Councils should be seizing the opportunity for significant and permanent future savings by reorganising the way they manage customer contact, says a new report from Socitm Insight.

All front office customer contact, whether face to face, by phone, through the website or other means, should be brought under central management, to enable customer contact to be run to common standards, with customer contact analysis leading to improvement and savings in the cost of delivery. The result will be better service for the customer and better value for the taxpayer.

Better served: customer access, efficiency and channel shift, published on 15 February, says that traditionally, planning, social services and other local authority departments have managed their own customers. Despite recent moves to reap efficiencies by splitting front and back office management, tradition persists, and in many councils there is no corporate role or responsibility for customers defined. Where a professional customer services activity exists, it very often covers only part of the council’s interaction with the public.

The report points out that comprehensive enquiry and service data across all services and channels is needed in order to manage customer enquiries efficiently, identify scope for improvement, and track progress. Councils cannot start on an effective programme of ‘channel shift’ until data is collected and is available for analysis. Socitm has found few councils currently able to produce comprehensive customer enquiry data.

Where data does exist, Better served highlights the fact that there is significant variation in volumes of contacts received by similar types of council and the cost of servicing them. In one cohort from Socitm’s Channel Value Benchmarking service, while one unitary council was getting 0.24 face-to-face contacts per head of population, another unitary council was getting 1.76 contacts per head.

In cost terms, using an average cost-per-face-to-face contact figure of £7.40, derived from Channel Value Benchmarking, the difference in spending, just on face-to-face contact is between £1.80 per head and £13 per head of population. The second council receives 445,488 face to face visits a year, and if it were able to reduce this volume by, say 50% (where it would still be handling twice the number of visits per head compared with the first council) it would be able to save £1.6m a year, just on this aspect of customer handling alone.

The Better served report explains that cost reduction from active customer management arises from three main sources:

  • Greater efficiency in handling contacts, where a greater proportion of contacts are resolved quickly, and at the initial contact by introducing professional customer service approaches and common standards
  • Reduction in ‘avoidable contacts’ (ie situations where the customer has to contact the council unnecessarily in connection with an enquiry, perhaps because no information was available, or it was of poor quality, or a service was not delivered as expected)
  • Shifting of enquiries from relatively high cost-to-serve channels (phone, mail and face-to-face) to a lower cost-to-serve channel (usually, but not always, the web).

All three measures will enable reduction in the volumes of phone and face to face contacts which will enable headcount reductions and therefore cost savings. Volumes of web enquiries will rise (providing the website is up to the job) but the marginal cost of servicing these additional enquiries is almost zero.

While the report says that few councils have grasped these nettles yet, it illustrates what is possible with reference to four case studies from councils that have adopted comprensive approaches to customer management:

Birmingham City Council anticipates £197.4m of cashable benefits over 10 years from its ‘Customer First’ programme, which is part of a wider programme of council-wide transformation

Tameside MBC aims to save £1m over the next four years from better management of the front office

Surrey CC has reduced cost of phone and web contacts from 79p to 49p per enquiry since 2007 and saved £175,000 in its contact centre plus £150,000 elsewhere by reducing avoidable contact

Rhondda Cynon Taf CBC which started by improving its website before making moves to create channel shift

Finally, the report emphasises that it is no good setting out to reduce avoidable contact or effect a major shift to self-service if the council website is less than excellent. If a customer cannot do what they set out to do on the website, they will lose confidence and revert to traditional channels. Data from Socitm’s Website take-up service shows that between 8% and 35% of web enquiries to council websites currently fail, while Better connected Socitm’s annual survey of council website ‘usefulness and usability’ due out on March 1, is expected to a continuation of the stagnation reported in the 2010 edition of the report.

‘This report gives real insight in how frontline delivery can be reshaped to protect service quality and reduce cost’ says Jos Creese, President of Socitm. ‘What is recommended is not without risk, but the pace and depth of public sector cuts and reform requires a radical rethink about how we design and deliver services.’

For further information, go to www.socitm.net

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