Applying Customer Relationship Management (CRM) to Government

By Pang, Leslie M. G.; Norris, Robert | The Journal of Government Financial Management, Spring 2002 | Go to article overview

Applying Customer Relationship Management (CRM) to Government


Pang, Leslie M. G., Norris, Robert, The Journal of Government Financial Management


The federal government has launched many initiatives in the past to help improve service to its citizens. Many of the efforts have been successful-- about 97 percent of the Social Security Administration's callers get through in five minutes or less. The National Park Service visitors' centers typically receive "good" to "very good" customer service ratings. Phone inquiries to the Federal Emergency Management Agency's toll-free customer help line following disasters are normally handled with a single call.1 The Center for Disease Control's automated system provides "information on demand" by allowing individuals using a touch-tone telephone to call anytime and receive health-related information-such as health requirements/precautions for international travel, signs and symptoms of Lyme disease-by phone or fax machine.2

Government needs to improve upon these successes, however. For example, President Clinton proposed the "Putting People First" initiative that included a transition to a more "customer-oriented" entrepreneurial government.3 In the context of the Government Performance and Results Act, President Bush has emphasized the need for better management performance in many areas including the basic government function of providing service to the citizens.4

A recent private industry trend involves a strategy called Customer Relationship Management or "CRM." During the past few years, the CRM market has seen significant growth-in 2000, according to the Gartner Group, organizations worldwide paid $23 billion for CRM services and software. That figure is expected to rise to $76.3 billion in 2005.(5) CRM involves an organization taking a customercentric view of its business with the aim of establishing a long-term relationship between the customer and the business.

CRM can be used by an organization to identify which customers it should focus its limited resources on and how to do so effectively. CRM, when done correctly, provides a continuum of experiences that often leads to customer retention. These experiences include inquiries by prospective customer about products and services, customer transactions, requests for information by customers and resolving customer problems. A key part of CRM is the personalization customers receive as part of their relationship with the organization.

CRM involves using tools brought about by improvements in information and communication technologies and include:

* Computer telephony integration-the computerized services of a call center that support activities such as voice recognition for directing calls, matching calls against names in a data base, interaction with the company's website and initiating an intelligent agent application to help with a caller's request.6

* Customer self-service websites-this approach allows the customers to do things themselves such as search for relevant help information, download forms and software, and review frequently asked questions.

* Business intelligence-using analytical techniques such as data mining, one can get a better picture of their customer by identifying patterns and relationships.

* Web portal-a website that provides access to a variety of content quickly and seamlessly.

* Mass customization and rapid fulfillment-a delivery process through which mass-market goods and services are individualized to satisfy specific customer needs.7

There are many examples of CRM successes in private industry such as Amazon.com8 and Dell Computer.9 Lesser-known CRM successes are:

* American Management Association, a business education and management development group, updated its call center and has significantly increased efficiency. Average caller wait times are less than 10 seconds and the AMA now makes 30 percent more in revenues on each call center representative's customer interaction.10

* Hard Rock Cafe strengthened the relationship between the restaurant and customers by building an online web community The Internet serves as a tool for capturing information about its patrons and pushing personalized information (such as upcoming concert information) to those in an effort to bring them back for repeat dining business. …

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Applying Customer Relationship Management (CRM) to Government
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