CRM and the rise of the public service customer

The idea that public service providers should seek to treat the users of their services more like the customers of private services has become increasingly central to public service reform in the UK over the last three decades. Over that period the idea has figured in a number of ways, for example as counter-balance to the threat of ‘producer capture’ or, more positively, as a way of making public services more responsive and flexible. The advocacy of a new customer focus in public services was one thing; how this would be brought about was another matter. A wide range of approaches to the ‘consumerization’ of public services have been advanced (see e.g., Hood, Peters and Wollman, Reference Hood, Peters and Wollman1996), seeking to create, or more usually mimic, the kinds of pressures and informational signals believed to characterise competitive markets. As British public service reform has looked increasingly towards new technologies as the key to enabling service improvement, it has more and more sought to borrow technologies and techniques from the private sector – in this context, specifically Customer Relationship Management (CRM).

CRM refers to a collection of techniques and technologies that help organisations manage their interaction with their customers by providing the organisation with a better knowledge and understanding of customer ‘needs’ and by providing the customer with a consistent interface to the organisation. At the heart of CRM, then, is the careful gathering and recording of information about customers, individually and collectively. This information can be used in three main ways: operationally, to support front office interaction with the customer; analytically, to segment and classify customers and to model and predict future customer behaviour; and ‘collaboratively’ to provide self-service capabilities. Thus, it is suggested, the organisation can provide a consistent and responsive face to the customer regardless of where or by which channel (e.g., face-to-face, telephone or internet) the customer chooses to present him/herself.

Figure 1 adapted from a publication of the Office of the Deputy Prime Minister (ODPM – then the department responsible for local government) illustrates an idealised picture of the basic components of CRM as it is being deployed within local government.

Figure 1. Components of CRM.

Source: Adapted from ODPM, 2004: 3.

In a local government setting, the ‘customer’ of CRM can refer to a range of actors, such as local businesses or voluntary organisations. It more commonly refers to an individual service user and it is this type of ‘customer’ that forms the focus of this paper.

The promise of CRM – the prospect of generating organisational efficiencies and of better managing customer interaction – has been seen as highly attractive in public sector settings. CRM promises not only raw efficiency but also a consistent interface to the customer, across their various interactions with the organisation. In the local authority setting, where individuals may be expected to have multiple interactions with different departments (e.g., benefits, housing, social services, education, planning, etc.) and via different channels and media (e.g., post, face-to-face, telephone, internet), this promise of consistency offers local authorities a route towards the goal of joined-up government and what is usually described as a ‘seamless’ service to the customer.

Perhaps the most significant aspect of CRM to this discussion is that it is an approach that places considerable value on ascertaining and responding to the needs and desires of an organisation's individual customers (though, of course, in commercial settings these efforts vary according to the relative value of the customer). The more an organisation knows about a customer, the better placed it is to assess the profitability/service requirements of that individual and thereby seek to satisfy his/her needs. It is via processes of knowledge generation and segmentation that CRM technologies facilitate the ultimate objective of delivering personalised services through developing ‘perfect’ knowledge of individual customers. A report for the main ODPM sponsored project to promote CRM in local government describes the process thus: ‘Players can be segmented into sub-groups and each sub-group can be given their own bespoke service. Segmentation can be done for smaller and smaller sub-groups until we reach a segment that contains one person – this is called personalisation’ (Shaw, et al. Reference Shaw, Kawalek, Batista and Cottam2003: 7).

The critique of customer focus in public service

Who is the customer envisaged within Customer Relationship Management? The most significant characteristics can be fairly quickly enumerated (on the ‘archaeology’ of the notion of customer see du Gay, Reference du Gay2000; Clarke, Reference Clarke2004). The customer is envisaged as a rational, self-knowing, self-interested individual who is demanding of attention and seeking to economise both their money and, particularly important in the public service context, their time and effort. Thus, although the phrase ‘the customer is king’ (or queen; see Le Grand, Reference Le Grand2003) may be rhetoric, the demanding, harassed and needy character envisaged in CRM more closely resembles a small child – or, in some respects, Le Grand's knave. The counterpart to this identity is to present the service provider as a kind of benign parent who is expected to respond promptly to the demands of their offspring, even anticipating needs and desires, and being prepared to satisfy them.

