Astute marketing executives have been quick to see the opportunity in using the techniques of internal marketing to institutionalize an outward looking sales culture, build strong internal support for marketing programmes and campaigns, as well as add that little bit extra to their total marketing efforts. For many, the practice is a new one, but they are fast learning that it is an important one. Traditionally, the emphasis was solely directed toward capturing customers. Now marketing executives are seeing that there is another half to the programme of capturing and retaining customers, and that this missing half is inside the organization, namely internal marketing. The missing half is derived from the recognition that employees, more than anything else, affect the external customer maintenance process. With this new realization, smart marketers have begun to search for ways to involve employees to execute the marketing plan. This focus includes employees who do not perceive themselves as being part of the marketing process, such as non-customer-contact employees, who in the course of a week's work may never see a single customer. Consequently, marketing budgets and energies have started to be redirected to these so-called internal customers.

First Union bank, of the USA, has learnt that the concepts and techniques of external marketing are usefully transposed to the internal context. Goals of planning, segmentation, differentiation and promotional strategies can all be accomplished effectively with a well-conceived internal marketing mix.

First Union has found that the techniques of market research are very helpful in the task of getting to understand and know employees. Traditional external skills and techniques can be easily deployed internally to increase internal understanding and knowledge. Particularly useful are employee opinion research, attitude surveys, leadership and communications studies (of internal publications), focus groups, and feedback systems. Newer methods that have been used by First Union that add to the traditional ones are such techniques as climate studies and ‘deep sensing’ sessions, where executives use small groups and dialogue sessions to discover feelings that employees have about their organization.

First Union is also involved in identifying executives with strong intuitive skills, who are particularly perceptive about employees’ concerns, and encourages them to share their feelings about employee attitudes and wants with bank management. For example, First Union management identified several employees who were employee sensitive to provide a first indication of how employees will react to change of policy and procedures. First Union has found them to be an invaluable source of initial insight, and uses them on a regular basis.

Once First Union managed to get over the traditional assumption that all employees are the same and therefore communicated and treated them in only the broadest terms, they started to find many differences. The way to surface these differences was to consider that the employee base is composed of groups or segments with many different interests. Once First Union began to think in terms of differentiating their employee base, they began to see how they could tailor internal marketing programmes to segments to achieve the outcomes they wanted.

First Union has utilized both demographic and psychographic analysis to segment the employee base, and discovered much useful information. The range of criteria to segment the internal market is dependent on the questions being asked, but most useful amongst these are criteria such as age, sex, education, family status, race, income and job function. Psychographic segmentation criteria have included elements such as perceptions, attitudes, beliefs and values about work, relationships, and approach to life. Internal segmentation has helped the internal marketing team not just appreciate the differences, but also to use these to design more effective communication programmes and think up specific ways of motivating targeted segments toward customer consciousness. One of the insights emerging from the internal probing was that age is a major differentiator. Employees under 30 are different from those over 30. Typically, those over 30 tend to be more loyal and more conservative, while those under 30 have far less conservative views, are more willing to experiment and cope better with change (structural, technological, as well as environmental). Through this appreciation, it was possible to design a different communication approach for these two employee segments and utilize a different means of reaching out to them.

First Union found a highly credible means of communication: employee television. First Union found that the under-30 group, which makes up about two-thirds of its employee base, believes that television has a high level of credibility as opposed to print media. Additionally, they place high value on the convenience of communicating via television as opposed to daily travelling long distances to attend meetings.

First Union also discovered that simplistic segmentation of the employee base is not sufficient. They need to track and understand what is going on with employees. An important factor to track is to ask what workplace and career issues are important to employees. The changes that have occurred in this respect within the financial sector are fairly dramatic. For instance, a large proportion of employees now enter the profession as graduates, they are younger and with the intensely competitive environment they are also very fickle in their loyalty to the firm. All this information is important in trying to design ‘job product’ packages for employee motivation and customer consciousness. Knowing where employees are coming from makes this task that much easier.

By arming itself with deeper insights about its employees, First Union found that it could create better communications and motivational programmes to create customer-led quality products and service. By gathering factual information, employees’ jobs did not become easier, but they became better and more fulfilling.

Source: Sullivan, M. P. (1985). Exploring the untapped resource of internal marketing. American Banker, 150 (30 October), 4–6.