Customer Satisfaction importance in companies with Government/Public Administration as main customer?

rogerpenna

Involved In Discussions
#1
Customer satisfaction is one of the main pillars of ISO 9001. And it makes sense for most companies. Customers not satisfied will change their providers, stop referrals, etc. And you get broke.

I was wondering about the importance of customer satisfaction for companies which work mainly with government and other public administration entities...

Of course, public biddings change from country to country to country, depending on law.

So I will give you an example of how it works on mine:

- ANY purchase above a few hundred dollars, and any service that public administration must contract, must go through a public bidding process. The public bidding must be announced on a public forum (like official papers, government websites, etc).
- Anyone can participate in the bid process, as long as they meet the requirements of the product, etc.
- Bids cannot be very specific on product or how a service can be done. Meaning, they can´t be specific in a way a single company can do it. Example: we want to make a tunnel with X diameter and Y and Z parameters, which only Elon Musk's Boring Company can make.
- While technical capacity (testified documents proving you have done something similar in scope and size) is used sometimes, MOST biddings are for LOWEST price.

That means... no matter how much quality you deliver to a government customer, next bidding process, you may lose because you don´t have the lowest price. Laws regulate you can´t even do MORE than required. While most customers would be pretty happy for you exceeding their requirements, in public bidding, exceeding requirements may lead to lawsuits.

This article I guess is for the USA
Why Customer Satisfaction Needs to Be a Bigger Priority for Government | Part 1 | Periscope Holdings

"Knowing that customer satisfaction – or a lack thereof – is a major consideration for decision makers when evaluating bids/proposals, every government supplier should act as if this contract were theirs to lose at any time. "

This doesn´t exist in my country. The process is objective and customer satisfaction is subjective. That would lead to many corruption problems.

Why Customer Satisfaction Needs to Be a Bigger Priority for Government

" If you want to retain your current government customers and, even better, secure referrals to other agencies for inclusion in future bids for other contracts"

Again, this makes no sense to us. Doing everything perfect with maximum quality won´t retain our government customers. If anything else, the cost of going the extra mile for customer satisfaction may mean LOSING the next bid and the customer.

As well as referrals. There is no such thing as securing referrals to other agencies. Other agencies won´t call a company for a bidding process. They will publish the bidding process in official state or federal papers (or websites) and companies that see it and decide to take part, will do it.

-----------------------------


Who else here works in companies whose main (or all) customers are government agencies, public administration, etc, and what are your experiences with it, regarding the importance of customer satisfaction, how bidding processes work in your country or area of business, etc?
 
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Kronos147

Trusted Information Resource
#3
The process is objective and customer satisfaction is subjective.
How does the organization make this measurement objective then?

Remember, it is your organization's method of measuring customer satisfaction (per ISO 9001, what the government requires is a different issue).

The new paradigm is (OTD+FPY)/2 = Customer Satisfaction (or some variation of the formula, to weigh the factors different or introduce new variables).

Very repeatable, hard to corrupt, and is objective.
 

rogerpenna

Involved In Discussions
#4
How does the organization make this measurement objective then?
we gather customer feedback.

it just is not that important. For the reasons mentioned above.

why does ISO standard puts clients in such a high pedestal? Well, obviously because for MOST business, if you don´t do such, you will eventually crash your company.



Remember, it is your organization's method of measuring customer satisfaction (per ISO 9001, what the government requires is a different issue).
yes, I know.

what I mean is that how important is it at all, since there is no customer retention no matter how much customer satisfaction is met or exceeded?


The new paradigm is (OTD+FPY)/2 = Customer Satisfaction (or some variation of the formula, to weigh the factors different or introduce new variables).

Very repeatable, hard to corrupt, and is objective.
that calculation seems quite hard to apply on Linear Construction Sites (civil infrastructure). We do not output units of anything.
 

Kronos147

Trusted Information Resource
#5
what I mean is that how important is it at all, since there is no customer retention no matter how much customer satisfaction is met or exceeded?
The premise is you want to know where you stand, measure yourselves against an objective scale. If you evaluate yourselves as 'poor', then you know where you need to improve. If you don't measure... well....

From the movie Caddyshack:
Judge Smails: Ty, what did you shoot today?
Ty: Oh, Judge, I don't keep score.
Judge Smails: Then how do you measure yourself with other golfers?
Ty: By height.

A lot of organizations are ran by feel, or by gut.

Here is a conversation I had with an ex-boss.

