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Do Government “Customers” Have a Choice?
In many ways I believe the essence of strategy lies in the choice of a singular value proposition, or determining how you will balance your resources across the spectrum of choices. What is a value proposition? It’s the determination made by any organization of how they propose to create or add value for their customers. It helps answer the question: “Why would people buy from or work with us?” Traditionally, three choices have been available: Low Cost (through operational excellence), Product Leadership (supplying the best product or service through innovation and technological superiority), and Customer Intimacy (best value derived from outstanding service and relationship building).
Most for profit companies immediately grasp the relevance and importance of making this choice, accustomed as they are to waging strategy wars with their competitors. However, with public sector agencies the notion is often rejected on these seemingly show-stopping grounds: “But our ‘customers’ have no choice, they have to deal with us.” But is that really the case? Do we as customers of government agencies have no choice? I’d suggest it’s not the case, and argue that all customers of government agencies do have a choice.
Recently I worked with a Compliance and Enforcement group within a State government agency. When the question of value propositions was raised the “no choice” flag was quickly raised and the conversation seemingly halted. But one person in the group protested and suggested customers do have a choice; in their case the choice was whether or not to comply with regulations. He argued that in the end customers may decide not to comply with state regulations because the experience or cost of dealing with the authority simply outweighs the burden of any possible penalty. Based on disappointing encounters in the past, customers may consider the state’s products to be outdated or inefficient, and declare the hassle factor is too high to warrant compliance. The lack of a compelling value proposition translates into substantially less revenue for already depleted State coffers.
This veteran of public service went on to suggest that if government agencies were willing to explore the value proposition idea and choose one, or a balance, that fit their environment, they could transform the customer conversation. Declaring a value proposition means critically examining everything you’re doing through that lens and ensuring all products and processes are consistent with your chosen direction. With products, experiences, and costs transformed, customers will choose to do business with the authority because the benefits now outweigh the costs. If you’re in the public service, I urge you to take a cue from this intrepid colleague, begin assessing your value proposition today, and remember that all customers do have a choice.