Internal

customer
satisfaction
leads to
External
Internal customer satisfaction leads to
External customer satisfaction

customer’s
satisfaction

Submitted To: Mr. Imran Khan

Subject: Seminar in Marketing

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Internal customer satisfaction leads to
External customer satisfaction

Submitted By

Name Roll #

Umer Farooq 334

Sub campus Bahawal Nagar

Table of contents.

Sr No. Contents Page No.

i Introduction 04

ii Why internal customers are important? 05

iii How Poor Internal Customer Service Affects External 06

Customers?

iv Defining customer satisfaction. 07

v Identifying Internal Customers and Measuring Their 08

Satisfaction.

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Internal customer satisfaction leads to
External customer satisfaction
Vi Internal Customer Satisfaction. 09

Vii Internal Customer Satisfaction Process. 11

Viii Internal and External Customer Service. 11

Ix The Link Between Internal Customer Service 14

and Customer Loyalty.

x Catering to Customer Service Needs. 14

Xi Contributing factors to satisfaction. 16

Xii How to Keep Internal Customers Happy and Satisfied? 16

xiii 17
Tips for building relationships with employees.

INTRODUCTION
First of all we must define the internal and external customers before discussing
the relationship between the internal customers’ satisfaction and external
customer satisfaction.

Internal Customers:
Internal customer is a technical term used in management science popularized
by Joseph M. Juran.

He defined internal and external customers as anyone affected by the product or

by the process used to produce the product, in the context of quality
management. Internal customers may play the role as supplier, processor, and
customer in the sequence of product development.

An internal customer or internal service provider can be anyone in the

organization. An internal customer can be a co-worker, another department, or a

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Internal customer satisfaction leads to
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distributor who depends upon us to provide products or services which in turn are
utilized to create a deliverable for the external customer. In general, internal
customers don't have a choice. For example, if the sales department doesn't like
accounting's credit policies, they can't fire that department and hire another.

He claimed that the organization must understand and identify both internal and
external customers and their needs. The organization must focus on its primary
task of satisfying the customer’s requirements and expectations.

If one department, individual or process within an organization supplies another

such within the same organization with goods, information or services then the
latter is described as the internal customer of the former.

For example, a dispatch department may be the internal customer of a packing

department, which in turn may be the internal customer of the manufacturing
process. Juran advocated 'exceeding the customer's expectations.'

External Customers:

External customers are those persons who come from the outside to fulfill their
needs.e.g.the common people

The external customer is someone who signs a check, pays our employer, and
ultimately makes our paycheck possible. External customers have choice, and if
they don't like your product or service can take their business elsewhere

WHY INTERNAL CUSTOMERS ARE IMPORTANT?

Why they are so important?
Because how we service each other is how we probably service our customers.

What are the benefits of selling (ourselves) and servicing our fellow
employees (our internal customers?)

1. First of all they are they fundamental asset of an organization, without

which an organization can’t run its business

2. Servicing the internal customer creates opportunities to expand our

network of people available to assist us in a variety of situations. The more
you meet with fellow employees or talk to them, the more you are aware of
how they can assist you and in turn assist the customer. You have better
opportunities for advancement because your interest in others increases
your knowledge of your institution. You provide quality service on a
consistent basis to all customers- internal or external!

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Internal customer satisfaction leads to
External customer satisfaction
And if we talk in terms of satisfied internal customers than they become important
because.

1. Unhappy employees are less productive and more likely to have higher
absence rates
2. Satisfied employees are more productive, innovative, and loyal
3. Increases in job satisfaction lead to increases in employee morale, which
lead to increased employee productivity
4. Employee satisfaction leads to customer retention
5. Between 40 and 80 percent of customer satisfaction and loyalty is
determined by the customer-employee relationship, depending upon the
industry and market segment.

Internal customer service is recognizing that everyone has a role in servicing the
needs of the external customer. One branch customer service representative
stated how she feels about internal customers: "I need the expertise of our back
office people. I realize that if I provide the necessary information, they can cut
through many of the obstacles and solve customer problems quickly. I've
developed a relationship with them, and call them as needed. And, when the
problem is solved, I call to thank them. Also, our office sends cards to back office
departments to show our appreciation. I think it is that recognition that lets them
know they helped us and the customer is satisfied."

