Serving constituents, saving dollars; the cost-reduction potential of constituent relationship management.

• Author: Kavanagh, Shayne C.
• Position: Cover story

Constituent relationship management (CRM) combines advanced telephony, Internet, and computer technology with constituent-focused business processes and an ethos of service to the community. Coordination between these elements in a government organization makes possible drastic improvements to constituent service. Consider the following examples:

* As a result of CRM-led process improvement efforts, the City of Chicago, Illinois, was able to reduce the time between a report of a pavement cave-in is first reported by a constituent to when it is repaired by the city by almost 80 percent and by almost 20 percent for sewer cave-ins.

* The City of Albuquerque, New Mexico, strives for an 80 percent phone call pick-up rate within 30 seconds. For a 12-month period (August 2005-July 2006), the city reports that these goals were exceeded every month with an average call pick-up rate of nearly 99 percent within 30 seconds.

* The City of Hampton, Virginia, with a population of 145,000, receives about 700 calls per day through its CRM system. The city's surveys show that the majority of callers are "satisfied" to "extremely satisfied." Further, the number of calls received is steadily increasing, along with the quantity of after-hours calls--two indicators of a successful CRM initiative. (1)

As these examples imply, CRM is a primary means to transform the relationship with the constituent. Given the diminishing revenues most governments face, however, the cost-saving potential of a CRM initiative is an important consideration. This article will describe some of the most significant cost-savings opportunities available through CRM that can help a government realize its constituent service improvement aspirations while making the most efficient use of resources. This article also will describe the types of savings that are possible by implementing CRM. In many cases these are not immediate "hard" dollar reductions in the organization's budget, but rather savings in the form of efficiency gains or the ability to shift staff to areas of higher work volume, allowing a government to avoid future cost increases in those areas. It is essential to understand the difference so that a government can properly set its expectations before venturing into a CRM project.

CRM COST SAVINGS

This section will describe four ways in which CRM can help a government save money. A plan to implement CRM should consider how a government will maximize the gains it realizes from these opportunities.

911 Call Volume Reduction

One of the most widely recognized cost benefits of CRM is the potential to reduce the volume of calls going into a government's 911 number by redirecting non-emergency calls to an easily accessible and well-known alternative communication channel, such as a 311 (2) telephone number. Typically, 911 operators receive a higher salary than non-emergency constituent service representatives (CSRs). Further, a 911 call center is typically not optimized to handle non-emergency calls.

A dedicated non-emergency contact center can respond more efficiently to non-emergency calls. Hence, by establishing a convenient, easy-to-remember alternative to 911 and publicizing its availability, government can redirect the often-substantial number of non-emergency calls received by 911 to a less expensive and more efficient channel. For example, Waukesha County, Wisconsin, is currently analyzing the case for CRM and estimates that 15 to 30 percent of the calls coming into its 911 number are non-emergency in nature. (3) DeKalb County, Georgia, which is in the midst of its CRM implementation, anticipates reducing non-emergency call volume by 20 percent in the first year as a result of 311. Both counties expect to be able to reduce the staffing costs of their 911 call centers accordingly DeKalb County expects that a reduced 911 call volume will enable the county to reduce overtime expenses in its 911 center. The City of Chicago, which has almost a decade of 311 experience, has seen the benefits in terms of reduced operating costs for city departments. For instance, 125,000 fewer police squad cars were dispatched because the 311 center was able to handle non-emergency calls. The city's 311 system also is able to process 20 percent of the police department's case reports each year.

Contact Center Consolidation

In a non-CRM environment, governments typically operate a variety of independent call centers, phone numbers, walk-in locations, and e-mail contacts--each handled by a different set of employees. CRM technology allows the advent of a "universal constituent service representative" The universal CSR can handle multiple communication channels and take a variety of...