The development of CRM in the private sector was much influenced by the concept of ‘customer loyalty’ and the associated idea that loyal customers were automatically more profitable. The objective of much commercial CRM activity has been to foster customer loyalty and discourage customer ‘exit’ (what is often known as customer retention). While this simple correlation of loyalty with profitability may have turned out to be illusory (see e.g., Werner and Kumar, Reference Werner and Kumar2002), the notion that CRM technologies can help to identify and target profitable customers remains. Translated into a public service context, however, this has become a concern that CRM tools and techniques will enable service providers to identify and concentrate on those users who are most ‘profitable’ in the sense of helping to meet the requirements of their performance management regime at minimum cost and effort (see e.g., Fountain, Reference Fountain2001). In this context, CRM can be seen as contributing to a wider process of social sorting that disadvantages the most hard-to-reach and difficult-to-serve users of public and private services (Lyon, Reference Lyon2003).

A second set of criticisms focuses on the individuating impact of CRM type technologies. Many public services are ‘public’ because they provide both an individual and a wider public benefit (see, e.g., Haque, Reference Haque2001; Alford, Reference Alford2002) – that is, they have positive externalities. In a purely market economy, the argument goes, these services would typically be underprovided. Health and education services are provided directly to individuals (and those individuals are understood to benefit from those services), but they are also public goods – services with benefits to a wider public in the form of public health and educational goals such as public literacy and numeracy. Even if we are not ourselves direct beneficiaries of education and health services, or if we choose to exit from public provision of these goods, we remain indirect beneficiaries of such provision (e.g., through the control of infectious diseases and the public economic and social benefits of education). In this sense, as Hirschman noted long ago, we cannot really ‘exit’ from this aspect of public services (Reference Hirschman1970: 100).

Thus public services have both a direct, individuated customer – arguably well catered for within the CRM paradigm – and a second ‘social’ customer – ignored in the CRM paradigm. Thus, the re-focusing of a local authority's efforts around a CRM logic carries with it the risk of a further deterioration in what Haque (Reference Haque2001) has called the ‘publicness’ of public services. If a public service agency is committed to a process of personalisation in service delivery, to what extent is it inhibited in recognising or acting in the wider collective interest? If one accepts that for each interaction between an agent of the state and a user, that the user is not the only ‘customer’ to be considered, then these issues call for closer critical examination. In this sense, neither Le Grand's ‘pawn’ nor ‘queen’ is very helpful. However, whereas the docile pawn does little to evoke an active citizen figure, it does at least convey a sense of collective membership; by definition, each society can only have one queen.

The recent Treasury sponsored report on the transformation of public services, written by Sir David Varney (Varney, Reference Varney2006; see also the commentary in Cornford and Richter, Reference Cornford and Richter2007) has established a more limited critique of the customer identity, contrasting it with a fuller ‘citizen’ identity. For Varney, the danger is that each of the different state agencies comes to define ‘their customer’ in its own terms. Customer Relationship Management, implemented on an agency-by-agency basis, then, can ensure the consistent or joined-up customer relationship within each agency individually, but a fragmented relationship with public services as a whole. For Varney, then, the ‘customer’ is a function of a specific agency's view of its user, which he contrasts with the notion of the ‘citizen’, a more inclusive identity that encompasses all of an individual's interactions with public services.

It might appear to be absurd to argue against the principle of treating citizens as individuals ‘with distinct wants and needs’ or to suggest that agents of public service delivery should not be interested in ascertaining and responding to the distinct needs of those citizens. These formulations, however, envisage such ‘wants and needs’ as exogenous to the system that might satisfy them. The task, then, of customer service and its associated technologies is to empirically ascertain these want and needs as a prelude to more or less fully satisfying them. ‘Improvements in customer service from CRM can range from a more rapid and focused response to enquiries through to proactive contacts with customers to anticipate and manage potential issues’ (ODPM 2004: 3). However, if we see such want and needs as, at least partly, endogenous to the system, then the model of customer satisfaction may make less sense. There is, after all a fine line between anticipating ‘demand’ or ‘needs’ and creating them. Customer satisfaction can thus become a ‘performative’ matter.