There is a bonus to mutual appreciation between front line and operations. Your
customers will recognize the fact that yours is a happy, cooperative organization,
and the benefit will be quality customer service. You just can't keep that kind of
information secret!

How Poor Internal Customer Service Affects External

Customers
While companies focus thousands of dollars on external customer service in
hopes of wooing and retaining customers, little attention is being paid to the
effect poor internal customer service has on overall customer satisfaction. It all
starts within your organization! Sooner or later the ripple effect reaches your
external customers. To really walk your service talk, your commitment to internal
customer service must match your company's external focus on customer care.

When we think of customer service we think of staff serving customers over a

counter or over the phone. But customer service occurs within your organization
as well. How well does staff serve its internal customers: other departments, its
management, vendors and consultants? Believe it or not, it all counts. Internal
customer service refers to service directed to others within your organization. It
refers to your level of responsiveness, quality, communication, teamwork and
morale.

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Internal customer satisfaction leads to
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We can define Internal Customer Service as effectively serving other

departments within your organization. How well are you providing other
departments with service, products or information to help them do their jobs?
How well are you listening to and understanding their concerns? How well are
you solving problems for each other to help your organization succeed?

It effects in following ways….

1. It’s a general phenomenon that being an employee you can only satisfy
your customer when you are being satisfied by the organization, otherwise
in case of dissatisfaction surely you will not treat your customers in well
manner and this can result in external customer dissatisfaction.

2. It can result in absenteeism, which will affect the service level and will
ultimately results in external customer satisfaction.

3. It can also result in employee’s turnover, which as a result can affect the
service level of the organization, and hence can dissatisfy the external
customers eventually.

Defining customer satisfaction

Because the concept of customer satisfaction is new to many companies, it's
important to be clear on exactly what's meant by the term.

Customer satisfaction is the state of mind that customers have about a company
when their expectations have been met or exceeded over the lifetime of the
product or service. The achievement of customer satisfaction leads to company
loyalty and product repurchase. There are some important implications of this
definition:

Because customer satisfaction is a subjective, non quantitative state,

measurement won't be exact and will require sampling and statistical analysis.

Customer satisfaction measurement must be undertaken with an

understanding of the gap between customer expectations and attribute
performance perceptions.

There should be some connection between customer satisfaction

measurement and bottom-line results.

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Internal customer satisfaction leads to
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"Satisfaction" itself can refer to a number of different facts of the relationship with
a customer. For example, it can refer to any or all of the following:

Satisfaction with the quality of a particular product or service

Satisfaction with an ongoing business relationship

Satisfaction with the price-performance ratio of a product or service

Satisfaction because a product/service met or exceeded the customer's

expectations

Customer Satisfaction Measurement Facts

• A 5-percent increase in loyalty can increase profits by 25%-85%.
• A very satisfied customer is nearly six times more likely to be loyal and to
repurchase and/or recommend your product than is a customer who is just
satisfied.
• Only 4 percent of dissatisfied customers will complain.
• The average customer with a problem eventually tells nine other people.
• Satisfied customers tell five other people about their good treatment.

Identifying Internal Customers and Measuring Their

Satisfaction
Satisfying customers could be described as a company's ability to generate
genuine teamwork among all departments in the organization: sales, marketing,
credit and receivables, manufacturing, distribution, packing and shipping, quality,

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production planning, etc.; and to instill in every individual the constant awareness
that customer service is everyone's business.

This description emphasizes the importance of customer service as an

organizational responsibility. However, too often, a single department in a
vertically structured organization is held accountable for apparent customer
service failures that, for the most part, originate outside that department's
responsibility and are beyond its control.

Deductions and disputes are prime examples of costly process problems within a
company that could often be avoided or at least, the resolution could be
hastened, through better customer service or communication.

A key premise in customer satisfaction understands the needs and meeting, or

exceeding, the expectations of customers. Furthermore, this is done while
optimally using resources. While most companies have developed strategies to
improve quality and external customer service, internal customer satisfaction is a
much neglected component of quality improvement. To this end, it is important to
emphasize that total customer satisfaction can be attained only if all employees,
devoted to external customer satisfaction, can work together and assist each
other to achieve the common objective. In this case, each person must improve
what is around them and look for ways to satisfy the requirements of others in the
organization efficiently. This requires a climate that encourages and supports
teamwork in addition to the promotion of a general ethic of continuous
improvement. The basis of this stems from the fact that there cannot be total
customer service unless all employees are supporting each other and working
together toward common goals. In short, total customer service means meeting
the needs and expectations of both internal and external customers.

