The Importance of Internal Marketing to The Modern Firm

BY: Juhi Mohan (41)Kafeel Jafri (43)

What is Internal Marketing A company faces two markets:

External market, comprising of customers

Internal market, comprising of employees

A firm should sell itself to both the markets in order to have maximum profits, the ultimate goal of any firm.

CONTD… Internal marketing is attracting, developing,

motivating and retaining qualified employees through job-products that satisfy their needs.

Its a marketing perspective of managing an organization’s Human Resources, hence sounds more like HR and less Marketing.

Convince your people and they will convince the world

Three Levels of Internal Marketing

Situations where IM is called for Developing a service culture Maintaining a service culture Introducing new offerings,

campaigns, technologies and service processes to employees

Developing a service culture Enable employees to understand and

accept mission, strategies, offerings, campaigns and processes

Create positive relationship between people in the organization

Develop a service-oriented management and leadership style

Teach employees service-oriented communications and interaction skills

Maintaining Service Culture Ensure encouraging management

methods and enhance the service-mindedness and customer orientation of employees

Ensure that good internal relationships are maintained

Ensure continuous internal feedback and information

Introducing new offerings, campaigns, technologies and service processes to employees

Make employees aware of and accept: New offerings before launch Campaigns and activities New ways in which various tasks are to

be handled

Importance of Internal Marketing

Management is about working with whole persons and not employees.

Living the brand, eg IKEA, Dell, IBM, Virgin.

Proud and proud of it, it is all about pushing the positives.

Outperforming the competitors.

CONTD…

“ Internal marketing is more vital than external marketing. Customer-touching and customer-facing employees, not external marketing, drive acquisition and retention. Solution: Invest in internal marketing, branding and promotion. Work with HR, IT and operations to get employees involved in the demand chain."

:- John Schultz

Traditional Firm Vs Modern Firm

Stable Dynamic

Inflexible Flexible

Job focused Skill focused

Individual oriented Team oriented

Command oriented Involvement oriented

Rule oriented Customer oriented

Managers take decisions Employees participate

Relatively homogeneous wokforce

Diverse workforce

Specific working hrs Work anywhere, anytime

Internal Marketing in Modern Firm

Firms are in continuous transition, M&As, downsizing, rightsizing

Firms re-brand; all stakeholders including the employees should be communicated to

Empowering staff to further customer relationship

More contract and less full time employment

CONTD…

There is less reciprocal loyalty between employer and employee

New ways of working require organizations and staff to constantly learn new skills

How Internal Marketing Works

IM Profitabilit-y

Emp. Satisf.

Emp. Commi-tment

Cust. Satisf.

Cust. loyalty

Retention

Brand advoca

cy

Emp. Attraction

Performanc-e

Place in Modern Marketing Model

Contemporary Internal Marketing in different Companies

Banking Services SBI: Internal cross selling (earlier only

job-specific training) Loans at cheaper rates No commission for inter-city funds

transfer/DD etc. HDFC: Training comprises of both

hard and soft skills. “Better to lose a person to another department than to another bank”

IT Industry

Brand image: InnovationHire ‘em youngFull freedom CaringIndividually-tailored compensation packagesA sense of being important is being instilled in the employees

Why did you decide to come to Google?

Before I joined Google I worked at two start-ups and it was great fun working in a small work environment……………… Google was like working for a start-up…………………… Google has the reputation of hiring the smartest people in the industry and I always wanted to work with smart people……………

Why do you like working at Google?

……………… there is an enormous amount of positive energy that keeps me going and growing…………my voice is heard irrespective of my position ………at times when I am stuck in a problem, I never have to think twice to approach someone……………… I am surrounded by very smart people who are always willing to help me ………

What is your favorite perk/benefit about working at Google?

We have a lot of on-site amenities ……… massages, laundry facilities, dental services, hair styling, daycare facilities, car wash, and more………but more importantly, knowing that I am a valuable component of Google’s workforce is a great motivator for me.

Name: ArchanaTitle: Software Engineer in TestOffice: Mountain View, California, USA Hometown: Bangalore, IndiaEducation: University of Houston & Rice University, MS in Computer Science

Encouraged Nap Time

Right from offer kit to onsite transfer to having Yahoo ! Logo painted on bike, internal marketing is there everywhere

Freedom to express new ideas

Friendly relations in the team

Life @ Life and work: Flexible Work

Options, Family Focus, Personal and Professional Development, Health and Wellness

Giving Back: supporting local schools and other CSR activities

Intel Values: Customer Orientation, Discipline, Quality, innovation, results-oriented

INTERNAL MARKETING THOUGH ADVERTISING

Intel

IBM

HCL

Internal Marketing and Downturn

Communicate extensively Get information from where the customer

action is, and get it to the operating people - fast

Suggestions Company intranet CEO Blog/Email Town hall meetings Internal webcasts

Some Hard lessons McDonald’s failure to demonstrate its

organizational values and deliver on its brand promise In 2001, a University of Michigan study on

customer service ranked McDonald’s among the poorest performers relative to customer satisfaction

on any given day, 11% of McDonald’s customers were dissatisfied with their visit

nearly 70% of the dissatisfied customers were further dissatisfied with the way their complaint was handled

CONTD… More than half of all dissatisfied customers

cut back on their visits to McDonald’s and told as many as ten other people about their bad experience

The top five complaints by McDonald’s customers were rude employees, being out of Happy Meal toys, slow service, missing product/wrong order and unclean restaurants

This was costing the chain approx $750 mn every year

The way at Infosys In March 2006 launched a global branding

campaign Idea ‘to win the flat world’ conducted an extensive internal campaign

to bring over 50,000 of its employees on board with the new positioning

From March 2006 to June 2007, Infosys increased its annual revenues from $2 billion to $3 billion. A significant portion of that increase was attributed to the internal marketing

Mantra at Virgin Group

A diversified group with over 200 privately held companies

It is more than just posters in the hallway

Brand + HR new best friends Internal communication is lifeline

LLOYDS TSB Three mergers in one year created a single

brand with 77,000 employees and 15 million customers

Need for integrating employees, integrated range of products and brand proposition

To communicate to customer it needed to communicate with the employees, hence a comprehensive and sustained internal marketing programme was launched

CONTD… Key component was a live event at

Birmingham ‘your life your bank’ 5,000 pathfinders which included 2,000

senior managers Contributions from top management to

signage designer On the day of full launch the CEO

addressed the staff live on business TV Performance by Corrs a welcome letter to

every employee.

Future Trends

Five Meta Trends That Effect the Society and hence the firm

Cultural Modernisation Economic Globalisation Universal Connectivity Transactional Transparency Social Adaptation

THANK YOU