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Since the issuance of Executive Order 12862 "Setting Customer Service Standards," customer satisfaction measurement has become prominent in the Federal Government. The thrust of this initiative is to have the Federal Government function more like private industry. This paper examines an approach to customer satisfaction measurement currently being done in the Federal Government. Issues related to customer definition, sampling frames, response rates, confidentiality and whether satisfaction measurements can be comparable and meaningful across different agencies and over time are also discussed. These issues are very important given the track record for customer surveys in the literature thus far. These surveys have suffered from poorly designed questionnaires and low response rates. Moreover, the few behavioral indicators used in the private sector (e.g., intention to repurchase and insensitivity to increases in price) to evaluate the relationship between customer satisfaction and customer loyalty may not always be relevant to the types of interactions government agencies have with their customers. Given the costs involved in designing and conducting these surveys and the importance of the decisions which may be based on them (e.g., budget allocations and employee performance), it is essential to understand the uses and limitations of this type of measurement.
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