[This is a rough, unedited crib of the actual talk given at the ALGIM 2010 Web Symposium. Also I went over my allocated time so I’ve elaborated on a few areas. If you have feedback on these notes, please write to me: firstname.lastname@example.org or twitter @mathewsanders.]
Since the start of this year I’ve been working with the Local Government Services team at Datacom, which is a group of about 20 developers, analysts, and project managers who are dedicated to creating software solutions for local government.
But my background and experience is working in ecommerce projects for companies like Air New Zealand, House of Travel, AMI Insurance, The National Bank, Telecom, and New Zealand Lotteries helping to improve their online customer experience.
What I want to share with everyone today are some ideas, tools, and thinking that are established in ecommerce, and hopefully get you thinking about how they can be applied to your own projects in local government.
Why move from offline to online
Often we’re so focused on simply completing online projects that we forget to step back and look at the benefits of why we’re doing these projects in the first place. I believe it’s important, and healthy to step back and reflect on why we’re doing what we’re doing.
In ecommerce, I think of there being three main benefits to moving from offline channels to online channels:
To reach more people
To operate with more efficiency
To create new business models and opportunities
To reach more people
Here’s a Google map showing all the retail locations for Flight Centres in New Zealand. As you can see they have clusters of stores n the main centres of Auckland, Wellington, and Christchurch, and a range of stores scattered in other locations throughout New Zealand. They have a great network, but at the same time if you live outside one of the towns that has a store it’s very difficult to do business with them. And even if you live close to one of their stores you also have to visit them within their opening hours, which might be difficult depending on your work situation.
With online channels of course you remove these barriers of time and location, and have the ability to reach anyone who has an internet connection, 24 hours a day.
To increase efficiency
When you interact with people through offline channels (such as phoning a contact centre or interacting in person in a store) the total cost to interact with people is directly related to the number of people you interact with.
For instance, it costs about double the amount to interact with two people as it costs to interact with one, and about triple the amount to interact with three people as it does to interact with one.
But online channels can follow a different pattern. The total cost does increase with the number of people that you interact with (because bandwidth and server costs will increase as you reach more people) but it doesn’t follow a linear relationship, instead it doesn’t cost much more to interact with 10,000 people as it costs to interact with 1,000 people.
Something exciting happens when you think about costs as cost per interaction instead of total costs.
With offline channels, you essentially get a flat rate. It costs about the same to interact with your 50th person as it does you 500th.
But with online channels, the cost per interaction decreases with the more people that you interact with, eventually to the point where the cost per interaction trends towards zero.
Two perspectives are important here. Economically and psychologically it becomes a lot easier to interact with people. In ecommerce this can allow for businesses to pass on cost savings to customers, or even offer free services. In local government this can allow an organisation to operate with lower cost per interaction.
When you’re operating in an offline channel, customer interactions may either be consciously or subconsci