Kronos: "We need a method to measure our production process"
Boss: "Why? It's fine."
Kronos: "Besides our commitment to a quality standard, don't you want to know where we stand, and use that metric to assess over time to evaluate our controls?"
Boss: "But the process is strong."
Kronos: "How do you know?"
Boss: "I just know."
Kronos: "Should we revise the quality manual to document our 'management by belief' philosophy?"
Boss: "Kronos, you are so literal. Look, I know the process is strong and effective because the production manager tells me it is."
Kronos: "You know because he told you?"
Boss: "Exactly."
Kronos: "Should we revise the quality manual to document our 'management by rumor' philosophy?"
Boss: ... "you're fired"
Kronos: "Thanks!"

It's your organization, if the organization doesn't believe in ISO 9001, and keeping objectives to track progress (a.k.a. score), nothing I could say will matter.
 

rogerpenna

Involved In Discussions
#6
Kronos: my organization doesn´t believe in the importance of Customer Satisfaction that ISO enforces, and I gave the reasons above.

That doesn´t mean we do not believe in all the rest of ISO practices, which we do and have helped us a lot in improving our company. The organization, standardized procedures, etc, demanded by ISO standard has helped us to reduce costs, reduce probability of lawsuits, etc, etc. Lots of other things too. Which is why we keep following ISO procedures and getting ISO certificate.

The customer satisfaction we only do to get the certificate (we care the auditors to properly check the REST of the system. We do not really need the certificate, but it's more expensive to do external audits if you fail in an audit. Recertification Audits cost more than Maintenance Audits)

It would be better really if we were ourselves our own customers. We have more reason do please ourselves for the improvents they give the company than to please real customers, for the reasons I mentioned regarding bidding system.

(ps: customer satisfaction IS important with a few private companies we occasionaly do work for, including some big interstate companies that have concession to run, manage and collect fares in some big roads)
 

John Broomfield

Staff member
Super Moderator
#7
Roger,

I understand. Often when doing business with a government agency we feel they are intermediaries for the real customers, the public, using the services or facilities we have designed and delivered for their benefit.

And, as you say, the public procurement laws and regulations preclude the agency from favoring our company for upcoming contracts.

But surely earning a good reputation is better than a bad one even if it does not result in immediate rewards?

If you agree then your organization needs to know what reputation it has, the reasons for any threat to its reputation and the actions being taken to protect your organization's reputation for excellent work.

As quality professionals, I suggest, we translate the standard so it makes sense sufficiently to engage our colleagues.

John
 

rogerpenna

Involved In Discussions
#8
Roger,

I understand. Often when doing business with a government agency we feel they are intermediaries for the real customers, the public, using the services or facilities we have designed and delivered for their benefit.
True. We classified the public as Interested Parties. But I suppose this thing about your customer being an intermediary to the real customer isn´t much different if you produce parts for a car company, right? The real customer would be the car buyer?


And, as you say, the public procurement laws and regulations preclude the agency from favoring our company for upcoming contracts.

But surely earning a good reputation is better than a bad one even if it does not result in immediate rewards?


That is a good question. I think it's more a question of pride for the owners than really it helping or not the company in some meaningful way.

In reality, we know that public administration is made of people and even if bound legally, a good reputation with elected officials as well as public employees might help in navigating bureaucracy.

As quality professionals, I suggest, we translate the standard so it makes sense sufficiently to engage our colleagues.

John
that I fully agree John. And it's maybe the primary reason for this thread. To gather experiences from others working on public sector on how they translated the customer satisfaction aspect of ISO to this.
 

John Broomfield

Staff member
Super Moderator
#9
Bechtel for a long time benefitted from the syndrome known as “nobody gets fired for hiring IBM”.

A good reputation not only benefits top management but it can secure jobs and careers too.

But a good reputation can easily be lost unless we are eternally vigilant.
 

Ninja

Looking for Reality
Trusted Information Resource
#10
my organization doesn´t believe in the importance of Customer Satisfaction that ISO enforces
FWIW, my organization doesn't believe in the importance of Customer Satisfaction that ISO enforces either...
...and I run it...and I own it...

I, however, totally believe in the importance of Customer Satisfaction as it benefits long term profitability.
ISO never made a company great, it isn't the standard we aim for.
If we happen to comply with all ISO principles while doing what makes sense...so be it... (and we often do fwiw).
Keep your eyes on the prize...and it ain't compliance to ISO...ISO is a tool.
 
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