How to Make Your Stakeholders Love Your Public Sector Organization (and Why It Matters)

A great deal of research has been done in the private sector into what attracts customers to companies and the secrets for creating loyal customers. Numerous investigations have shown that a customer’s perception of any given company and their brand is built on two components:

1 The functional aspect of the business – that is, what they do or provide (i.e. their products) and how the do/provide it (i.e. service), and

2 The emotional aspect of the business – that is, how the customer feels interacting with the company and using its products and services.

Interestingly, research has further revealed that these two aspects are NOT equally weighted in the customer’s mind. In fact, the emotional component has been found to play a significantly greater role in differentiating a company in the marketplace and attracting customers than the functional components and offerings do.

Successful for-profit companies have figured this out and, while they know that they must excel in the functional aspects of their business, their strategy for success and market leadership is actually focused on developing and delivering the emotional aspects of their business to the customer.

Importantly, it’s been discovered that companies that focus on differentiating predominantly on functional attributes receive only temporary levels of loyalty from their customers. That is, their customers leave them as soon as a new competitor, offering a similar product with functional enhancements or greater benefits, such as a lower price, comes along. In contrast, differentiation on emotional attributes has been found to generate true, long-term customer loyalty. Customers who have an emotional connection with a company tend to stick with that company even when a newer and functionally enhanced product or service option comes along.

In short, focusing on the customer’s emotional experience builds levels of customer loyalty that enable sustainable business growth and success.

With all this understanding of the importance of the customer experience, I often wonder why some public sector organizations still seem to treat the stakeholder experience like a frill while most seem to ignore it all together.

My only conclusion is that many public sector organizations don’t see stakeholders as customers and don’t consider stakeholder loyalty to be a necessary part of their business equation. Also, I think that many public sector organizations operate like they are the only game in town ( in many cases they are) carrying on with the mindset that stakeholders have no option but to deal with them regardless of the experience or their level of satisfaction.

However, even when this is the case, there’s just no excuse for this attitude because, quite frankly, creating stakeholder loyalty is a necessary component of every public sector organization’s “social license to operate”.

When astute public sector organizations do focus on creating and delivering an exceptional stakeholder experience they are actually able to do their work more efficiently – largely because when you treat people with care and respect they are more likely to work with you rather than against you in interactions. In addition, happy stakeholders approve the execution of your mandate more willingly and with greater support. And it’s difficult to argue against the fact that smoother and more efficient operations result in better outcomes for all stakeholders including a less stressful work environment for employees.

What public sector organization wouldn’t want to enjoy benefits like these? The good news is that they can be achieved by public sector organizations that place an emphasis on delivering an experience that their stakeholders value.

Let me give you a real-life example to show you what I mean.

Last week I had to fly out of Pearson Airport in Toronto. I’m sure that I’m not alone in disliking the security experience at airports. As recently as five years ago, going through security at YYZ was a painful experience complete with a gauntlet of serious and surly officials. Bad security line management and unsmiling personnel made going through security the necessary evil that we all had to grudgingly endure for safety’s sake.

Now, CATSA (the Canadian Air Transport Security Agency) could have kept chugging along this way but a few years ago I started to notice a change. Their security people were becoming much more friendly and pleasant to deal with. So much so that my experience last week was beyond exceptional! I was initially met by a smiling officer who scanned my plane ticket and wished me a pleasant day as I entered an extremely fast moving and efficient line of travellers. That was nice I thought but I reserved judgement as it could have been one person having a great day. However, as I proceeded through the line and the security checks I was repeatedly greeted with friendly and smiling people who made eye contact with me, were polite and helpful, and who wished me a great day at every opportunity! By the end of my security experience I was energized and happy and walked away confident that the CATSA officers had done a thorough job while also treating me with respect and care.

I actually felt that everyone on staff had made it their personal goal to make my time with them the best part of my entire day! Now that’s remarkable. In fact, I actually remarked “WOW – that was great!” as I walked away from the security checkpoint.

How many times do you hear people saying that after they go through security in an airport?!

By giving me an exceptional experience, CATSA provided me with value, however, the value is actually shared. By treating me with friendliness and care I was more relaxed and committed to working with officers to get through their security process. Having the public work with, rather than against you, enables your public sector organization’s efficiency and actually creates greater capacity to focus on critical operational elements. A calmer, happier, and more efficient environment is better for employees which almost certainly improves employee satisfaction, happiness, and engagement. As a result of this fabulous experience, I won’t dread the security lineup next time and will be happy to work with CATSA officials to achieve our mutual objective – a safe flying experience.

However, the key to sustained success for CATSA will be to deliver the same remarkable experience the next time I interact with their personnel and processes. I expect they will.

While CATSA (and all airport security agencies around the globe) could have ignored the public’s experience (because – hey – what are we going to do? – if we want to get on a plane, we are at their mercy), they have made a focused effort to realize the mutual benefits and shared value associated with building an exceptional stakeholder experience into their strategy and day to day operations.

So – given all this, I have some questions for you:

Is an exceptional stakeholder experience a key component of your public sector organization’s strategy and way of working? Why or why not?

What mutual benefits could your organization and your stakeholders enjoy if you did place greater importance on delivering an exceptional stakeholder experience? What kind of experience would your stakeholders value and what would you have to change to give it to them?

I hope that you’ll take this opportunity to explore the answers to these questions for your public sector organization. Your stakeholders will thank you!


In my next blog post I’ll explore what it takes to put a focus on the stakeholder experience into action in your public sector organization.