An Introduction to Internal Marketing
Talent is what separates successful and unsuccessful businesses in the knowledge economy.
Yet internal marketing is still an overlooked (or unknown) part of marketing. I believe it’s time for internal marketing to be put into practice by all companies — including yours.
What is Internal Marketing?
Internal marketing was introduced in ‘Improving retailer capability for effective consumerism’ (1976) by scholars Leonard Berry, James Hensel and Marian Burke. Back then, the term was coined to ‘focus on the reality that a retail firm’s capability for satisfying the needs of its external customers depends in part on that firm’s ability to satisfy the needs of its internal customers’.
In simpler terms, internal marketing is the process of an organisation treating its employees like customers. And not just any customers, but its most important ones. After all, employees are the most frequent buyers of the business they work for.
The employer-employee relationship is one where value is being exchanged in the form of not only money, but also time, energy and emotional connections.
Internal marketing is also about creating internal products (jobs) that satisfies the needs of your employees. These include working environment, organisational culture, training and development opportunities, job satisfaction, work-life balance and so on.
Sir Richard Branson: entrepreneur, business magnate and internal marketer
Sir Richard Branson is a great example of someone treating his staff like his number one customers. For him, they are the very foundation of his businesses. He once said: ‘Clients do not come first. Employees come first. If you take care of your employees, they will take care of the clients.’
Whilst Branson’s resounding success can’t be attributed purely to this philosophy, it’s undeniable that the vision he holds for his staff is a major differentiator, and one that helps to attract the best talent. It’s also why some claim he’s the most popular entrepreneur in the world.
Founded in 1970, Virgin now boasts 53m customers worldwide,
69,000 employees and £16.6bn in revenue.
Granted, chances are you aren’t developing commercial spacecraft, hyperloop or a Formula E team. But that doesn’t mean that internal marketing isn’t applicable to your organisation.
Why Internal Marketing matters to your organisation
We’re in the knowledge economy, also known as the talent economy. The production of wealth is led by the tertiary sector, and service firms and their employees contribute to a growing share of the Gross Domestic Product (GDP). Here in the UK, that contribution is close to 80%.
Think about it. Most of the businesses you interact with on a day-to-day basis are service businesses, and your transactions often involve a touchpoint with an employee. You buy your coffee from a barista, you pay for your weekly food shopping to a cashier, your pizza is delivered to your door (and no, my life doesn’t revolve around coffee, food and ordering pizza. Not always).
Sometimes, the direct touchpoint with an employee is supplanted by an indirect one. When you buy things online or opt for the self-checkout at the supermarket for example, you’re not interacting with a cashier, you’re engaging with a platform or machine instead. But as Elon Musk so beautifully pointed out, ‘technology does not automatically improve. It only improves if a LOT of people work REALLY hard to make it better.’
Our interactions with modern-day tech still constitute an employee touchpoint — just an indirect one.
Companies like Virgin understand that successful businesses are built from the inside-out. By treating your employees like your most important customers, you will thrive in a knowledge economy where talent is the most valuable differentiator between businesses that succeed, and those that do not.
‘Marketing is a relevant subject for all organizations in their relations with all their publics, not only customers.’ Philip Kotler, 1972
With this post, I aimed to introduce internal marketing and why I believe it’s crucial for businesses in a talent-led economy. In my future posts, I will explore how core marketing concepts can, too, be applied to the internal marketplace.
Let’s chat @wakanouka.
- Berry et al. (1976) Improving retailer capability for effective consumerism response. Journal of Retailing, Vol. 52, 3, pp. 3–14.
- Chowdhury, A. & Nazmul Hasan, Md. (2017) Factors affecting employee turnover and sound retention strategies in business organization: a conceptual view. Problems and perspectives in management, Vol.15(1), pp. 63–71.
- Kotler, P. (1972) A generic concept of marketing. Journal of Marketing, Vol. 36, 2, pp. 46–54.
- Rafiq & Ahmed (2000) Advances in the internal marketing concept: definition, synthesis, and extension. Journal of Service Marketing, Vol.14, 6, pp.449–462.
- Sasser, W.E. & Arbeit, S.F. (1976) Selling jobs in the service sector. Business Horizons, June, pp. 61–2.