ACSI Commentary Federal Government Benchmarks 2012
February 6, 2013
Commentary on U.S. Federal Government
Citizen Satisfaction Continues to Rise for Federal Government Services
For the second consecutive year, citizen satisfaction with the services provided by the U.S. federal government increases substantially, up 2.2% to 68.4, according to the American Customer Satisfaction Index (ACSI). Since 2010, when the federal government ACSI score sank to an all-time low of 65.4, citizen satisfaction with federal services has increased by a healthy 4.6%.
The significant improvement in the federal government benchmark over the last two years is due to two interrelated factors. First, while citizens are reporting generally better experiences across the board regarding ease and efficiency of processes, customer service, and information delivery, the satisfaction driver showing the largest gain is user perceptions of the quality of government websites. Second, not only are citizens rating website quality higher, but a growing proportion of citizens are interacting with the government via this channel. Better federal website quality, combined with a larger population of citizens using these improved websites, drives much of the satisfaction improvement since 2010.
As of 2012, the federal government overall scores 3.5 points below the lowest-scoring economic sector (Information at 71.9). This public sector-private sector gap has narrowed considerably since 2010, driven by a slight drop in the Information sector’s ACSI score combined with the significant upward movement of the federal government’s citizen satisfaction benchmark over the last two years.
Although government services continue to score significantly below private sector services, some federal agencies show levels of user satisfaction similar to high-performing private sector companies. For example, the U.S. Mint, the Department of Education’s online Free Application for Federal Student Aid (FAFSA), the Small Business Administration loan recipients programs, the National Weather Service, the Pension Benefit Guaranty Corporation and several of its programs, and the State Department’s Bureau of Consular Affairs generate ACSI scores in line with (and sometimes better than) the customer satisfaction leaders among private sector firms. Considering that virtually every large company has substantially more resources devoted to improving the customer experience than any government agency, the strong performance by these select agencies and programs is all the more impressive.
At the department level, citizen satisfaction varies widely. While some departments, such as Interior (81), Defense (75), and Veterans Affairs (74), provide user experiences comparable to the private sector and the national customer satisfaction benchmark (currently 75.9), others perform less well. For instance, Homeland Security (66) and Treasury (59) both score poorly.
But even within low-scoring departments and agencies, user satisfaction is not always universally weak. Consider, for example, the Internal Revenue Service, which is part of the Treasury Department. Across different categories of tax filers, user satisfaction varies considerably, with large business/international filers (57) and paper filers (58) performing well below small business/self-employed filers (67) and electronic filers (79).
Monopoly Power and Satisfaction
One commonplace explanation for the relatively poor performance of government in providing satisfying services is a lack of competition. That is, because government has almost no direct competition for its “buyers” across virtually all of the services it offers, there is little motivation to provide high-quality services. When analyzing public and private sector ACSI data relative to monopoly power and switching barriers (or obstacles to choosing an alternative supplier), there would seem to be at least some truth to this argument.
In industries with plentiful competition for buyers and lower barriers to switching—such as soft drinks, automobiles, and beer—consumer satisfaction is strongest. In these and similar industries, companies must compete vigorously to win customer loyalty because customers can easily switch to one of many alternative brands in the marketplace. In competitive markets where multiple suppliers exist, but conditions are conducive to erecting barriers to switching—such as banking and wireless phone service—customer satisfaction benchmarks are lower.
The poorest ACSI performance occurs in industries where very little or no competition exists, such as airlines, subscription TV service, and, of course, government. In the private sector, more competition is an easy and appealing response to poor customer satisfaction. For government, where many “services” are actually regulatory requirements and where competitors would be unlikely to enter the market even if permitted (such as tax collection), solutions are more elusive.
Trust in Government
Customer satisfaction in the private sector has been shown to be vital for driving outcomes central to economic performance, such as revenue growth, market share, and stock price. But for federal government, where the “customer” has little by way of alternatives (short of relocating to another country), the relationship between satisfaction and trust in government is of greatest importance.
Citizen trust, which when high is typically thought to ease the job of government in creating new rules and in winning popular acceptance of its actions, has been mostly on the decline in societies throughout the world over the past several decades. The ACSI measures two distinct types of trust with the U.S. federal government: trust in the specific federal agency experienced and trust in the federal government overall.
When asked about the federal government as a whole, Americans indicate very low trust (a score of 43, up from 36 in 2011). On the contrary, trust is much stronger for specific agencies whose services citizens have experienced directly (71, up from 69 in 2011). In other words, while citizens have very low trust in the federal government in the abstract, they tend to report much higher trust in the particular agencies with which they actually interact.
Contact Mode Impacts Satisfaction
Citizens interact with the government through a variety of channels that have increased in number over the past several years with the emergence of new communications technology. Not surprisingly, satisfaction with federal agencies varies depending on how the citizen interacts with the government.
Citizens who interact with an agency using e-government channels are reasonably happy. With the exception of face-to-face contact via an agency visit (which is more expensive and becoming less common), e-government channels (websites at 67 and electronic mail at 66) outperform contact by telephone (65) and materials received through the mail (62). While these results may be due, in part, to the nature of the issue at hand (for example, using a call center may be a last resort when other alternatives have failed), they do confirm that electronic channels will likely continue to gain ground for reasons of both cost efficiency and user satisfaction.