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must demonstrate a justification either showing service improvement or saving cost. On a positive note, efficiency gains projected by local authorities are, in the main, being achieved, according to data from the Department for Communities and Local Government. However, actual gains for 2006/7 were falling far short of original forecasts in the Autumn of last year – the last set of data published by DCLG.

The twin CRM goals of greater effectiveness and improved efficiency are certainly thrown into higher relief with every year that passes in the public sector. Councils are obliged to fulfil more and more duties, with no substantial extra resources. Emerging legislation, such as the Freedom of Information Act, the Childrens Act, the Domestic Violence Act, and various others, is imposing duties on local authorities not just to handle more within their own organisation, but also to ensure that they are joined-up with other agencies and stakeholders, such as the Police and the NHS, to manage service delivery needs more effectively.

In taking CRM techniques and technology from the private sector, the public services have recognised key similarities, but also major differences. It is worth rehearsing these.

CRM practitioners talk about building the ‘single customer view’ in order to be ‘customer-centric’. This has a direct translation into the local government context. Understanding service delivery and need on a person by person basis allows patterns of service consumption to be far better understood. Clusters of multi-service users can be identified, opening up opportunities to make service delivery more efficient. From the other perspective, unexpected pockets on service non-usage can also be spotted, so that resources can be better directed to encourage take-up. After all, this kind of best practice can attract supplementary funding – so there is a real reward for getting it right.

Perhaps the greatest gulf between private and public sector CRM practice opens up in activities such as segmentation. For a start, where commercial organisations can choose to simply ignore a section of populace if they wish, the public sector is duty bound to offer its services to everyone, and encourage their uptake. This leads to what has been labelled segmentation inversion. In other words, the private sector concentrates on the customers who buy most and deliver most profit. Public sector organisation focuses on the section of society that is most needy, and therefore least wealthy.

No-one can be ignored, all must be included. This has a profound implication for the efficiency of communications channels employed. While we want to encourage the greatest possible engagement with citizens over the internet, figures from the Office of National Statistics make it clear that two fifths of UK households do not have an internet connection. Those households divide into those who simply do not want the internet in their homes (a minority) and those who cannot afford it (a majority). The consequence is a need to offer channels that have universal reach and/or affordability, or which can be offered free at the point of communication – and that has tended to mean post and phone. Some leading councils are now waking up to the fact that outbound communications can be consolidated (one envelope with several departments’ communications in it) to save literally millions on print, production and postage.

Interestingly, during the great eGovernment push between 2002 and 2005, some the greatest benefits and efficiencies were experienced not through citizens self-serving over the web, but rather in the efficiency and effectiveness of local authority contact centres. By having a single customer view, which joined-up all the information and records on the citizen calling in, queries could be answered faster and resolved more effectively. It has been reported that one council put its call answering rates up from 50% to 95%, as well as producing a similar hike in customer satisfaction, through the implementation of a single customer view in the call centre.

Centralisation of query handling, along with automated information retrieval on the caller has certainly improved service quality, along with the important side benefit of being able to spot fraud more easily. The last available report into the subjects reported annual losses of around £600m from housing benefit fraud, so any method of identifying and preventing such losses is highly desirable.

Another key difference between public and private sector CRM is the greater need for individual accuracy in the public services. Commercial marketers can get away with making a few errors with customers. In fact, the whole prospecting routine is predicated largely on a customer’s likely tastes and preferences rather than actual, known fact about them. The accuracy of individual details in the public services is, by contrast, paramount. Imagine the repercussions of refusing key support services to the genuinely needy, or over-charging citizens, or getting a child’s educational eligibility wrong, or offering benefits to the wrong people. CRM practitioners in the public sector have to build into their strategies the ever present truth that if things go wrong through inaccuracy or poor practice, the effects will be not just administrative and managerial, but could also fuel political change.

Finally, customer satisfaction with public services – or rather customer dissatisfaction – tends to end up in punishment at the ballot box. Yet how rigorously are satisfaction levels monitored and measured? Especially at the local government level, it is in the citizen’s interest to vote for the party, and indeed the individual councillors, who have delivered service quality and improvement, rather than merely swaying to and fro on a dogmatically political agenda with no connection to actual delivery of policies. Two commercial CRM techniques are starting to be used here: firstly, satisfaction levels are being gathered either face-to-face or on the phone, as services are consumed or queries answered; secondly, mystery shopping is being introduced by some councils to independently test service quality, whether delivered by in-house or outsourced staff.

There are a variety of quality and efficiency gains that local authorities are experiencing by adopting a customer-centric CRM strategies, services and systems, with much of that gain being focused on centralising operations in a contact centre, whether in-house or outsourced. Quality gains are mainly from calls being answered (at all!), the citizen’s profile being recognised by a system drawing on multiple legacy data sources, and then the agent also being able to get to the right information quickly, with which to answer or refer the query. Getting the right information to the right person quickly and accurately, still has vast room for improvement in local authorities, despite the advances already achieved. Local government is required to deliver some £6.45 billion by 2007/8. That’s a tall order, but one where better management of inbound and outbound communications is playing a major role.