Internal Customer Satisfaction

Customer is the king; this is all the more apt for today's business environment
where, all other factors remaining more or less constant, it is the value addition to
the customer that is making all the difference.

Customer satisfaction depends on the performance relative to expectations.

Customer satisfaction survey is the process to monitor the satisfaction quotient of

their people. In internal satisfaction surveys therefore tracks the return on your
investments in keeping your people happy, high salaries, a quality culture, a
healthy work environment.

Last, but not the least internal customer satisfaction survey helps in finding the
critical areas, which need further improvement.

Need of Internal Customer Satisfaction Survey arises due to following reasons.

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• Rapidly growing organization.

• High or growing turnover rate.

• Excessive rumor's

• Highly competitive industry.

• Planned and recent organizational changes.

BENEFITS OF AN INTERNAL CUSTOMER SATISFACTION SURVEY

• It creates better teamwork and much improved work process.

• It leads to higher output and superior quality product.

• It decreases the turnover.

• Reduced overheads, and increase customer satisfaction level's inter

departmental.

• It enhances communication and hence helped in team building, hence

there is less wasted effort caused by lack of common purpose and poor
communication.

• A good employee feedback survey improves employee attitude and

boosts morals.

INTERNAL CUSTOMER-SUPPLIER RELATIONSHIP

In an organization, from procuring an order to delivering the final product, a

series of activities takes place. There are different deptts. To which these
activities are assigned e.g. Raw material for production is purchased by one
deptt. And supplied to other deptt. Where the production initiates. Thus every
deptt. Play an important role of a customer and supplier as well.

The importance of a customer is well known from the maxim, “Customer is

the king”. Earlier, organizational administrators concentrated only on the
satisfaction of external customers i.e. the target market. But now it is being
realized that if the internal customer is satisfied the quality as well as the quantity
is also appreciable. Higher the customer satisfaction index, higher will be the

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quality of the production. This results in the satisfaction of external customers
and ultimately brings profits & prosperity to the organization. It can benefit the
organization in following ways:-

1) There will be less employee turnover.

2) Optimum utilization of available resources will take place.

3) High job satisfaction and feeling of belongingness in employees.

4) Qualitative product.

5) Least conflicts in the departments.

6) Good reputation in the market and many more benefits can be accrued.

Thus, every deptt. Should ensure that the customer deptt. is satisfied with the
product and services provided by it as it will result into an overall improvement of
the organization.

Internal Customer Satisfaction Process

It consists of the following major steps.

1. Identify internal customers.

2. Evaluate the role of the credit, collection and accounts receivables

administration (as a functional group) within the organization (self
evaluation).

3. Determine actual performance level through survey of internal customers.

4. Determine the level of satisfaction required within the organization through

survey of internal customers.

5. Measure satisfaction level of internal customer with respect to needs and

expectations.

6. Identify improvement opportunities in work process required.

7. Determine process potential and develop action plans for better service.

8. Monitor, control and update.

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Internal and External Customer Service

Why is this important?
It is the fastest and best way to increase sales and productivity.

What’s in it for you?

You will put more money in the bank, get new customers automatically, be
admired by the competition, and have the highest possible productivity.

External customer service

Customer loyalty is created by strong relationships where the customer feels

special and important. People buy products and services on an emotional feeling.

The feeling can be to feel good, safe, effective and even to increase their
confidence. Customers buy a product for the same reason. If the product or
service gives them a good feeling, they will continue to buy that over and over
again. But, if the company that sells that product doesn't make them feel
important or special, they will buy it somewhere else.

The customer is your paycheck!

This is what most companies fail to realize! The customer pays for the entire
staff’s living, car payments, vacations, food, etc. The employees think that the
money they make comes from the company. Yes, someone at the company
signs their checks, but the money comes from the customers. If the staff begins
to understand this, they will treat every single customer differently. They would
make sure that the customer service and customer relations would be on top,
always.

