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-focused It demands an integrative approach Internal 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 people Training them Motivating them Communicating with them Co-opting them (getting them to buy into the organization and its plans)

Changing Workforce Employees viewed as assets, not costs People will have 4-6 careers in lifetime More than half of women with babies are working More women are starting and running their own businesses

Trends of Internal Communications Few companies develop a strategy Failure in over 80 percent of cases involving announced change Biggest symptom of failure - lots of inaccurate, negative rumors Second 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: Media 10% Employees 35% Government 25% 30% Investors

Companies not doing Enough Employees 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 Instructive Informative Advising Contributive Participatory

Communications Strategy Nature of Change Organizational Dynamics Employee Differences Organizational Culture Organizational Climate Channel Message Strategy Time L. R. Smeltzer, An Analysis for Announcing Organization-Wide Change, Group & Organizational Studies, Vol. 16, No. 1 March 1991.

L Goal E E E E E Power Structure Communication Structure Tannæs, 1992

Focus What 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 Objectives Increase employees’ knowledge Enhance favorable attitudes toward employer Get more adoption by employees of behavior desired by management Make employees spokespersons for organization in community Receive more employee feedback

Media Capacity & Communication Characteristics Media Richness Capacity Media Characteristics Medium Feedback Cues/Channels Intimacy Language High Face-to-face Telephone Written, addressed (letter, memo) Written, unaddressed Immediate Multiple Personal Natural visual, audio Fast Audio Personal Natural Slow Limited Personal Natural/ visual Numeric Very slow Limited Impersonal Natural/ visual Numeric Low From R. Daft and G. Huber, How Organizations Learn: A communications framework, Research in the Sociology of Organizations, Vol.. 5, 1987.

Prescriptions for Managers Face-to-face: non-routine and difficult communications Memos: routine, simple communications Discussion & Meetings: make presence felt Rich media: implementing strategy Multiple media: critical issues and need to get message heard Evaluate appropriate technology

Media Bulletin boards Displays and exhibits Telephone hotlines or news lines Inserts in paychecks Internal television Speakers bureaus - employees to community groups Films Video cassettes Meetings Teleconferences Audio-visual presentations Booklets, pamphlets, brochures

Evaluation Communication, Retention, Acceptance of Messages Co-orientational Evaluations Human Relations Audits Communication Satisfaction International Communications Association Audit - extensive use of network analysis and interviews

How Leading Companies Communicate Chief executive as communication champion Match between words and actions Commitment to 2-way communication Emphasis on face-to-face Share responsibility Bad news/good news ratio Knowing customers, clients, audiences Employee 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.