As more firms come to appreciate the importance of employees to marketing implementation, they have become disenchanted with traditional implementation approaches. Several factors have caused this change: U.S. businesses losing out to foreign competitors, high rates of employee turnover and its associated costs, and continuing problems in the implementation of marketing strategy. These problems have led many firms to adopt an internal marketing approach to marketing implementation
The practice of internal marketing comes from service industries, where it was first used as a means of making all employees aware of the need for customer satisfaction. Internal marketing refers to the use of a marketing-like approach to motivate, coordinate, and integrate employees toward the implementation of the firm’s marketing strategy. The goals of internal marketing are to: (1) help all employees understand and accept their roles in implementing the marketing strategy, (2) create motivated and customer-oriented employees, and (3) deliver external customer satisfaction. Note that internal marketing explicitly recognizes that external customer satisfaction depends on the actions of the firm’s internal customers its employees.
The Internal Marketing Approach
In the internal marketing approach, every employee has two customers: external and internal. For retail store managers, for example, the people who shop at the store are external customers, whereas the employees who work in the store are the manager’s internal customers. In order for implementation to be successful, the store manager must serve the needs of both customer groups. If the internal customers do not receive proper information and training about the strategy and are not motivated to implement it, then it is unlikely that the external customers will be satisfied completely.
This same pattern of internal and external customers takes place throughout all levels of the firm. Even the CEO is responsible for serving the needs of his or her internal and external customers. Thus, unlike traditional implementation approaches where the responsibility for implementation rests with the frontline of the firm, the internal marketing approach places this responsibility on all employees regardless of their level within the firm. In the end, successful marketing implementation comes from an accumulation of individual actions where all employees have responsibility for implementing the marketing strategy. Walmart founder Sam Walton was keenly aware of the importance of internal marketing. He visited Walmart stores on a regular basis, talking with customers and employees about how he could better serve their needs. He felt so strongly about the importance of his associates (his term for store personnel), that he always allowed them the opportunity to voice their concerns about changes in marketing activities. Sam had strong convictions that if he took good care of his associates, they would take good care of Walmart’s customers.
The Internal Marketing Process
The process of internal marketing is straightforward and rests on many of the same principles used in traditional external marketing. As shown in Exhibit 9.4, internal marketing is an output of and input to both marketing implementation and the external marketing program. That is, neither the marketing strategy nor its implementation can be designed without a consideration for the internal marketing program.
The product, price, distribution, and promotion elements of the internal marketing program are similar to the elements in the external marketing program. Internal products refer generally to marketing strategies that must be “sold” internally. More specifically, however, internal products refer to any employee tasks, behaviors, attitudes, or values necessary to ensure implementation of the marketing strategy. Implementation of a marketing strategy, particularly a new strategy, typically requires changes on the part of employees. They may have to work harder, change job assignments, or even change their attitudes and expand their abilities. The increased effort and changes that employees must exhibit in implementing the strategy are equivalent to internal prices. Employees pay these prices through what they must do, change, or give up when implementing the marketing strategy.
The practice of internal marketing comes from service industries, where it was first used as a means of making all employees aware of the need for customer satisfaction. Internal marketing refers to the use of a marketing-like approach to motivate, coordinate, and integrate employees toward the implementation of the firm’s marketing strategy. The goals of internal marketing are to: (1) help all employees understand and accept their roles in implementing the marketing strategy, (2) create motivated and customer-oriented employees, and (3) deliver external customer satisfaction. Note that internal marketing explicitly recognizes that external customer satisfaction depends on the actions of the firm’s internal customers its employees.
The Internal Marketing Approach
In the internal marketing approach, every employee has two customers: external and internal. For retail store managers, for example, the people who shop at the store are external customers, whereas the employees who work in the store are the manager’s internal customers. In order for implementation to be successful, the store manager must serve the needs of both customer groups. If the internal customers do not receive proper information and training about the strategy and are not motivated to implement it, then it is unlikely that the external customers will be satisfied completely.
This same pattern of internal and external customers takes place throughout all levels of the firm. Even the CEO is responsible for serving the needs of his or her internal and external customers. Thus, unlike traditional implementation approaches where the responsibility for implementation rests with the frontline of the firm, the internal marketing approach places this responsibility on all employees regardless of their level within the firm. In the end, successful marketing implementation comes from an accumulation of individual actions where all employees have responsibility for implementing the marketing strategy. Walmart founder Sam Walton was keenly aware of the importance of internal marketing. He visited Walmart stores on a regular basis, talking with customers and employees about how he could better serve their needs. He felt so strongly about the importance of his associates (his term for store personnel), that he always allowed them the opportunity to voice their concerns about changes in marketing activities. Sam had strong convictions that if he took good care of his associates, they would take good care of Walmart’s customers.
