on cattle movements, into channel of choice location services for farmers.
New Management Techniques
From the rest, there was great advice on efficient, professional, inside- out management techniques picked up from eager management consultants.
Missing Link
Public Sector thinking has definitely moved on apace in the last few years; but there is a missing link. These techniques should be used AFTER the customer experience has been established (eg that people feel frustrated driving around the car park); the customer proposition determined (that there are spaces for the long term segment and spaces for the come and go shoppers segment); and with mechanisms to constantly engage and build up customer feedback, co-creation and commitment (a telephone number on the regulation sign at least, if not a direct electronic link back to the civic hall and maybe an open source car park design community facilitated on the internet).
Government needs marketing. For this is how a noble vision for society, gets turned into operations. It should concern us all that customers are relegated to a back seat - it’s our money and our societies they are building. If Vodafone isn’t customer centric we can turn to another supplier but not with public services. If marketing does not take its place in their lexicon of management disciplines, then Government will suffer the same fate as innumerable corporates who have failed to become customer focussed in a cut cost, sack staff, implement IT, and re-engineer process way. The Public Sector would do well to learn lessons from the world of commerce, but not to follow.
Customer Relationship Marketing
Marketing is the way the public sector should allocate their scarce resources to the right causes. By using evolving relationship marketing techniques for,
the public sector can meet their targets effectively and moreover build organisations adaptive to change (see Seven Ways to Improve Customer Value). They may not have competitors but they do need to keep up with the expectations set by the commercial sector. But it must be the new customer centric techniques they adopt, not the mass marketing techniques of old.
- Examples:-
- The Veterans Agency co-created with Second World War Japanese POW associations the scheme to pay additional pensions
- Fire & Rescue Services work with school children to get fire prevention information to the children’s elderly relatives who are often hard to reach by any other means
- Inland Revenue appointed a Director of Marketing and segmented their whole customer base before designing specific services for each group
- The Police are designing a service proposition and a more co-ordinated experience for non- emergency calls starting with relevant situational touchpoints
- The Dental Practice Board use customer feedback to process owners to constantly improve service. Where processes cross functional boundaries they pair up people into 'living bonds', this has led to a more agile organisational structure.
Barriers
But there are several difficulties with this:
1. Public bodies have misgivings about marketing. At best it’s a cost, at worst an anathema to democracy, encapsulated by the 4 Ms *
* Chapman & Cowdell, New Public Sector Marketing - 1998
To overcome: New marketing techniques and knowledge transfer, should be put into relevant language and adapted for public services e.g. segmentation for customer need, rather than customer value. The public sector context needs to be understood e.g. the need to treat customers fairly, and the greater number of stakeholders. Techniques for internal marketing need to be employed (see Change Management)
2. The advanced customer centric techniques that will work best in public service need a mature ‘customer think’ culture and infrastructure (see Customer Centricity, David Rance) not found in the public sector.
To overcome: Harness the good work being done on programme management and ensure the capabilities needed are built in line with a marketing strategy which links the departmental vision and PSA’s to operations. (see The Must Have Customer Strategy)
3. From whom does the public sector learn the new techniques? Management consultants frequently don’t understand them; marketing services are still lagging in their maturity (see Choosing Marketing Service Suppliers) and private sector marketers are often frustrated by the public sector culture.
To overcome: The Driver and Vehicle Licensing Authority (DVLA) uses their PACT (Partnership achieving change together) initiative to achieve business transformation. Currently this is with IBM and Fujitsu and means DVLA staff report to IBM and IBM staff to DVLA managers in an R&D approach. PACT should include forward thinking Marketing Services. This knowledge transfer/co-creation approach was backed by recent research into the use of marketing in the Fire and Rescue services. (see Blazing a Marketing Trail – Kevin Rudge, South Wales Fire & Rescue Services)
Customer relationship marketing in the private sector is frequently mission critical, in public services it is often life critical. At the very least it may keep the peace in a small town in the north of England.