Let’s look at how we treat our guests at home. We dress nice, plan and prepare
for their arrival, set the table with the nicest chinaware, glasses, and silverware,
etc. When our guests arrive, we smile and say welcome. We compliment them
on their choice of clothing, and our highest priority is that they will have a great
time. When they leave we thank them for visiting, and we don’t mind if they tell
some friends what a great time they had at our house.

Imagine if you and your associates put the same effort into every customer that
walks in your front door. After all it is the customers that make it possible for you
to invite your friends into your home. It is the customers that pay for everything
you own and will buy in the future. Imagine that every customer will feel the same
way your friends do when they leave your house after a dinner or a party. Do you
think they will come back over and over again? Do you think they will recommend
you and refer you to everybody they know that can use your products or
services?

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Customers act according to service and relations.
Let’s look at how customers really act according to the experiences they get
when buying from you. As you can see, satisfied customers are not loyal.
Satisfied customers don’t refer you to other customers like loyal customers do.
Which would you rather have, 100 satisfied customers or 100 loyal customers?

Internal Customer service

Your employees and coworkers are your internal customers and the care for
them is actually the same as for your external customers.
Their loyalty and productivity also depend on how they feel at work. Do they feel
important and special? Do they get attention for their ideas and work effort?
Just like customers, employees also perform according to relations and
environment at their work. What kind of employees would you rather have?

Employee is: Productivity Reliability? Keeps job?

Loyal WOW! Extremely high! Extremely high! Always!
Very satisfied ? ? Possibly
Satisfied ? ? Maybe, if convenient
Neither ? ? Probably not
Unhappy ? ? No
Very unhappy ? ? No way!
Pissed off ? ? Guess!

If you give more than expected you will get more than expected in return.
To get loyal employees, you need to go beyond their expectations, just like your
customers. They expect you to provide them with proper training to be able to
perform their job duties. What if you go far beyond that? What would happen if
you gave them training on personal growth? I am talking about growth in their
careers and in their personal lives as well.

Can you imagine what an impact it would make on each employee, if you taught
them the habits of successful people? Why are some people successful and
others not? It’s not that they are smarter or better than others. They’ve just
learned how to develop the habits and attitudes that are necessary to be
productive at work and to have a productive and happy life. The company that
will provide this for their employees will have the most loyal staff and have people
standing in line to work there. Imagine what that will do for the marketing of your
company.
Today’s companies are facing their toughest competition ever. These companies
can outdo their competition if they can move from product and sales philosophy
to a marketing philosophy. We spell out in detail how companies can go about
winning customers and outperforming competitors. The answer lies in doing a
better job of meeting and satisfying customers needs. Only customer-centered

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companies are adept at building customers, not just building product. They are
skilled in market engineering, not just product engineering.

Too many companies think that it is the marketing/sales department’s job to

procure customers. If that department cannot, the company draws the conclusion
that its marketing people aren’t very good. But in fact, marketing is only one
factor in attracting and keeping customers. The best marketing department in the
world cannot spell products that are poorly made or fail to meet anyone’s need.
The marketing department can be effective only in companies whose various
departments and employees have designed and implemented a competitively
superior customer value-delivery system.

Although the customer oriented firms seek to create high customer satisfaction,
its main goal is to maximize customer satisfaction, first the company can
increase customer satisfaction by lowering its prices, but results may be lower
profits second the company might be able to increase prices. Third the company
has many stake-holders including employees, dealers, suppliers and stock
holders spending more to increase customer satisfaction might divert funds from
increasing the satisfaction of other partner. Estimate the company must operate
on the philosophy that it is trying to deliver a high level of satisfaction to the other
stake-holder within the constrains of its resources. From the past studies of last
three decades we observed that the company’s first task is to create and satisfy
customers. But today’s customers face a vast array of product and brand choice
prices and suppliers.

It is generally believed that customers estimate which offer will deliver the most
value customers are like value maximizes, within the bounds of search costs and
limited knowledge, mobility income, they form an expectation of value and act on
it, whether or not the offer lives up to the value expectations affects customer’s
satisfaction and their repurchase probability.

