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Marketing to Employees Internal Marketing in A Service Organization By Arun Kottolli

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Nature of Services Marketing <ul><li>Services are consumed as it is produced </li></ul><ul><li>Services marketing has limited influence on customers prior to purchase than goods </li></ul><ul><ul><li>Need to experience intangible service to know it </li></ul></ul><ul><ul><li>Experience influences Post-Sale marketing </li></ul></ul><ul><ul><li>Experience influences word-of-mouth communication </li></ul></ul><ul><li>Services marketers can create brand awareness & induce trial </li></ul><ul><li>Experience of benefits builds brand preference and brand value </li></ul>

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Nature of Services Marketing <ul><li>Services marketing is also done by service providing personnel </li></ul><ul><li>All these influences customer satisfaction and customer retention </li></ul><ul><li>Delivering excellent quality service is the key!! </li></ul><ul><li>Thus quality of employees influence quality of service – Effectiveness of services marketing </li></ul><ul><li>Service firms must market itself to employees first </li></ul>

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An Integrative Framework Turning Marketing into A Line Function Identifying the right services Doing the service Right the first time Doing the service Right every time Managing & Exceeding Customer Expectations Marketing to New customers Managing Experience Branding the firm Marketing to Existing Customers Marketing to Employees Maximize market Potential Delivering Quality Service Building a Marketing Organization

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What is Internal Marketing? <ul><li>Internal Marketing is attracting, developing, motivating and retaining qualified employees through job-products that satisfy their needs </li></ul><ul><li>Internal Marketing is the philosophy of treating employees as customers </li></ul><ul><li>Internal Marketing is wooing employees to accept & believe the firm’s service offering </li></ul>

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Goal of Internal Marketing <ul><li>Ultimate goal is to encourage effective marketing behavior in all employees </li></ul><ul><li>Build an organization of marketers who are willing and able to create true customers for the firm </li></ul><ul><li>“ A knowledgeable, satisfied employee is our best marketing agent…We treat our employees the way we want them to treat our guests” -- Hyatt Hotels </li></ul>

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Essentials of Internal Marketing Attracting, Developing, Motivating & Retaining Qualified Employees Compete for Talent Offer a Vision Prepare People to Perform Stress on Team Play Know thy Customer Leverage The Freedom Factor Measure & Reward

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Compete For Talent <ul><li>Hiring the best possible people to perform the service is a key factor for success </li></ul><ul><li>Hiring is not just a HR function </li></ul><ul><li>Service sector is the largest employer </li></ul><ul><ul><li>There will always a shortage of skilled resource </li></ul></ul><ul><li>To hire the best – think like a marketer: </li></ul><ul><ul><li>Aim High, Use multiple methods, Cast a wider net, & segment the market </li></ul></ul><ul><ul><li>Don’t lower the standards </li></ul></ul><ul><ul><li>Hire from different population segments </li></ul></ul><ul><ul><li>Use Flexible terms – timings & benefits </li></ul></ul>

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Offer A Vision <ul><li>Attracting & retaining the best talent requires a clear vision to be presented to employees </li></ul><ul><li>Paycheck alone will not keep a person emotionally involved </li></ul><ul><li>Vision should state: </li></ul><ul><ul><li>How their work fits in the organization </li></ul></ul><ul><ul><li>How they contribute to the firm </li></ul></ul><ul><ul><li>The cause for serving customers </li></ul></ul><ul><li>Great companies present a vision which invokes a passion in employees </li></ul><ul><li>Use every opportunity to present the vision </li></ul>

