Connecting state and local government leaders
While many states have low customer satisfaction, some are bucking that trend by investing in technology to improve processes, according to research from McKinsey.
State governments that invest more in technology and digitize their services build higher customer satisfaction among their residents, according to a recent report.
Residents prefer by a two-to-one margin to access government services through digital channels like websites and apps rather than by phone or in-person, according to a McKinsey & Company survey of 80,000 respondents across all 50 states and the District of Columbia. The states that performed best in customer satisfaction also spent approximately twice as much per capita on technology as states that performed the worst, according to the report.
While McKinsey surveyed satisfaction across a wide swath of state services, it found that five were generally the most important to residents and drove more than half of residents’ experiences: motor vehicle services, taxes, public transit, affordable housing and unemployment insurance.
The report also noted that other offerings, like Colorado’s myColorado app, where users can renew various licenses online and access other services, perform well with the public.
Improving customer service through digitization has a “halo effect,” said Ashka Dave, an associate partner in McKinsey’s digital practice and a report co-author, and improvements in customer service help governments make their states more highly regarded.
“Improving customer experience has meaningful and measurable impact on increasing trust, increasing civic engagement, decreasing your cost to serve, and actually improving the appeal of your state overall in terms of things like affordability and quality of life—which some could argue isn't even something that governments touch,” Dave said.
The report also found that although most residents prefer to use digital channels like websites and apps to interact with their state government, there is still a need for in-person and phone-based services to ensure equitable access. And while some states are moving toward online portals that centralize services, a one-stop shop is not the only answer to digitization given those equity concerns, although centralization helps address customers’ pain points.
Investing in easy-to-use websites and interfaces is a crucial way states can improve customer experience. Dave said states’ efforts should mirror those of e-commerce companies, which communicate with customers at every step of the purchasing process. Plenty of communication helps assure residents that their requests are being taken seriously and are progressing through the government apparatus. Governments must also avoid what she described as a “break point” where, if two weeks after filing a request there has been no apparent progress, customers start to get frustrated and become less satisfied.
“The truth is, your residents perceive [customer experience with state government] against what it takes to order something off of Amazon or order a pizza from Domino's,” Dave said. “Our lived experiences are setting our expectations in very different spots. So even while governments are doing well—and they're doing better—expectations are also simultaneously increasing.”
Government leaders looking to boost their state’s customer experience and embrace digitization should not regard customer experience as a separate initiative, but instead bake it into their other initiatives, Dave said, so it really “resonates with your residents.”
State governments have the opportunity to further digitize services thanks to a raft of federal money coming from the likes of the American Rescue Plan and the Bipartisan Infrastructure Law. Dave said the influx of federal funds is a “really important moment in time” for states to invest in technology, but they should ensure investments do not digitize bad or inefficient processes.