The Link between Internal Customer Service and

Customer Loyalty
There is compelling evidence that a strong connection between internal customer
Service and customer loyalty exists. What was once described as a "mixed,
complex relationship" between internal customer service and customer loyalty is
now seen as a much clearer and reliable causal construct. "The basic
assumption is that if everybody strives to provide their ‘internal customer’ with
better service, then the end customer will receive higher quality service," has now
been empirically validated.
The Strategy to Results Equation Includes Internal Customer Service
The Strategy to Results approach to improve external customer loyalty must
include an internal customer service component. Why? Research has proven
that employees will only provide superior service to each other and to external
customers when they receive the same sort of service in return.
Implementation of a Comprehensive Change Initiative

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Improving internal customer service is a major change initiative. In order to be
successful, it must include aligning senior management, re-organizing and
refining systems, implementing customer service training, and service
guarantees.
Employees function as Internal Customers and Service Chain Partners
Measuring the Impact of Internal Customer Service on External Customer Loyalty
If a claim is made that improving internal customer service will result in increased
levels of customer loyalty empirical evidence should also support it. The
measurement process that evaluates the impact of internal customer service
improvement normally involves a number of methodologies including:
• Reviewing existing information
• Gathering new information as needed
• Analyzing data to answer key decision-maker questions
• Creating a credible findings report

Catering to Customer Service Needs

Here are five tips for your organization to help strengthen its internal customer
service orientation.

1. Employees should never complain within earshot of customers. It gives them

the impression your company isn't well run, shaking their confidence in you.

2. Employees should never complain to customers about other department's

employees. Who wants to patronize a company whose people don't get along
with each other?

3. Employees at every level should strive to build bridges between departments.

This can be done through cross training, joint picnics, parties or off-sites, or
creative gatherings, as well as day-to-day niceties.

4. Utilize post mortems after joint projects so everyone can learn from the
experience. You can mend fences and gain new understandings when everyone
reviews what went right...or wrong. By doing so after the project the immediate
pressure is off, yet stronger bonds can be forged while the experience is fresh in
peoples' minds. Not doing so can result in lingering animosities that will
exacerbate future collaborations.

5. Let your employees become "Customer for a Day" to experience firsthand

what your customers experience when doing business with you.

Congratulations on turning customer service inside out! By improving internal

customer service you have just enhanced the customer service your external
customers receive. You're walking your talk regarding customer service.

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Types of marketing to serve the relevant customers

To serve a final customer first of all a company has to satisfy his employees. If
employees are satisfied then they will ultimately satisfy the final customer. Three
types of marketing arise. These are a follows:-

1) Internal marketing:

It is defined as when company communicates its policies to the employees. In

this understands their employees & provides good working condition,
compensation and incentives so as to satisfy their employees. Company satisfies
their employees because they are the person in touch with the final users.

2) External marketing:

When company communicates with its final end user regarding the product
complaints & suggestions so as to satisfy them.

3) Interactive marketing:

In this, employees communicate company product to its final end users

What steps can I take to improve my customer satisfaction system?

Contributing factors to satisfaction

With that said, let’s take a look at the factors which contribute to employee
satisfaction. Specifics has developed, and for over thirteen years has been using
an employee satisfaction questionnaire with questions centered around ten broad
“human resources” categories:

• Communication
• Empowerment
• Performance
• Support
• Development
• Recognition
• Compensation
• Benefits
• Client / Customer Relations
• Overall Satisfaction.

How to Keep Internal Customers Happy and Satisfied

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Keeping your internal customers satisfied is the key to creating loyal external
customers

When you think of a business, it is really composed of many customers and

suppliers internally within the organization itself. In a manufacturing company for
example, the sales department usually starts the process by getting an order
from a customer. They pass this order to the Purchasing department, who sends
it to the Engineering department and from there it goes to Manufacturing and
then is passed on to Shipping. Each of these departments has certain things they
need from the prior department or “internal supplier”. Therefore each department
is a supplier and a customer to each other. There is a domino effect between
internal customer satisfaction and external customer satisfaction. In order to
produce happy external customers (the ones who buy your product/service), it is
important and imperative to build customer satisfaction between the internal
customers.
Steps to build internal customer Satisfaction
How do you do this? It consists of five simple steps:

1. Have each department identify who is their internal customer and who is their
internal supplier/s.
2. Request each department to talk to their internal customers and ask them
specifically what is needed for them to do their jobs that they provide.
3. Have them ask these internal customers what they currently do that
disappoints them in delivering what they provide.
4. Request they ask these internal customers what they could do that would
delight them and make their jobs easier.
5. Document all of the above.

