CRM Hot Topic: Public Sector v Private Sector

Article by Eric Bohl, Corporate Director of Customer Services at Tower Hamlets Council and Sponsor of the CRM National Programme:



More than half of English councils have recognised the value of Customer Relationship Management (CRM) as a way of saving time and money when it comes to improving customer care. However, recent research has found that some local authorities have been cautious about the benefits of CRM, and half aren't yet engaged in it.

One possible reason for a cautious approach to ‘signing up’ to CRM could be the bad press that private sector CRM models sometimes attract.

But in the public sector, CRM is at the forefront of eGovernment initiatives, and from a strategic point of view is cruicial. The CRM National Programme is a £4.275 million government initiative, tasked with the goal of bringing ‘clarity and definition to the role of Customer relationship management in local government’.

Many councils had a strong vision of what they wanted from CRM. For these 190 councils, CRM aims to transform the ways in which they deliver services to the citizen. Significantly improved customer satisfaction levels from these councils can show future CRM implementers that public sector Customer relationship management works. But to achieve this goal local government needs to understand the task in hand and be able to use the tools available.

Media speculation of CRM's value in the private sector has been sometimes negative, and this is compounded with the wider issues of private sector customer service. The condemnation of services like the 118 numbers, and companies that, for financial reasons, have transferred their call centre services overseas, may make a potential public sector CRM implementer sit back and question whether initiating a CRM solution is in the citizen’s best interest.

Clarity could lie in the fundamental differences between the private sector and public sector CRM model.

Private v Public Sector CRM

The use of CRM in the public and private sectors is similar in two ways. Both use the same underlying technology and principles, and both use CRM to help improve customer care.

The big difference between both sectors can often lie in the way in which each regards the customer.

In the private sector, the level of service given to each customer is sometimes seen to be based upon his or her current or perceived future value to the organisation. This often means that CRM is used by some organisations to ensure that high value customers get a high level of service, while as many transactions as possible, are automated, when it comes to low value customers.

In the private sector CRM is used to manage a large number of customers, using a small number of processes, to maximise a small number of products and services.

In the public sector each customer is valued equally. The sector’s goal is to provide each customer with a service tailored to his or her needs. CRM can ensure that dealing with a council is simple, that the customer’s needs are understood and that councils deliver the correct services to address them.

In the public sector CRM is used to serve a large number of citizens, using a small number of processes, to maximise a large number of products and services.

Leading by example

Broadly speaking Customer relationship management (CRM) enables councils to understand, anticipate and manage the current and future service needs of individuals and citizens. However CRM cannot be standardised between each council, as the services offered by each are so diverse.

A good way of defining public sector CRM is to examine how individual local authorities are implementing the initiative, and we can look to three of the CRM national project councils of Newham, Hull and Salford to lead by example."