Finally, while CRM systems are designed to focus organisations on their customers, that focus is highly selective and determined by those within the organisation. While CRM does provide a role for the voices of users, it can only effectively ‘hear’ those elements it can anticipate and for which it is therefore listening (Cornford and Richter, Reference Cornford and Richter2007). The adoption of the public service customer model, and of CRM specifically, has not gone un-criticised on this count. For example, Stephen King has noticed a ‘tension’ between ‘the provider-centric CRM technology and the growing awareness that the citizen has a right to be heard in service design and delivery.’ (2007: 58)

CRM in practice

To explore these questions empirically we draw on field work undertaken by one of the authors in and around the Customer Services department of a unitary local authority in the North of England – which we will call Big City. Field work in Big City involved over 25 interviews with council managers, council workers and technology providers. These interviews were supplemented with direct observation of customer service work. Fieldwork covered a period of some two years from 2003 to 2005.

Big City council's customer relationship strategy has a number of elements. First, the council established a new division – Customer Services – charged with acting as the council's ‘front door’. Noticeably, recruitment to the Customer Services division included existing council staff, but also a substantial number of managers and workers with experience in private sector service work in call and contact centres. Customer Services quickly established a central Customer Service Centre, which supported face-to-face, telephone and internet (email and web) mediated communication. This central unit was slowly augmented with neighbourhood customer service centres. The work of the customer services personnel in all these Centres was supported by the procurement of a commercial CRM computer system, designed and built by a small IT supplier attempting to establish a niche market in local government. Customer Services, as the council's new front office, now regularly handles over 90 per cent of user interactions.

Interactions are guided by ‘scripts’ coded into the CRM system, which are used, often quite loosely, by Customer Service workers to structure interaction with customers. When the CRM system was first installed the scripts were mainly reactive to customer requests. However, as Big City Council's Customer Service Manager, explained, frontline staff based in the council's service centres were being encouraged to do more than merely respond to customers' enquiries and to anticipate the different ways in which customers may need or desire to interact with the council in the future. For example the idea of ‘life events’ (such as moving house, having a birth or death in the family, or having a child start school) was used to set up a bundle of services, from different departments, that a customer might require, thus anticipating customer needs.

The deployment of CRM's scripting technologies in frontline units at Big City, staffed by generically skilled officers, has undoubtedly streamlined customer contact and facilitated more consistent interaction. The potential of such scripts varies, however, depending on the nature of the interaction. While scripts may usefully support a generic officer in dealing with a council tax enquiry, the same cannot be said of an enquiry from a mother concerned about the suspected abuse of her child. In this sense the types of ‘relationship’ that CRM can help to ‘manage’ are limited.

Our interest is the changing character of the service user. Using Le Grand's nomenclature – knight, knave, pawn or queen – current trends re-position the local authority service user, as well as the service provider, as knave – clothed in the language of the ‘customer’. And a particularly visible manifestation of the knave-directed strategy that serves to consolidate this relationship is the establishment of the kind of customer-facing ‘front-end’ we have described in the case of Big City.

Of course, the customers of Big City have little choice but to interact with Big City Service (the part of the council that operates Customer Services). However, contractual customer satisfaction targets and financial incentives serve to harness the self-interest of those working in that part of the council to provide elements of choice (e.g., concerning time and place and means of access). These targets and incentives are strongly predicated on the notion that customers, in their own self-interest, are seeking ‘satisfaction’ of a particular type.

This approach is clearly designed with the needy, knavish customer in mind.

Central government, too, has been clear about how it perceives the users of public services. According to an ODPM Minister, ‘people expect public services to improve and go on improving. They also expect the services to suit their lifestyles – to be delivered how they want them and when they want them’ (ODPM Minister cited publictechnology.net; accessed 18 July 2005). More specifically, the results of a MORI study cited in a recent Cabinet Office document stated that the five key drivers of customer satisfaction with public services were: delivery, timeliness, information, professionalism and staff attitude (2004; see also Herdan, Reference Herdan2006).

Interviews with managers and workers in Big City suggest that these drivers – and the model of the user which they imply – have been thoroughly internalised. This Benefits Officer, for example, was typical in assuming that the council's customers are increasingly demanding:

Users are not only envisaged as demanding but also as rationally calculating, concerned that they are receiving value for money. By way of example, this is how two respondents replied to the question – ‘What do your customers want from the council?’

