App for That! Multi-Channel ROI, Benefits, and Cost Savings

Posted on March 15, 2018

There’s an App for That! by City SourcedCitySourced is an enterprise platform for local and state government that was founded in 2008. It began as a best of breed service request solution (311, report a pothole, graffiti etc.) but has evolved to focus more broadly on providing governments with a complete native mobile app for residents to communicate with every department of their community.

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We recently talked about the idea of Channel Shift and the value gained from it. Today we’re going to dive a little bit more into the benefits of Channel Shift, looking at it from the perspectives of:

  1. Increasing Total Resident Engagement
  2. Cost Saving

According to Pew research, 33% of households own three or more smartphone devices. As a result, smartphone usage and adoption are a given. By adopting a multi-channel approach, that includes mobile, telephone, chatbots, and AI, your agency can ensure that you’re interacting with your residents on the device and medium of communication that they prefer most.
Naturally, this will lead to increased total engagement. If you’re not on a medium of communication that is favored by your audience, then you won’t be fully capturing their attention nor the conversations that they’re having about your community and about the work your agency does.
However, multi-channel isn’t purely about an approach of “more is better”. Instead, we think about multi-channel as an increase in total conversations, but also doing it from a cost-conscious perspective. And we can do that by matching the correct channel of communication with the appropriate type of communication.
As McKinsey research shows, live interactions, such as an in-person conversation or a live telephone agent, are the most expensive interactions on a per transaction basis. And the reason is that it requires people, the most expensive cost aspect of any local government. Also, the need to do these interactions live and in real-time results in the lowest capacity for communication. So basically, you’re taking the most expensive input and asking the most of it by minimizing its total capacity. All of that is a fancy way to say that it results in being the most expensive form or medium of communication.
Therefore, as we advocated before, we’re not suggesting eliminating this entirely. Instead, we’re saying that because these transactions cost an average of $5-7 per interaction, you should match it with the appropriate type of transaction.
For many of you, the idea that your customer service is a transaction and should be matched on a cost basis with a value of the transaction probably seems a bit foreign. But, the more we think about the cost of transactions, the more you can optimize and grow the amount of interaction with your constituents.
In an ideal world, we could precisely match the cost of the transaction with the exact amount of value created. This isn’t feasible, but it gives a good framework for how we can start to think about the cost to value of each transaction. The more we match the value or type of transaction with a cost of intaking that transaction, the more this way of thinking allows us to also grow the total number of conversations because it isn’t just about cutting costs and reducing overhead, instead it’s about appropriately justifying the need to spend money on customer activities that align with your agency’s goals and the values you’re trying to create.
You can match more expensive transactions, such as those that require a live person to interact, with things that generate a lot of value for the city. For example, you would want a live person to help with someone who was trying to create a new business license to expedite that process. Or if you had a contractor who was working to build new housing in your community, you would want to dedicate expensive transaction resources toward facilitating that process and moving it forward. On the other hand, there are really important goals and transactions for your city that are better suited for the simple, less expensive digital solutions, such as with a push to pay mobile notification that alerts a resident of their water usage, asks them to approve it quickly on their phone, and offers them an option to pay that bill with the click-of-a-button. This type of solution informs the customer and it helps ensure compliance with bill pay, thus reducing cost.
Channel Shift is all about matching the right communication for the need at hand. In doing so you can increase overall engagement and cost savings.
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