Download The Importance of Internal Marketing to The Modern Firm

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 customerfacing 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
Brand
advoca
cy
Retentio
n
IM
Emp.
Satisf.
Emp.
Attraction
Emp.
Commi
-tment
Cust.
Satisf
.
Performanc
-e
Cust.
loyalty
Profitabilit
-y
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: Innovation
Hire ‘em young
Full freedom
Caring
Individually-tailored compensation
packages
A sense of being important is being
instilled in the employees
Name: Archana
Title: Software Engineer in Test
Office: Mountain View, California, USA
Hometown: Bangalore, India
Education: University of Houston & Rice University, MS
in Computer Science
Why did you decide to come to Google?
Why do you like working at Google?
What
is your
favorite
perk/benefit
about
Google?
Before
I joined
Google
I worked at
two working
start-upsatand
it was great fun working in a
………………
there is an enormous amount
of positive
that
me going
small work environment………………
Google
was likeenergy
working
forkeeps
a startand
growing…………my
voice
is heard
irrespective
oflaundry
mythe
position
………at
times
We
have
a lot of on-site
amenities
massages,
facilities,
dental
up……………………
Google
has
the………
reputation
of hiring
smartest
people
in the
when
I amhair
stuck
in a problem,
never
thinkpeople……………
twice
to approach more
services,
styling,
daycare
carto
wash,
and
more………but
industry
and
I always
wantedIfacilities,
to
workhave
with
smart
someone………………
I amI surrounded
by component
very smart of
people
who workforce
are alwaysis a
importantly, knowing that
am a valuable
Google’s
willing
to help me
great motivator
for………
me.
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