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

Nature of Services Marketing 4Services are consumed as it is produced 4Services marketing has limited influence on customers prior to purchase than goods =Need to experience intangible service to know it =Experience influences Post-Sale marketing =Experience influences word-of-mouth communication 4Services marketers can create brand awareness & induce trial 4Experience of benefits builds brand preference and brand value

Nature of Services Marketing 4Services marketing is also done by service providing personnel 4All these influences customer satisfaction and customer retention 4Delivering excellent quality service is the key!! 4Thus quality of employees influence quality of service – Effectiveness of services marketing 4Service firms must market itself to employees first

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

What is Internal Marketing? 4Internal Marketing is attracting, developing, motivating and retaining qualified employees through job-products that satisfy their needs 4Internal Marketing is the philosophy of treating employees as customers 4Internal Marketing is wooing employees to accept & believe the firm’s service offering

Goal of Internal Marketing 4Ultimate goal is to encourage effective marketing behavior in all employees 4Build an organization of marketers who are willing and able to create true customers for the firm 4“A knowledgeable, satisfied employee is our best marketing agent…We treat our employees the way we want them to treat our guests” -- Hyatt Hotels

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

Compete For Talent 4Hiring the best possible people to perform the service is a key factor for success 4Hiring is not just a HR function 4Service sector is the largest employer =There will always a shortage of skilled resource 4To hire the best – think like a marketer: =Aim High, Use multiple methods, Cast a wider net, & segment the market =Don’t lower the standards =Hire from different population segments =Use Flexible terms – timings & benefits

Offer A Vision 4Attracting & retaining the best talent requires a clear vision to be presented to employees 4Paycheck alone will not keep a person emotionally involved 4Vision should state: =How their work fits in the organization =How they contribute to the firm =The cause for serving customers 4Great companies present a vision which invokes a passion in employees 4Use every opportunity to present the vision

Prepare People to Perform 4Training is needed to develop and motivate employees to perform superior service 4Employees may have the technical skills but may not have enough knowledge =They know “how” but not “Why” 4Training is an ongoing continuous process =Not just a one time deal =Involve middle managers as teachers 4Build a high-learning company =Institutionalize learning =Evaluate & fine tune learning process =Use Role Models =Use a mix of learning approaches

Stress on Team Play 4Service work is demanding, often frustrating, sometimes demoralizing =Banks, Airlines – repetitive jobs, rude customers 4Team work is an antidote for burnout =Improves morale, increases peer support =Motivates employees =Allows Job rotation 4Team work requires attitude shift from management & Employees =Team Leadership =Shared Goals =Team Performance measurement =Team rewards in addition to individual rewards

Leverage the Freedom Factor 4Strict By-the-book management inhibits =Employee’s ability to provide service =Undermines confidence in Management =Stifles creativity and personal growth =Chases out the most talented employees 4Freedom to provide “by-the-customer” service makes employees innovate and ensure full customer satisfaction 4Empowerment gives people the best avenue to succeed & ownership of the success 4Empowerment must be done within a set of flexible rules 4Establish Authority & responsibility

Measure & Reward 4Employees need to know how performance is measured and rewarded =Define Output & Behavioral measures that contributes most to the company’s vision & strategy =Performance measurement should be Transparent & well understood 4Reward must be linked to company’s vision & Strategy 4Distinguish between competence pay and performance pay 4Use multiple reward methods to encourage positive behavior 4Reward teams & also individuals

Know Thy Customer 4Know your customer’s to tailor jobs of employees 4Employees are the internal customers 4Get feedback from frontline employees and customers =Value their inputs & participation 4Be prepared to act on the feedback report 4Are your employees willing to become your customers? 4Would employees recommend the company to others? 4Use market research to include employees

Manager’s Action List 4Do we compete as hard for talented employees as we do for Customers? 4Does our company stand for something worthwhile? 4Do we prepare our employees to perform excellently? 4Do we stress on team play? 4Do we allow our employees the freedom to come through for our customers? 4Do we measure & reward that which is important? 4Do we listen to our employees?

Summary 4A service company is as good as its people 4Internal marketing is necessary to attract and retain the best talent 4Companies that practice best internal marketing will: =Compete aggressively for market share =Serve customers better =Win with quality service =Attract other talented people as potential employees