New trend – Participatory Budgeting: engaging customers in your pocketbook


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Two recent articles point to a new development now being pioneered in the USA… in local government no less. Customer experience is being applied to the budgeting process. National Public Radio profiled how a “Chicago ward gives power to the people“. Similarly, The New York Times told how four NYC council districts were encouraged to “Put in their 2 cents” and given a control over part of their council member’s discretionary budget. In ward/district the citizen customers are literally deciding on how to spend upwards of $1 million – a significant sum for a neighbourhood district. There have been over 150 participatory budgeting initiatives in the UK. The term being bandied about for this is participatory budgeting (PB) but it could have equally been called crowdsourced or experiential budgeting.

What is it? In NYC, citizens propose projects (after having researched their viability) to city agencies. Customers (ie, voters) then select which of the projects go forward. In Chicago, the process starts with citizens calling out project ideas at a town hall type meeting. This long list is then pared down and researched for viability by citizens volunteers. Finally, the short list of viable projects are sent to special election. But one point is clear as quoted by a citizen customer on the website “If it feels like we decided, Its PB, if it feels like someone else decided, it’s not”

What does it produce? In both cases the type of projects that actually get funded are different in nature form those budgeted for in a more traditional top-down process. In Chicago, the traditional top-down process only funded “meat and potato” projects like street repairs. With Participatory budgeting projects tend to be more lifestyle enhancing like “showers at the beach, heated bus shelters and a $110,000 dog park”.

What’s the point? The point for city government is to get greater engagement from citizens who would not normally get involved and to drive trust. The significance for organisations is that participatory budgeting could do the same for segments of the customer base. Imagine how participatory budgeting could be used for an insurance company, hospital, telco, etc in its service enhancement process. How might customers fund your experience improvements in ways that matter to them. The ability to literally fund a project is qualitatively and quantitatively different than simply asking customers their thoughts of your already designed projects. Perhaps the best use of PB will be with non-managerial level employees – think contact centre or retail staff.

A modified process could be used in conjunction with journey mapping experience design to optimise a particular journey. This could be a recruiting perk of belonging to your fledgling customer council to help boost volunteer membership.

What’s the value? All customer research is dependent on participation. The Urban Justice Center has found that participatory budgeting has seen 40% of participants coming from the ranks of those who previously rarely voted. This is akin to those customers who rarely if ever participate in customer research. In Porto Alegre, Brazil – the birthplace of participatory budgeting, the level of attachment to the party that adopted PB rose 52%. It is yet to be seen whether PB can do the same for a branded experience in the private sector but the opportunity is there. Clearly the exact nature of PB as applied to commercial enterprise will be different than that of government but there will be shared principles: transparency, accessibility, deliberation, empowerment, local ownership, shared responsibility.

There is one other lesson to be had in this. This is another example of the developing world providing innovation to the developed. There several well know examples of experience innovation moving from South to North. Examples include microfinance and non-smartphone based mobile banking. Participatory budgeting is taking two roads less travelled – from South to North and from public to private sector. Arrogance is the bane of innovation. Don’t make that mistake.

Republished with author's permission from original post.

Qaalfa Dibeehi
Qaalfa Dibeehi is the author of "Achieving Customer Experience Excellence" and "Customer Experience Future Trends and Insights". He has 20+ years experience in the customer experience related space with particular emphasis on organisations that have a dual commercial and social/community responsibility. He is Non-Executive Director at Emerge. Previously, he was Chief Operating and Consulting Officer at Beyond Philosophy and Director at Fulcrum Analytics. He has an MBA from NYU and three other Masters Degrees from City U. of New York in Statistics, Psychology and Health Care Administration.


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