Hold Please: The Great Customer Service Race - Private Sector vs. Government Differences

During my career, I've been to a lot of meetings about "customer service or customer experience strategies," and I've noticed that the same terms are used for both "private" and "public" meetings. In government, it’s not unusual to hear people say, “Well, if we were in the private sector..." In many instances, the two seem like different worlds, but ultimately they are both used to describe parts of the economy and what services each sector provides. The private sector of the economy is all about private businesses, while the public sector is all about government services.

In customer service, it is imperative to know the difference between the private and public sectors because it helps define your customers’ needs. Though the terms are important, it’s not uncommon to see people use them incorrectly. But both the private sector and the public sector have distinct characteristics that distinguish them from each other.

The Private Sector is Privately Owned

The key distinctions between the private and public sectors lie in their workforces and the entities they serve. The private sector is usually made up of privately owned organizations, like corporations. But the private sector isn't just made up of big businesses. It includes small businesses, credit unions, non-profit partnerships, and charities.

The Public Sector Serves the Public

The public sector mostly operates through organizations owned by the government, and as a result, public sector workers are paid by the government. These organizations can include: holding political office, the U.S. Postal Service, and federal, state, or municipal governments. The public sector provides services that directly influence their governing province and/or country.

Private provides tangible products, while the public sector often outputs “anti-products.”

Ron Ross of The American Spectator put it nicely when he said, “The private sector’s products all around us — food, shelter, clothing, automobiles, home appliances, entertainment, for example. The public sector’s products include defense, the justice system, roads and highways, public schools, income redistribution (welfare), laws, and regulations…” It’s easy to recognize the private sector because of its products, yet it’s important not to overlook the significant services that the public sector provides.

We see that the private sector and public sector have clear distinctions, yet they often find themselves in communication with each other. Customer service methods are a great way to share a dialog between the two. However, it must be understood that there are different approaches when it comes to providing customer service in both sectors. A customer is a customer regardless of the product, yet in the public sector, when your customer is "the public," it is a little bit different. As a customer of Wal-Mart, if you are dissatisfied with the service you have experienced, you can go shopping at Target. Most of the time, with public services, you can’t shop around. In the public sector, we have long-term customers, and our challenge is to provide them with the best customer service that we can.

In order for the government to provide good customer service to its citizens, it often has to borrow ideas from the private sector. Using social media as a customer service tool, for example, is something that many successful businesses have done. Many government agencies have used a similar strategy, but it connects people directly to government services. Knowing and understanding the differences between the private and public sectors helps all levels of government meet the needs of their constituents in the long run.

This blog was inspired by an article written by Jan Mares’ “25 Differences Between Private Sector and Government Managers".