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It’s about time! A more customer-focused government

Date:09 October 2017
Dr Marijke C. Leliveld is assistant professor at the University of Groningen Faculty of Economics and Business
Dr Marijke C. Leliveld is assistant professor at the University of Groningen Faculty of Economics and Business

Government service is often perceived as subpar. People can associate it with long lines, poor service, and unreliability when keeping to deadlines. But in recent years, governments have started to take interest in the idea of treating citizens like customers.

Our research suggests that one idea from industry practice that could be successfully introduced into public services is the notion of service recovery.

Service recovery has long been a practice in the hotel and restaurant industry. It essentially means compensating the customer for a “loss.” This loss can be perceived, economic or social. An example might be a restaurant that deducts drinks from the bill if a table of customers found a hair in their food, or a train company that refunds tickets if there is a serious delay.

In our research, we focused on “minimal loss” situations because these are the most typical and damaging to a government agency’s reputation. Minimal loss is typically a mishap or failure that is not harmful, but perhaps annoying. The underlying belief of service recovery is that while losses to a customer are inevitable, if you compensate your customer fairly, he or she will likely return.

Applying this principle of financial compensation to citizens in their interactions with the state has some ethical and legal obstacles. For one, some governments might have laws against this type of compensation. And ethically, it seems to go against the idea of government. Governments are thought of agencies that perform work on behalf of citizens for the common good, not that of an individual.

And yet, these obstacles seem to erode when fees are paid for government services. In the case of background checks, duplicate copies of birth certificates, building permits, and so on, citizens pay a fee. What happens when the government does not keeps its delivery time promise? Does receiving compensation lessen the blow of such inconveniences?

My PhD candidate, Jean Pierre Thomassen, tested this question along with colleagues Steven Van de Walle, Kees Ahaus and myself, and published a paper on the topic in the journal Public Administration. Using the principles of experimental research design, we found similar results as in the private sector: customers feel better when they are rewarded for a service loss.

We also discovered that promising compensation in the case of a loss is riskier than not promising, and not compensating at all. If a government agency cannot keep its promise to compensate, the customer has been “wronged” twice; once by the loss and again by not receiving the advertised compensation.

Our ambition for our research is that it can help governments to improve their reputations by becoming more reliable in meeting their deadlines.

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