Keeping internal customers satisfied and happy is the first step towards creating
external customer loyalty. According to the Service Profit Chain (developed by
the Harvard Business School) this is where it begins. Yet, from what I’ve seen,
there are so few businesses that look at their organization as a microcosm of
many customers and suppliers within the overall company and within

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departments themselves. For instance, the telephone receptionist is a supplier to
most every individual and department delivering the product of calls or
messages.

It is a like a chain, each link is important to the overall strength of the chain.
When there is a broken link, the whole organization is weakened. When one
internal department supplier is always late, delivers bad or wrong output, acts
discourteously and disrespectfully to the next department – it makes it much
more difficult for the other departments to ensure the final external customer is
happy and satisfied. This is what creates the tension and stress that frustrates
employees and causes their job dissatisfaction. Customer service must become
a requirement for all employees within an organization, not just those that deal
with external customers.

Tips for building relationships with employees

So what can you – as a progressive leader - take from the above example?
Below are few tips that can help you out on building excellent relationships with
your employees and making sure that they will want to give all they can.

Consider your employees as your customers. Too often employers forget

this. Without them you are not going to succeed. This is your first step: to
acknowledge them as the most valuable members of the team.

Be available and present for them. You would always make yourself available
to your clients… do the same for your employees. They need to know that you
are there for them, and that everyone is playing on one team.

Be willing to share the company’s goodies. Does your office purchase holiday
gifts? Purchase additional items for your employees. If you – as a manger –
receive a gift from a vendor, share it with your team. It is not the actual item that
has so much value but your willingness to treat your internal customers with
kindness and respect.
Exceed your employees’ expectations. You can create great relationships if
you focus on this. Do more for them than it is expected. Take them out for dinner
or lunch once a month just as a gesture of team spirit. Offer unexpected theater
tickets or restaurant gift certificates for those who have few or no sick days within
a period of time. Host a company “play day” at a local park. The possibilities are
wide open… the results are long-lasting.

Communicate the company’s direction. Keeping employees informed offers

them a feeling of empowerment. It cements the fact that they ARE part of the
team. It also helps with aligning individual goals with those of the organization.
Take time to provide detailed information about the business’s future and your
internal customer’s place in it.

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Follow-up and ask for their feedback. Just as you ask for feedback from and
follow up with your external customers, be sure implement open communications
between you and your team. When you involve employees in the daily activities
of the organization, they participate more, volunteer more and they take
ownership more quickly.

Say thank you. Can you imagine a transaction that takes place with an external
customer where ‘thank you’ is never said? You simply wouldn’t tolerate that for
long. The same applies to internal customers. When a project is finished… when
a report is completed… at every opportunity, say thank you.

While internal customer service programs may take additional time and money,
the company-wide results will far surpass the expenses. You will soon find
yourself surrounded by those who are willing – and, yes, even excited – to work
for your firm.

Supporting Processes for Internal customer satisfaction

Sub processes support the employees who produce and deliver products or
services. Support processes include human resources, facility management,
technology service and internal marketing.

Human resource support includes facilitating the selection, development and

motivation of employees within the organization. First, employees need to
understand their role in the work system and how the work they perform is
aligned to serve others in the organization. The development of employees
involves learning new skills and ways to prepare themselves for tomorrow's
responsibilities. The human resource function should also support high
performance through compensation and recognition. Employees need to be
encouraged to problem-solve at the source, be innovative and take reasonable
risks to achieve company goals.

Facility management is concerned with not only the protection of the company's
assets; its highest priority is to the health and safety of the employees. In addition
to the obvious safety precautions, a careful analysis of ergonomics ensures that
the workplace is suitable for the work being done. The physical work environment
affects both employee productivity and well-being. Managing the environment is
an important part of enabling employees to meet and exceed their work
expectations.

Technology support can make the difference in a company's competitive edge.

Technology can be used to reduce costs and improve information flow and
availability. Standards for data input accuracy and timing of input are part of
making sure employees have what they need to perform their work.

