By Carol Samms of Through the Loop Consulting

Most of Through the Loop’s focus has so far been the external face of the brand in terms of attributes, properties and expression. This feature examines the internal face of the brand and how this is the key of the process of Internal Marketing in the organisation. There are many signals that Internal Marketing can be just as potently used as external marketing in the late 1990s. There are some clear forces of change driving this momentum.

• Many enterprises are continually in some form of transformation-mergers, alliances, downsizing and rightsizing generating the need for constant communication.

There are some clear changes in the expected pattern of employment in the future and it is useful to look how Unisys view these prospective changes:

Each of these drivers is increasing the need for Internal Marketing. However, to date, there has been a considerable knowledge gap about the components of Internal Marketing. To reinforce this point, a study by Intercommunic8 reported in Marketing Week showed that 85% of companies did not even have a human resources or marketing budget for internal promotions. The consideration of effectiveness was not even on the radar.

The staff represent the "coal-face" of the corporate brand. They meet, greet and serve customers in a variety of different ways, face-to-face, on-line, via telephone and so on. Customer relationships depend on their attitude and their loyalty. In turn they build loyalty longer term for the company. The longevity of customer relationships is a continuing issue for many companies as it costs more to recruit a new customer than often to serve a customer of longer standing. To motivate staff, it is necessary for communication to flow horizontally and vertically (upwards and downwards) to all staff levels. This process of communication should include the brand mission, philosophy and core values. Many organisations are unable to harmonise these communications flows to reach all staff levels; some do not achieve even one of these flows. For this reason, a new view may have to be taken of the classic human resources function in many organisations. In the future, the process of Internal Marketing will require an empowered Human Resource capability.

To build its knowledge, Through the Loop awarded a prize to reward Margaret Baker Moss of Kingston University for marketing insight. Her dissertation demonstrates that there are critical values of vision, reward and development that always need to be taken into consideration in terms of Internal Marketing. Potentially, Internal Marketing could have a wide variety of applications yet too few companies would be able to benchmark themselves against the holistic range of these three concepts.

"By ensuring that all members of staff are aware of the corporate vision, it becomes clearer what the organisational goals and priorities are, thus helping to avoid conflict within the organisation. A focus on development can help them to develop the skills and the knowledge that they need. Finally, rewarding them financially through salary packages as well as recognition for their individual and collective contribution towards the corporate strategy means that all three factors can work as a cohesive whole."

Margaret Baker Moss also examined the effectiveness of various types of communications such as awareness programmes, workshops, newsletters and in-house magazines and incentives and their usefulness against the vision, development and reward parameters. This sets up a construct for the effectiveness and possible measurement of Internal Marketing.

The difference between formal and informal communications processes also need to be understood and utilised.

Just consider what happens if the internal and external faces of the brand are not co-ordinated.

• Bad ground and in-flight service can totally alter your perception of a "customer friendly" airline. The delivery does not live up to the brand offer.

A very recent example of merging the two power telecom brands of AT&T and BT was apparently enhanced by a joint internal culture exercise. This helped the two managements evolve a new possible culture for the merged international operations. Similar processes would have been invoked after the creation of Diageo and more recently, UBS.

There has been much criticism and often splintering of Human Resources in the past and with the new focus on Internal Marketing, a considerable transformation will be needed. Earlier this year, Dave Ulrich in ‘A New Mandate for Human Resources’ (Harvard Business Review) January 1998 stated that HR could deliver operational excellence in four ways:

• HR should become a partner with senior management in strategy execution.

This restaging requires HR to have new tools and tactics available to them in order that they can enhance the process of Internal Marketing. Too often, HR executives remain peripheral to the organisation.

Through the Loop has been talking to a number of partners who are leading various processes of Internal Marketing in different ways. For example, it is now possible to undertake staff surveys either using the Internet as a platform or via an Intranet. Working with Quantime gives a very efficient delivery mechanism for achieving staff interviews at all kinds of levels of seniority with a level of confidentiality. Another of our partners, The Maloney Group, based in the US, has been practising Inside-Out Marketing™ since the early 1990s to increase its clients’ reputations and revenues.

It is essential that any brand and business building effort for service and creative organisations starts by identifying the gaps between what the staff believes the essence of the business is, versus what management wants it to be, versus how clients and customers presently see the organisation. This process helps drive better internal marketing. The programmes aim literally at the heart-they start inside with a client’s top management and staff.

Through the Loop is now collecting examples of best practice in Internal Marketing to build on its branding best practice work. A survey has already been implemented of UK company practices in this area and is expected to be completed in December 1998.

Some hypotheses about Internal Marketing:

• Internal Marketing can help to establish an important framework of legitimacy for new directions and transformations.

At the end of the 1990s, marketing attention is becoming more introspective within the organisation because the synchronisation of the external and internal expression of the brand is vital. Good examples of such synchronisation prove to be comparatively rare: DisneyWorld, Nordstrom, some parts of the Virgin organisation, at one time, British Airways and also First Direct. Internal Marketing needs very strong discipline empowering staff in new directions using the construct of Vision, Reward and Development. There needs to be an understanding of the gaps in achievement.

However, there is a very strong "health risk" involved and that is the following:

Do not undertake an internal communications review if you have no intention of following the results through with your staff. There is no point in consultation if there is no follow through from senior management. How have you rewarded your staff recently? Would they understand what the company vision is?

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© Carol Samms / Through the Loop Consulting Ltd 1998-2000