Satisfaction with states’ service delivery has jumped dramatically, report finds

State agencies have dramatically improved their customer experience and service delivery over the last four years, according to a McKinsey & Company report shared exclusively first with Route Fifty.

Researchers found that average satisfaction scores across all 50 states have improved, with some seeing jumps of 20 to 30 percentage points in overall satisfaction since 2022, when McKinsey last did this survey. The public sector has also closed much of the customer satisfaction gap with the private sector, McKinsey found. That satisfaction gap was at 11 percentage points in 2022 and is now at 3 percentage points.

Those behind the report said states’ renewed focus on service delivery and modernizing their systems during and in the immediate aftermath of the COVID-19 pandemic is starting to pay off and generate real results.

“In 2022, [states] started to make major investments to reach their residents in new and creative ways,” said Ashka Dave, a partner in McKinsey’s technology and artificial intelligence practice and a report co-author. “This was that post-pandemic wrinkle, that post-pandemic catalyst. They were taking big swings, and now four years later, we've seen the wrinkles of those big swings iron out, and they're actually getting kind of that return on resident experience that they were aspiring to.”

Dave said the other aspect that has made a difference is that states increasingly have a strategy around customer experience, and do so at the statewide level. There is evidence across the nation that state leaders see service delivery as something that needs to be improved, and they are using technology and artificial intelligence to help them do so. Those efforts are bearing fruit, Dave said.

“For all of the states that had a big [satisfaction] increase across the board, they improved in every single service,” she said. “It was like no service was left behind. You can really only do that if you aren't just piloting agency by agency and keeping those innovations siloed agency by agency, and that you're looking at it for all of government.”

Despite the progress that’s been made, McKinsey found dramatic differences in residents’ experiences with different agencies — some scoring highly while others lag — with those differences very pronounced across different states. For example, satisfaction with retirement benefits varies from 34% to 71% across different states, McKinsey found, while satisfaction with small-business financial assistance ranges from 29% to 69%.

That variation shows just how much work still lies ahead, and how different agencies were starting at such different places, Dave said. But she noted that the level of investment an agency received correlates to the improvement in customer satisfaction over the past four years. That comes from agency leaders first saying they want to improve their customer experience, and then drilling down into what makes an experience a poor one. Targeted investment to improve those experiences must follow, the research found.

More work lies ahead, and McKinsey called on states to make sure they have a statewide customer experience agenda, use AI to build on the progress they have already made and design their services around resident journeys so they know the steps residents take to achieve a specific outcome and try and reduce the number of steps they must take.

Dave said states that have the highest satisfaction rates do really well on the services that matter most to their residents, so it is incumbent on state leaders to identify what’s most important and start there.

Cleaning up their websites can also go a long way, she said, to making customer experience more seamless. Reducing the number of clicks someone needs to make to carry out a task or engage with a service can make that feel much less stressful. 

“If you improve customer or resident experience, it is a lower cost to serve, without a doubt,” Dave said. “You increase trust, so you're able to actually get the residents to move in directions that you need them to during catalytic moments. And it's correlated with improved employee experience, so you're able to retain and hire in ways that you weren't able to. There's all these stacked returns that happen when you improve customer experience.”

Dave cautioned that state agencies will never reach 100% customer satisfaction, as the “bar is always rising” on what constitutes good customer experience. But she said the progress that has already been made shows what can be done when state leaders set their minds to a challenge like improving customer experience.

“The fact that every single one of the states kept up with a rising bar starts to, most importantly, highlight for me that progress is possible, especially in a four-year time span where budgets were cut, trust was eroded, there's a lot of beat-down on the public sector workforce,” Dave said. “Despite that, we saw an ability to move with that rising bar.”