Local Authority - Stop calling Residents Customers

There has been a growing trend in local authorities over the last decade to refer to their residents as customers. We’re now seeing more and more Customer First strategies coming out. Unfortunately in referring to residents as customers we are setting the wrong mindsets in how we deal with them.

Taking a definition from Investopedia, a customer is:

“An individual or business that purchases another company's goods or services. Customers are important because they drive revenues; without them, businesses cannot continue to exist.”

Customers are important to commercial organisation’s as they are the ones purchasing goods and providing the cash for that business to operate. It therefore makes sense that they look after their customers as much as possible to ensure that they are repeat customers. There is an obvious return on investment in ensuring that customers are happy / delighted with the goods or service that they’ve received.

Conversely a resident is:

“A person who lives or has their home in a place”.

A resident is not a person buying goods or services, and even in the odd circumstances where they are, a local authority is not competing with other local authorities to win or retain that customer.

This is important as it defines how you need to view your residents in order to serve them well.

As a commercial organisation, they can afford to spend as much as required to deliver exceptional service based on the increased cash flow that repeat and satisfied customers give you. At a local authority you have a limited amount of money and you should serve your residents as well as you can afford to. If you are currently delivering a 6/10 service then the cost increase to deliver an 8/10 service might not be affordable and does not bring extra reward into the council.

For a commercial company going from a 6/10 to a 9/10 may make financial sense due to increased revenues. For a local authority it does not.

Therefore, we need to see residents for what they are, and that is residents. No resident is going to be offended by being called a resident. Once you have established the right mindset to treat residents as well as you can afford to then the second most important is moving from a Customer First model to a Resident Second model.

Now, I don’t actually expect anyone to publish a Resident Second strategy, that might open a few doors for complaints, but it is actually the way to go.

As we’ve already discussed, your residents aren’t customers, there is no financial advantage for you to treat them like customers. They have no choice where they shop, unless they choose to move. However, in the vast majority of cases, I’m sure the customer services of a local authority is quite far down the list of reasons to move in or out of an area. So your residents are you residents. If they want a council service they have to come to you. Improving that experience might make them a bit happier, but if they want a repeat service, they still have to come back to you. And financially you’re no better off if they do. In fact in most cases you’re worse off if they do.

So why Resident Second? Let’s look at the complete end to end process, maybe making a Planning application as an example. How much of the process is undertaken by the resident and how much by the local authority? In most cases, once the plans have been submitted that is the resident's tasks completed. The local authority in this instance is probably doing 90% of the work. This is repeated across multiple services multiple times. Therefore to create efficiencies we have to focus on the department, or in simpler terms, Staff First. Saving 10% of 90% of the process is a lot better than saving 10% of 10% of the process. And if you can save time and efficiency of the back office process then you are actually improving the resident experience at the same time. Now build in some touch points, automated updates and ease of application and you have a set of happy / delighted residents.

I recently ran a poll on Linkedin that asked the question as to whether a resident would rather complete a paper form and have an immediate answer or an online form and a two week wait. Which lets face it is what happens the majority of the time.

The response was roughly 60:40 to the paper form, which shows that for residents, speed of service is rated higher than ease of access. Local Authorities have spent huge amounts of money on the ease of access side, making portals and customer accounts and forgetting that the real win is to turn round the service quicker. Service Design generally starts with the customer, but we actually need to work backwards to them. What is the outcome they want to achieve and how quickly can we do it. The focus has to be on the back office service. This will ultimately mean less failure demand calls, less chasers, and less enquiries into customer Services (or Resident Services as we now need to think of them). 60% of respondents to the poll were happy to fill in a paper form. Remember that as you continue your crusade to build everything into an online form or design services to delight customers.

Another consideration here is to remember that 80% of your residents probably only contact you once or twice a year. They are the silent majority and they cost you the least amount of money to service. When they do contact you it's important to them and should be dealt with swiftly and efficiently.

20% of your residents probably contact you frequently, it's highly likely that they cost you 80% of your budget to serve (using the Pareto principle). They are the residents that need exposure to you and your services, but they still need to be dealt with efficiently. It is also unlikely that this 20% are online users of your services, much preferring face to face contact.

Again these are not customers. They have no choice. They need you and they need your help. They are residents of your borough. You need to serve them as well as you can within the budgets that you have. Improving their customer service does not make their need go away or increase your budgets. Treating them as residents and improving the resident service you provide to them, might help their needs reduce, but your budget is what it is.

By treating them as residents of your borough, you are thinking of them as a person, by thinking of them as a customer you are treating them as a commodity. You are trying to improve the lives of your residents, not improve the experience of your customers.

And as a resident the processes that occur within the service are the ones that matter the most.

For the 80% they may appreciate online services, but only if the service behind it can match that. If you look at the commercial world then it’s quite clear that the customer is now expected to undertake about 90% of the work themselves. In a local authority it's almost the exact opposite. The balance of this needs to change for local authorities to be able to afford sustainable services.

Take the focus off trying to delight the customers or improving customer service. Focus on the staff and the services you provide. Make these as efficient and effective as you can. Make the resident do more of the work. Make your internal processes the first thing you fix. Fix the way that your staff work first Then you can work out the best way of serving the Resident Second.