The Internal Marketing Process
The process of internal marketing is straightforward and rests on many of the same principles used in traditional external marketing. As shown in Exhibit 9.4, internal marketing is an output of and input to both marketing implementation and the external marketing program. That is, neither the marketing strategy nor its implementation can be designed without a consideration for the internal marketing program.
The product, price, distribution, and promotion elements of the internal marketing program are similar to the elements in the external marketing program. Internal products refer generally to marketing strategies that must be “sold” internally. More specifically, however, internal products refer to any employee tasks, behaviors, attitudes, or values necessary to ensure implementation of the marketing strategy. Implementation of a marketing strategy, particularly a new strategy, typically requires changes on the part of employees. They may have to work harder, change job assignments, or even change their attitudes and expand their abilities. The increased effort and changes that employees must exhibit in implementing the strategy are equivalent to internal prices. Employees pay these prices through what they must do, change, or give up when implementing the marketing strategy.
Internal distribution refers to the internal interactions that disseminate the marketing strategy throughout the firm. Planning sessions, workshops, formal reports, and personal conversations are all examples of internal distribution. Internal distribution also includes employee education, training, and socialization programs designed to assist in the transition to a new marketing strategy. Finally, all communication aimed at informing and persuading employees about the merits of the marketing strategy comprise internal promotion. Internal promotion can take the form of executive speeches, video presentations, blogs, podcasts, or internal company newsletters. Given the growing diversity of today’s employees, it is unlikely that any one medium will communicate with all employees successfully. Firms must realize that telling employees important information once in a single format is not good communication. Until the employees “get the strategy,” communication has not taken place.
Successfully using an internal marketing approach requires an integration of many factors already discussed in this chapter. First, the recruitment, selection, and training of employees must be considered an important element of marketing implementation, with marketing having input to these human resource and personnel activities as necessary. This ensures that employees will be matched to the marketing tasks to be performed. Second, top executives must be completely committed to the strategy and the overall marketing plan. It is naïve to expect employees to be committed when top executives are not. Simply put, the best-planned strategy in the world cannot succeed if the employees responsible for its implementation do not believe in it or have a commitment to it.
Third, employee compensation programs must be linked to the implementation of the marketing strategy. This means that employees should be rewarded on the basis of behaviors consistent with the marketing strategy. Fourth, the firm should be characterized by open communication among all employees, regardless of their level in the firm. Through open, interactive communication, employees come to understand the support and commitment of top executives, and how their jobs fit into the overall marketing implementation process. Finally, the firm’s structure, policies, and processes should match the marketing strategy to ensure that the strategy can be implemented in the first place. On some occasions, the firm’s structure and policies constrain the ability of employees to implement the strategy effectively. Although eliminating these constraints may mean that employees should be empowered to creatively fine-tune the strategy or its implementation, empowerment should be used only if the firm’s culture can support it. However, if a company uses empowerment correctly as a part of the internal marketing approach, the firm can experience more motivated, satisfied, and committed employees, as well as enhanced customer satisfaction and improved marketing performance.
Successfully using an internal marketing approach requires an integration of many factors already discussed in this chapter. First, the recruitment, selection, and training of employees must be considered an important element of marketing implementation, with marketing having input to these human resource and personnel activities as necessary. This ensures that employees will be matched to the marketing tasks to be performed. Second, top executives must be completely committed to the strategy and the overall marketing plan. It is naïve to expect employees to be committed when top executives are not. Simply put, the best-planned strategy in the world cannot succeed if the employees responsible for its implementation do not believe in it or have a commitment to it.
Third, employee compensation programs must be linked to the implementation of the marketing strategy. This means that employees should be rewarded on the basis of behaviors consistent with the marketing strategy. Fourth, the firm should be characterized by open communication among all employees, regardless of their level in the firm. Through open, interactive communication, employees come to understand the support and commitment of top executives, and how their jobs fit into the overall marketing implementation process. Finally, the firm’s structure, policies, and processes should match the marketing strategy to ensure that the strategy can be implemented in the first place. On some occasions, the firm’s structure and policies constrain the ability of employees to implement the strategy effectively. Although eliminating these constraints may mean that employees should be empowered to creatively fine-tune the strategy or its implementation, empowerment should be used only if the firm’s culture can support it. However, if a company uses empowerment correctly as a part of the internal marketing approach, the firm can experience more motivated, satisfied, and committed employees, as well as enhanced customer satisfaction and improved marketing performance.
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