In this case at least, one is left in no doubt that the local government customer is widely assumed to be a knave, and a particularly demanding knave at that. Beyond this, our findings suggest that this customer is assumed to be no different than the customer of any commercial service – both demand excellence in customer service in their pursuit of self-interest.

Most interviewees appeared unable to engage with and respond to the suggestion that ‘customer-focus’ tends to individualise, or personalise, the service encounter and in doing so to marginalise notions of the wider public good. Where there were challenges to a customer identity, these were couched in terms of ‘professional’ categories such as client or service user, identities which often stressed the specific problems and vulnerabilities of the individual rather than any more ‘public identity’. Those who advanced such alternatives did not seek to challenge the customer identity so much as to constrain its domain of operation, to keep it in its ‘right place’. Even the company that supplied the CRM computer system, a company whose website contained a long discussion of the uniqueness of the public service context, were dismissive of the idea that a more ‘public’ citizen identity could be anything more than special pleading by the public sector.

In the wider council the ‘citizen’ is not entirely invisible. The council's democratic services unit, for example, has published a list of citizens' rights. The citizen also features as one of the targets of Big City's community engagement strategy alongside ‘customers’ and ‘communities’. Indeed, one of the council's ambitions is to ‘put the citizen at the heart of decision-making’. At the same time, however, it seems that this character is viewed as largely interchangeable with the ubiquitous ‘customer’ – ‘This community engagement strategy recognises . . . the need to provide appropriate opportunities for customers and communities to participate at whatever level they wish to influence service delivery, decision making and policy development.’ That the citizen is a somewhat nebulous character, indistinct from the customer, is reinforced by a recent council document setting out Big City's position on disability equality. One of the council's key values in this regard is to ‘put the customer and citizen at the heart of everything we do, delivering services in a caring and sensitive manner’.

Discussion and conclusion

For us, the dominant feature of our empirical work in and around customer services has been the unquestioning acceptance by many of those within the council that their service user can be, and should be, viewed as a customer. While a number of rival identities were articulated by those outside the Customer Service Division, these were either generic terms – service user or client – or older functional terms such as ‘tenant’ or ‘scholar’. Even where a customer identity was challenged, it was accepted as setting the terms of the debate. No one freely used the term citizen. When the term citizen was suggested, it was rejected.

How can we explain this acceptance of the customer identity in local government and the failure of the citizen-based vision to take hold? And does it matter?

What is clear is that the success of the customer service model is grounded in its ability to mobilise a complex ideological and material set of resources, structured as a coherent ‘order’. Within Customer Services, the word is ever-present, inscribed on buildings, leaflets and individual uniforms. More importantly, the CRM-based computer system and its associated techniques provide a ‘shrink-wrapped’ ‘solution’ that can be procured and ‘implemented’. By contrast, the notion of the citizen is seldom articulated by the council in its interaction with service users (although it is used in some fields, such as registrations and ‘democratic services’); there is no specific department or division or body of expertise associated with the term within the council. While the ‘customer’ is regularly reminded that he is time-pressured, value-for-money oriented, information-hungry individual, a coherent narrative incorporating the potential traits of a ‘citizen’ is largely absent. And, crucially for us, there is no supporting computer system providing structured and monitored workflows to provide a material manifestation of the idea of the citizen.

Does this matter? The answer to that question depends on how we think about the effects of techniques such as CRM. We can see CRM as responding to some aspects of the service user and ignoring others, but otherwise having little long-term effect on the user. By contrast, we might see CRM as more potent, not just responding to (aspects of) service users but coming to shape them (and their service providing interlocutor), subtly moulding their characters and leading them to become customers (for an elaboration of this idea with respect to private sector CRM, see Zwick and Dholakia, Reference Zwick and Dholakia2004). To return to Julian Le Grand's schema with which we began, ‘the introduction of a knave-directed strategy may make the knights behave more knavishly’ (1997: 162).

We accept this second view – that approaching and dealing with service users as if they are customers will shape their subjectivity in ways that will encourage them to act and behave as customers. If we do not wish to live an increasingly knavish society, then it is imperative that we develop a programme of building computer systems and other material interventions that can support alternative, more publicly oriented, citizen-like, perhaps even Knightly, identities – what we might call a Citizen Relationship Management system.