Internal Marketing

“Employee morale is affected by how much we know about the company’s plans.”

98 percent of employees agree.

Key questions regarding internal marketing

Where does it fit within an organization’s marketing plans, or within its strategic plans?

Who should do it -- marketing, human resources, public relations?

What can organizations learn from each other?

What does the diverse literature say?

Definitions: Selling the firm to its employees (Grönroos, 1981) The process of attracting, developing, motivating, and

retaining qualified employees through job-products that satisfy their needs (Berry & Parasuraman 1991)

Building customer orientation among employees by training and motivating both customer contact and support staff to work as a team (Kotler & Armstrong 1991)

A process by which employee satisfaction is leveraged to positively impact the bottom line. Satisfied employees strengthen relationships among all critical stakeholders. (Williams, Business & Economic Review, 1997)

Definition -- (Joseph 1996) The application of marketing, human

resources management, and allied theories, techniques, and principles to motivate, mobilize, co-opt and manage employees at all levels of the organization to continuously improve the way they serve external customers and each other. Effective internal marketing responds to employee needs as it advances the organization’s mission and goals.

Customer- and employee-focusedIt demands an integrative approachInternal customers -- the idea that

organizational departments serve each other

It encompasses all employees

Carlzon’s ‘moments of truth’ shaped by employees by the way they: look act talk interact with each other including facial expression, demeanor

and personality

Good internal marketing programs depend on:

Recruiting the right peopleTraining themMotivating themCommunicating with themCo-opting them (getting them to buy

into the organization and its plans)

Changing WorkforceEmployees viewed as assets, not

costsPeople will have 4-6 careers in lifetimeMore than half of women with babies

are workingMore women are starting and running

their own businesses

Trends of Internal CommunicationsFew companies develop a strategy Failure in over 80 percent of cases

involving announced changeBiggest symptom of failure - lots of

inaccurate, negative rumorsSecond symptom - learning about

change from press

Trends of Internal Communications

Employees are insulted when a less ‘rich’ channel is used

Management does not adapt message to different groups

Employees react negatively to use of buzzwords

Great differences between literal meaning, intention and effect of overly positive messages

Time Spent by PR Department on:

35%

10%

25%

30%

Media

Government

Investors

Employees

Companies not doing EnoughEmployees don’t believe what

management says.Are not sufficiently informed.Change not communicated well.Management does a bad job of

explaining reasons behind decisions.Communication is not timely.

Management Excuses Don’t have time Haven’t gotten information self Fear reactions, leaks, uproar Won’t give away power Haven’t gotten message of what’s expected of

them Are not evaluated on their communication

abilities Get no rewards for communicating Don’t see how it is useful Under-evaluate employee’s information needs

Employees Want Top Management to: Inform them ahead of time Care about how they really feel Give their supervisors enough authority to get job

done Make a strong commitment to serve the customer Have the ability to solve major organization problems Run a socially responsible organization Provide new products and services to meet

competition Place more emphasis on quality than quantity

Manager’s Communication Obligations

Carry information from top management

Explain Listen Get feedback from employees Take information from ‘down’

to ‘up’ Active role in spreading

information Sell ideas Motivate, inspire and

encourage personal development

Profile and market units Speak at meetings Negotiate Give feedback, criticism

and praise Speak personally with staff Solve conflicts Set demands Explain and defend

unpopular decisions Carry out periodic

evaluations of employees

A Good Communication Climate

InstructiveInformativeAdvisingContributiveParticipatory

Communications StrategyNature ofChange

OrganizationalDynamics

Employee DifferencesOrganizational CultureOrganizational Climate

Channel

Message

Time

Strategy

L. R. Smeltzer, An Analysis for Announcing Organization-Wide Change, Group & Organizational Studies,Vol. 16, No. 1 March 1991.

L

E E E E E

Goal

Power Structure CommunicationStructure

Tannæs, 1992

FocusWhat is size and nature of work force?What does the work force think of

organization?How satisfied are employees?What employee communications exist?How effective are communications tools?Are there special employee relationship

programs?

Communication ObjectivesIncrease employees’ knowledgeEnhance favorable attitudes toward

employerGet more adoption by employees of

behavior desired by managementMake employees spokespersons for

organization in communityReceive more employee feedback

Media Capacity & Communication Characteristics

MediumMedia RichnessCapacity

Media Characteristics

Feedback Cues/Channels Intimacy Language

Face-to-face

Telephone

Written, addressed(letter, memo)

Written, unaddressed

High

Low

Immediate Multiple Personal Natural visual, audio

Fast Audio Personal Natural

Slow Limited Personal Natural/ visual Numeric

Very slow Limited Impersonal Natural/ visual Numeric

From R. Daft and G. Huber, How Organizations Learn:A communications framework, Research in the Sociologyof Organizations, Vol.. 5, 1987.

Prescriptions for ManagersFace-to-face: non-routine and difficult

communicationsMemos: routine, simple communicationsDiscussion & Meetings: make presence

feltRich media: implementing strategyMultiple media: critical issues and need to

get message heardEvaluate appropriate technology

Media Bulletin boardsDisplays and exhibitsTelephone hotlines

or news linesInserts in paychecksInternal televisionSpeakers bureaus -

employees to community groups

FilmsVideo cassettesMeetingsTeleconferencesAudio-visual

presentationsBooklets,

pamphlets, brochures

EvaluationCommunication, Retention,

Acceptance of MessagesCo-orientational EvaluationsHuman Relations AuditsCommunication SatisfactionInternational Communications

Association Audit - extensive use of network analysis and interviews

How Leading Companies CommunicateChief executive as

communication champion

Match between words and actions

Commitment to 2-way communication

Emphasis on face-to-face

Share responsibilityBad news/good

news ratioKnowing customers,

clients, audiencesEmployee

communication strategy

A business marketer can develop a really hot system to market their product, but if they have not taken time to build in an employee communications plan, the marketing effort is dead in the water.

Gegenheimer, C. L., “Include employees in marketing”, Advertising Age’s Business Marketing, July 1998.