A make-over for council-citizen interaction

Like other public services, local authorities need to make more than just short term cuts – they need to be looking for all opportunities to change the way they do things in order to achieve long-term opportunities for savings. A prime area of opportunity is around customer management, the focus of a recent report from the research arm of the IT and digital management association, Socitm.
‘Better served: customer access, efficiency and channel shift’, published on 15 February opens with the comment: “It is hard to imagine a major customer facing business, public or private, trying to run its business without top management knowing how many customers it has, the volume of enquiries received through the main access channels, or its most popular services by volume and cost-to-serve. And yet this does appear to still be the case with most local authorities today.”
Cost Savings
The Better Served report goes on to argue that there is significant potential for savings by local authorities through reducing the volumes of phone and face-to-face contacts they get, and shifting more contacts to the web. This can be done without sacrificing customer satisfaction – in fact the reverse is likely to be true, as part of the trick is to resolve the same number or issues, but with fewer contacts involved in each issue.

The scope for savings lies in the unit high cost of handling phone and face-to-face contacts – estimated from Socitm’s own data at £7.40 and £2.90 – and the fact that few councils have yet exploited opportunities to reduce the high levels of avoidable and unnecessary contacts most of them continue to receive into these channels.

Added to this, few councils have adopted determined, corporate-wide initiatives to shift incoming enquiries to the web channel. Not only is the cost to serve significantly cheaper, the marginal cost of additional web enquiries is virtually zero. This contrasts with other channels, where servicing more enquiries essentially means taking on more people to handle them.
Barriers to success
There are two key reasons why councils have not made more progress in this area. The first lies in the fact that in most councils, no one ‘owns’ the customer. Traditionally, service departments (planning, social services, environment) have managed their own customers. Even where councils have made moves to reap efficiencies by setting up corporate customer service functions, key service areas have often been allowed to remain outside of these arrangements. In addition, the corporate website – the major source of potential savings on customer enquiry handling – is often managed in communications or IT, and remains separate from other customer channels.

The second reason customer management is not more efficient in most councils comes down to lack of management information. In order to manage customer enquiries efficiently and effect changes that will lead to savings, decision-makers need easy access to comprehensive customer enquiry data from all services and channels. The fact that his is not currently the case in most councils, as evidence laid out in the report shows, is in part due to the problem outlined above, namely that customer contact continues to be handled through a range of separate pockets and silos, including service departments, customer services, and web teams.
The road to better contact
The report provides ten conclusions for councils that wish to sieze this key area for improvement.
Firstly, it is pointed out that councils can make significant cost savings through better management of customer access.
Birmingham City Council’s business case for its Customer First Programme anticipates £197.4m of cashable benefits over ten years, while Tameside, a much smaller metropolitan district, is looking at savings of £1m over the next four years, just from better management of the front office. Since 2007, Surrey County Council has reduced the cost of phone and web contacts from 79p to 49p per enquiry and since 2007 has saved £175,000 in its contact centre and an additional £150,000 elsewhere by reducing avoidable contact.
Reducing volumes
The report highlights that cost reduction comes from reducing volumes of phone and face-to-face enquiries.

The focus in volume reduction needs to be on the phone and face-to-face channels. If volumes fall, fewer people are needed to service them and staff can be redeployed or reduced. However, if web enquiries rise because of channel shift or just because the web is easy and available 24 x 7, the cost of these additional enquiries is almost zero. All the case studies featured in Better Served have seen or anticipate falling phone and face-to-face and rising web contacts.

The report suggests that there are three main ways of reducing call and face-to-face volumes without reducing customer satisfaction.

Firstly, more enquiries should be resolved at the first point of contact. Professional customer service approaches and common standards can make a difference here. Secondly, avoidable contacts should be reduced by providing more and better information at appropriate points in the customer journey, setting service delivery expectations and delivering to these expectations. Thirdly, people should be strongly encouraged to self-service their enquiries via the web (this should include complex transactions as much as simple information requests).
Better Channel management
Customer channels must be managed together to reduce volumes, the report suggests.

Reducing phone and face-to-face enquiries can be most readily achieved where all customer channels are managed together. This works because a shift in channel is actively encouraged, for example, customer advisers on phone and f2f channels can play a key role in making customers aware of self-service options. What’s more, problems in one channel that might become avoidable contacts in another can be dealt with quickly, for example, customer advisers can advise the web team and service departments about failures of web content and usability that create avoidable contact and inhibit channel shift. This approach also makes it clear who ‘owns’ the customer.

It is advised that full data from all channels is needed to manage customers efficiently: it is unlikely to be available where channels are managed separately.

Socitm’s research suggests that few councils can easily say how many enquiries are coming in through each access channel, which service/channel combinations generate the most contacts and avoidable contacts, and which high volume phone and face-to-face might be the best candidates for volume reduction and channel shift. This sort of data is much more likely to be available where customer handling is centralised. Data about outsourced services may be difficult to obtain unless this is made explicit in the contract.
Customer Data
Collecting customer data for analysis to identify improvement is difficult, but not impossible, the report says.

Our research shows that few authorities are capturing anywhere near comprehensive data on customer contacts, except where this is easily automated, as with web and interactive voice recording (IVR) channels. Even with a professional contact centre in place, many councils have allowed some services to run their own customer contact independently, and that these contacts may not be available for analysis. Some calls will continue to go direct into the back office. However, robust customer data can be captured, providing that there is the will to do it and the technology is in place.

The report says that benchmarking highlights variations in management of customer access and opportunities for improvement.

Our investigations for Better Served show a wide range of practice in the way that councils handle customer contact through the main channels of face-to-face, phone and websites. This is most easily seen in the results from Socitm’s channel value benchmarking cohorts. Volumes of enquiries vary widely too, as can be seen in the CVB data but also in the call volumes data from the Cabinet Office’s Performance Management Framework. Not surprisingly, there is also huge variation in cost-to-serve.

Data analysis is valuable as it reveals opportunities for front and back-office collaboration in cost-saving process improvement.

As well as identifying simple solutions to avoidable contacts, like improving information around a service, analysis of data from the front office can identify services where process improvement might reduce enquiry volumes or lead to a self-service solution. Better Served describes process improvements in a range of services where a process involving several steps or paper forms has been simplified and enabled for self-service.
Multi channel integration
Maximising customer access efficiency requires an excellent website integrated with all other customer channels.

It is no good setting out to reduce avoidable contact or effect a major shift to self-service if the website itself is not up to the job. If a customer cannot do what they set out to do on the website, they will lose confidence and revert to traditional channels. Data from the website take-up service shows that on average, between 8 per cent and 35 per cent of web enquiries to council websites currently fail. All the case studies featured in Better Served have improved their website as a precursor to, or in tandem with, efforts to channel shift and reduce avoidable contact.

Finally customers need to be made aware of services on the web and be encouraged to use them

There is an ongoing shift to online information and services as more and more people use the internet at work and at home. The rise of the mobile web means more and more people with constant access to the web. However, this natural migration to the web, helped by the 24 x 7 convenience factor, will not do it all, and particularly in the short term, local authorities will need to make customers aware they can do things online and maybe encourage them to break ingrained habits, particularly among long-term, heavy users of council services.
The report is free of charge to subscribers to Socitm Insight (most councils do). The report is available at www.socitm.net. Others can buy the report for £295 (£275 to Socitm members).

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