- Kevin Rudge, South Wales Fire & Rescue Services
- Nicholas Inskip, Bedfordshire Fire & Rescue Services
- Paul Crick, IBM, Business Consulting Services
- David Rossington, Office of Government Commerce
- Chris Hill, Portrait Software
- Moira Clark, Henley Management College
- Speakers at, Enabling Government Efficiency Conference 2005
- The many Government organisations I have talked to over the past 6 years
Further Reading:
1. Who you gonna call in the new e-government world? – By Sitel
2. Health Services with a Smile – FT News
3. CSA Failures Highlight Need for Change Management
4. Case Study - Knowsley Metropolitan Borough Council
5. E-Government – Canada Increases its online lead – FT News
6. Customer Centric Government – Graham Jarvis
7. CRM for Government – Jennifer Kirkby, Gartner
As always please add your comments to this story by clicking on the 'Add your own comment' link below.
Replies (3)
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Jennifer
Having worked on a large government Citizen RM programme for over a year, I share your misgivings about how customer management is sometimes implemented.
However, I think you are wrong to suggest that "lean thinking" is not able to cope with the variation in service environments, (by implication because it comes from a manufacturing environment).
The leading edge of lean thinking today is about "lean consumption", rather than lean manufacturing.
It is guided by six principles:
1. Solve the customer's problem completely
2. Don't waste the customer's time
3. Provide exactly what the customer wants
4. Provide it where it's wanted
5. Provide it when it's wanted
6. Continually reduce the customer's time and hassle in solving their problems.
All this whilst continually reducing the provider's costs.
Together with the various tools within the lean consumption approach, it provides the best approach to designing, developing flexible public services and continuously improving them to reduce costs.
The variability that occurs in services is handled through developing a "customer management framework" that describes how different touchpoints should be handled in different circumstances AND by empowering front-line staff to interpret the framework appropriately when dealing with citizens. Just as it is in non-lean environments.
If you want to learn what lean consumption can really do for service industries in general and public services in particular, take a look at Womack & Jones new book "Lean Solutions". You will definately find it worth your while.
Graham Hill
Independent CRM Consultant
Thanks (0)Graham
Thank you for your update. I will research this further as you suggest. I would like to know how this is built into process a little more - so few people seem to measure these things to any degree of depth or accuracy. Of maybe the point is that people should be doing it, but are not at the moment.
Many regards
Jennifer
Thanks (0)Jennifer,
I very much agree with the general thrust of your latest report.
However, like Graham Hill, I suspect you’ve missed what 'lean thinking' is all about in the service context.
This is hardly your fault. Indeed, the number of people who’ve actually made the conceptual leap from the application of outside-in, end-to-end, ‘lean thinking’ in the manufacturing context to its application in the world of services – looking at the nature of demand (and how best to respond to it . . . or, in the case of ‘unwanted’ service demand, such as progress-chasing calls, how to avoid it), the flow of work (including avoiding unnecessary batching and queuing) and the optimisation of value as seen from the customer’s perspective (including the identification and elimination of ‘waste’) – is vanishingly small at present.
However, the word is spreading rapidly, and more and more case studies are now emerging in the public sector and service arena.
For instance, there’s whole day devoted to the application of ‘lean thinking’ in healthcare in Stratford-on-Avon on 25 January 2006, organised by Professor Dan Jones and the Lean Enterprise Academy (see http://www.leanuk.org/lean_summit.htm).
Coupled with 'systemic thinking’ (around how to create genuinely systemic organisations and to optimise performance across disparate functions) and ‘change management thinking’ (around how to facilitate beneficial, sustainable change in organisations), I'd argue that ‘lean thinking’ is essential to addressing to the issues of the "marketing" of public services which you outline in your paper.
I was delighted to note in your response to Graham Hill's comments that you’re keen to explore the world of ‘lean thinking’ in the service context in general and in the public sector in particular.
If you’re looking for useful sources, Jennifer, I'd suggest you start with:
(1) The report, “Towards A Citizen-Centric Authority: Beyond CRM, e-Government and the Modernising Agenda in the Public Sector”, June 2004, ISBN 1 8981 50 07 9, published by the Hewson Group. I confess to being a bit biased about this report, as I was one of its co-authors. I’m sure, though, that I could arrange for you to be sent a copy, if you’re interested.
(2) The book, “Sense and Respond: The Journey to Customer Purpose”, by Susan Barlow, Stephen Parry and Mike Faulkner, ISBN 1 4039 4573 X, published earlier this year.
(3) John Seddon’s website, www.lean-service.com.
Do let me know if you'd any further pointers.
Bye for now,
Alan
Alan Meekings
[email protected]
Thanks (0)