What is internal marketing and why is it important?

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Nicholas Watkis
Principle Consultant
Contract Marketing Service
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Internal marketing is here again. It first appeared as a concept a few years ago, then disappeared from the business press as new ideas came to fruition. But now it seems that internal marketing is back and being talked about again. What is internal marketing and why is it important?

Before assessing the merits of internal marketing. it is necessary at least to define the term “marketing”. In 1976, the Chartered Institute of Marketing defined “marketing” as being “The management process that identifies, anticipates and satisfies customer requirements profitably.” Although marketing has increasingly been used as a fashionable alternative word to describe the selling, advertising or promotion of a product or service, its definition is that of a management process.

The sole purpose of any business is to make money for the owners who provide the necessary capital, and the employees who satisfy the requirements of customers who provide the business income.

The theory of internal marketing is that customers’ attitudes toward a company are based on their entire experience with that organisation, and not just with the products. Thus everyone who has any contact directly or indirectly with the customer helps to shape that customer's experience. Therefore, customer satisfaction is deeply dependent on the performance of a company's workforce.

When internal marketing is talked or written about, it is usually considered to be a process for selling or promoting the company and its objectives to the employees. The purpose of this process is to align every aspect of a company’s internal operations to ensure they are as capable as possible of providing value to customers. While that may be a laudable theory, the flaw lies in that while creating an internal selling process to employees, a divisive “them and us” mentality can develop. Ideally, internal marketing should be seen as being the integrated internal management of all those activities that directly and indirectly support the satisfaction of customer requirements.

Commercial managers are responsible for producing and maintaining the levels of necessary profitable income for the continued development of the business. They should also ensure that all the workforce understand that individually and collectively, their actions affect customer perceptions and satisfaction, which ultimately effects the level of income on which they all depend. Instilling enthusiasm, motivation creativity and expertise is not simply a matter of communication, but of effective management and leadership.

In many businesses, the corporate organisation is governed by the internal process and not by the required outcome. Thus organisations are centred on separated departments for research, production, sales, dispatch, credit control, finance, purchasing and personnel. Unless there is strong leadership from the chief executive officer (CEO), those departments often develop a silo mentality, where the department’s own performance is a priority regardless of the overall corporate objectives.

Tips, advice and warnings

There are many books on the subject of internal marketing, but they should be considered with care. Many of them use examples from the United States and Japan, citing such examples as Apple and providing checklists of actions to be taken, but because of cultural differences, such examples may not be internationally easily transferable. Using in-house radio programme, blogs, and newspapers to reinforce organisational culture can easily be seen as means to indoctrinate with propaganda, resulting in cynicism and other counter-productive attitudes.

The overuse of corporate induction processes, bonding sessions, etc. may also result in negative attitudes and derision, and while the company song may be suitable in Japan, it may not be so elsewhere. While incentive schemes, are potentially useful, unless they can be inclusive of everyone directly or indirectly involved in customer requirements, they are likely to be divisive and counterproductive. Similarly performance related incentives may invite participants to “game the system” to their own advantage rather that to the company objectives.

The overall purpose of so-called internal marketing, is to ensure that all company employees understand that they need to cooperate fully to satisfy customers requirements in order to achieve the corporate objectives. How a company works with its customers in identifying, anticipating and satisfying their requirements is fundamental to obtaining and retaining their custom and money. Unfortunately, commercial managers rarely have full authority over all the business areas that directly or indirectly effect customers, and can often be limited to sales and sales support. In every business, everyone from the CEO to the cleaner needs to understand that their contribution collectively impinges on customer perceptions and that it is the customer who ultimately provides the money which provides their income.

What actions should the commercial manager and the CEO undertake?

  • Ensure that everyone understands that the customer is king and that they ultimately provide the money for their salaries.
  • Delegate responsibility so that individuals understand and can take a pride in their contribution.
  • Ensure people are properly paid for the level of their responsibilities.
  • Ensure that company objectives are disseminated to all levels and are understood.
  • Be open to, and encourage employee’s ideas for improvement, and efficiencies.
  • Encourage discussion and invite criticism.
  • Ensure that training, and opportunities for advancement, promotion and career development are available for the workforce at all levels
  • Read “Up the Organization” by Robert Townsend. While parts of this book may be out of date, its radical principles for business management are still a good template of the effective integrated management of profitable business, for the benefit of its owners, workforce and customers.

Internal marketing is not about communication programmes or internal selling, but about effective and inclusive staff management, motivation and leadership which is the responsibility of the commercial manger under the leadership of the CEO. 

Nicholas Watkis is the founder of Contract Marketing Service, established in 1981. He is a fellow of the Chartered Institute of Marketing and a certified management consultant of the Institute of Business Consultancy. 

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