I spend a lot of time talking about the poor quality of federal customer experience (CX) and the effects it has on the public. I’ve already talked about how federal agencies averaged the lowest score in Forrester’s Customer Experience Index (CX Index™). In fact, most of the worst performers in any industry were federal agencies and even the top agencies — the US Postal Service and National Park Service, which tied for the top spot — achieved scores far below private-sector leaders like USAA, Amazon, and JetBlue.
However, today I want to emphasize the national harm of bad private-sector CX. US consumers have hundreds of millions of frustrating interactions with companies every day, and that adds up to:
- Degraded quality of life. About 50% of US households reported bad experiences, and 68% suffered customer rage in 2013, according to this study.
- A weakened economy. Waiting for in-home services such as cable, TV, or appliance installation and repairs takes each US consumer out of the workforce for two days each year, costing $250 per person and the entire economy as much as $37.7 billion annually, according to another study.
- Stymied business innovation. Poor CX also saps budgets that companies could otherwise use for research and development, capital investments, or other imperatives. And CX improvements translate into big bucks. Sprint saved $1.7 billion per year by avoiding problems that had prompted high traffic to its call centers.
So why talk about the costs of poor private-sector CX to a government audience? Because government can help! By creating CX-preferred purchasing programs, federal, state, and local governments can use their $1.5 trillion in purchasing power to fuel markets for better CX. Governments already do this for certain types of products, businesses, and corporate behaviors. One of the best-known examples is the federal Environmentally Preferred Purchasing (EPP) program, under which agencies buy green to "stimulate market demand for green products and services." The effects of a CX-preferred procurement program would include:
- Better CX for the people. As companies improve their CX performance to meet government purchasing standards, all customers will benefit. For example, the General Services Administration prompted automakers to start selling airbag-equipped cars when it asked to buy 5,000 of them in 1985, stimulating the widespread adoption of this life-saving feature. At the local level, the private sector has been much faster to adopt the Leadership in Energy and Environmental Design (LEED) building standard in cities where the local government has implemented LEED procurement policies.
- And better CX for governments, too. Government employees have enjoyed the positive effects of green procurement, like when Yellowstone National Park employees showed fewer health problems after the park switched to ecofriendly cleaning products. Better workplace experiences like these will improve federal employees' lagging engagement, making it that much easier for government workers to provide better experiences to the government's own customers.
- More CX innovation. If governments expand the market for top-notch CX, companies will respond by innovating. Examples of this phenomenon abound. A 1993 mandate that federal agencies purchase Energy Star computer equipment transformed the market for efficient Energy Star products. Because US federal agencies were the largest buyers of computers in the world, Energy Star equipment dominated the computer market within a decade.
Even better, CX-preferred purchasing is a comparatively easy win because the case for it is simple. In addition to being effective, CX-preferred purchasing would also be:
- Painless. CX metrics make it easy to choose which companies offer the best CX. Ubiquitous, authoritative CX rankings like Forrester's CX Index, the American Customer Satisfaction Index, and Net Promoter Score make it easy to compare companies. Contrast this with green procurement, for which standards and measures often had to be built nearly from scratch.
- Economical. Whereas the higher price of green products continues to be a problem for many government procurement offices, better CX isn't necessarily more expensive.
- Popular. CX-preferred purchasing would be good for people and the economy, so it is sure to be popular. Agencies that establish CX-preferred purchasing programs would garner positive public attention, just like they do with green procurement. It worked for the US Army, when it received positive coverage of its plan to procure $7 billion in renewable energy.
For more information on how governments can help drive CX improvement in the private sector, please check out my complete research report: "How Governments Can Improve Everyone's Customer Experience."