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Performance measurement is integrated with prioritizing work. It identifies and
measures those activities that are important to serving customers, whether
internal or external. There is always the old adage, "what gets measured gets
done." Measures help management manage by fact. Production may have
performance goals such as the completion of work orders on time. Purchasing
may be measured on frequency or percent of materials out of stock. Questions
like, "What does an employee do to support product and/or service delivery?" or
"What deliverables do they have?" help identify what to measure. Measurements
help employees focus on the priorities and serving their internal customers.

Improvement strategies may include sharing of successful strategies across

the company, recognition and reward programs for innovation, information from
customers of the internal processes, use of alternative technology and process
analysis. Some firms may require a redesign of the complete system to achieve
effective internal customer service.

Established internal processes, training, measuring performance and

improvement strategies are all important to orienting and expecting your people
to recognize their internal customers. They help build satisfaction with the work
environment and loyalty to the firm. When employees recognize who they serve
within the organization, and treat them as a high priority like an external customer
would be, not only does performance improve, employee satisfaction and loyalty
increase.

Internal Marketing
The aim of internal marketing on a strategic level is the creation of an appropriate
Environment that will support employees' interest in external customer
satisfaction. It is the application of marketing inside an organization to instill
customer-focused values. As such, it joins marketing with human resources to
attract, motivate and retain employees, with an emphasis on getting employee
commitment to provide customer satisfaction and achieve organizational goals.
Internal marketing is for the care of both customers and employees. It is based
on the relationship between employee satisfaction and customer satisfaction
(take care of the employees, and they'll take care of the customers). It has been
proposed as a way of increasing lower level commitment to corporate strategies
and improving organizational integration. Internal marketing can be used to
increase employee involvement in reaching decision, making commitments and
taking action.
Employees are a particularly important participant in the formulation of the image
Those customers get in relation to the offered service. External customer
satisfaction can not be achieved without the fundamental contribution of the
customer- contact employees who provide the service. The front-line employees
of the retail store interact with the majority of customers and generally handle a
wide range of customer transactions. Grönroos mentioned that the emerging
importance of services in almost every business has led to the recognition that
well-trained and service- oriented employees are the most important resource of

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Internal customer satisfaction leads to
External customer satisfaction
a company, rather than raw materials, production technology or the actual
products. Since the employees meet the external customers and responsible for
the offered service quality, they impact heavily on how the organization is viewed
by the customers. It further states that the focus upon employee satisfaction in
Internal marketing is due to the fact that in the marketing of services a large part
of what customers ask for is in fact labor, or human acts of performance.
Internal Marketing comes from the concept of services marketing. It is viewing
Employees as internal customers and jobs as internal products that satisfy the
needs and wants of these internal customers while addressing the objectives of
the firm.
In a definition of internal marketing this fact gets illustrated: “Internal marketing
is attracting, developing, motivating, and retaining qualified employees through
job products that satisfy their needs. Internal Marketing is the philosophy of
treating employees as customers…and it is the strategy of shaping job-products
to fit human needs”. Kotler explains that internal marketing is more important
than conventional external marketing. The key to have satisfied customers lies in
having satisfied employees. The overall purpose of internal marketing is
explained by Grönroos in three steps:

• To attract appropriate employees as contact persons and in management

• positions
• To retain good and appropriate employees
• And, to influence and motivate employees in order to make them customer
oriented, marketing oriented and thereby make an effort as good as possible
in the interactive marketing process.

Conclusion
Employee satisfaction has often been referred to as job satisfaction.
Unfortunately, the reality shows that a common phenomenon in many retail
organizations is to fill up their customer contact positions with persons willing, at
least temporarily, to work for minimum wages. In retail sector it is of prime
importance to train and retain good people since good employees that offer high
quality service is one way of distinguishing one retail store from competitors. In
fact, a growing body of empirical evidence suggests that there is a direct
relationship between a firm's financial success and its commitment to internal
marketing practices that treat employees as assets.
Nearly 25 years after the development of internal marketing concept, it is not
being recognized and implemented by managers to the extent it deserves. In
order to achieve this goal early researchers in the field argued that the focus
should be upon the issue of employee motivation and satisfaction for achieving
the satisfaction of their external or final customers.

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