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Prepare People to Perform <ul><li>Training is needed to develop and motivate employees to perform superior service </li></ul><ul><li>Employees may have the technical skills but may not have enough knowledge </li></ul><ul><ul><li>They know “ how” but not “ Why” </li></ul></ul><ul><li>Training is an ongoing continuous process </li></ul><ul><ul><li>Not just a one time deal </li></ul></ul><ul><ul><li>Involve middle managers as teachers </li></ul></ul><ul><li>Build a high-learning company </li></ul><ul><ul><li>Institutionalize learning </li></ul></ul><ul><ul><li>Evaluate & fine tune learning process </li></ul></ul><ul><ul><li>Use Role Models </li></ul></ul><ul><ul><li>Use a mix of learning approaches </li></ul></ul>

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Stress on Team Play <ul><li>Service work is demanding, often frustrating, sometimes demoralizing </li></ul><ul><ul><li>Banks, Airlines – repetitive jobs, rude customers </li></ul></ul><ul><li>Team work is an antidote for burnout </li></ul><ul><ul><li>Improves morale, increases peer support </li></ul></ul><ul><ul><li>Motivates employees </li></ul></ul><ul><ul><li>Allows Job rotation </li></ul></ul><ul><li>Team work requires attitude shift from management & Employees </li></ul><ul><ul><li>Team Leadership </li></ul></ul><ul><ul><li>Shared Goals </li></ul></ul><ul><ul><li>Team Performance measurement </li></ul></ul><ul><ul><li>Team rewards in addition to individual rewards </li></ul></ul>

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Leverage the Freedom Factor <ul><li>Strict By-the-book management inhibits </li></ul><ul><ul><li>Employee’s ability to provide service </li></ul></ul><ul><ul><li>Undermines confidence in Management </li></ul></ul><ul><ul><li>Stifles creativity and personal growth </li></ul></ul><ul><ul><li>Chases out the most talented employees </li></ul></ul><ul><li>Freedom to provide “by-the-customer” service makes employees innovate and ensure full customer satisfaction </li></ul><ul><li>Empowerment gives people the best avenue to succeed & ownership of the success </li></ul><ul><li>Empowerment must be done within a set of flexible rules </li></ul><ul><li>Establish Authority & responsibility </li></ul>

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Measure & Reward <ul><li>Employees need to know how performance is measured and rewarded </li></ul><ul><ul><li>Define Output & Behavioral measures that contributes most to the company’s vision & strategy </li></ul></ul><ul><ul><li>Performance measurement should be Transparent & well understood </li></ul></ul><ul><li>Reward must be linked to company’s vision & Strategy </li></ul><ul><li>Distinguish between competence pay and performance pay </li></ul><ul><li>Use multiple reward methods to encourage positive behavior </li></ul><ul><li>Reward teams & also individuals </li></ul>

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Know Thy Customer <ul><li>Know your customer’s to tailor jobs of employees </li></ul><ul><li>Employees are the internal customers </li></ul><ul><li>Get feedback from frontline employees and customers </li></ul><ul><ul><li>Value their inputs & participation </li></ul></ul><ul><li>Be prepared to act on the feedback report </li></ul><ul><li>Are your employees willing to become your customers? </li></ul><ul><li>Would employees recommend the company to others? </li></ul><ul><li>Use market research to include employees </li></ul>

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Manager’s Action List <ul><li>Do we compete as hard for talented employees as we do for Customers? </li></ul><ul><li>Does our company stand for something worthwhile? </li></ul><ul><li>Do we prepare our employees to perform excellently? </li></ul><ul><li>Do we stress on team play? </li></ul><ul><li>Do we allow our employees the freedom to come through for our customers? </li></ul><ul><li>Do we measure & reward that which is important? </li></ul><ul><li>Do we listen to our employees? </li></ul>

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Summary <ul><li>A service company is as good as its people </li></ul><ul><li>Internal marketing is necessary to attract and retain the best talent </li></ul><ul><li>Companies that practice best internal marketing will: </li></ul><ul><ul><li>Compete aggressively for market share </li></ul></ul><ul><ul><li>Serve customers better </li></ul></ul><ul><ul><li>Win with quality service </li></ul></ul><ul><ul><li>Attract other talented people as potential employees </li></ul></ul>