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Tony Proctor

is a professor at the
Internal marketing and its basis
University of Chester Business
School. He has many years of for sound customer relationship
experience researching and
teaching in higher education management
and is the author of several
books on marketing and on
creative problem solving in
Tony Proctor
management. His work has
also been published widely in
scholarly journals. While his
initial working experiences Abstract
were in industry and Healthcare organisations are continually under pressure to improve
commerce, in recent years his the way in which they operate. The use of modern marketing
teaching and research
methods both internally and externally within an organisation can
interests have been in
organisation and management help to bring this about. The paper argues that internal marketing
in the public sector. In this is a way of improving customer focus within an organisation and
connection, he has been paving the way for a system of good customer relationship
actively engaged in involving
management (CRM). The latter is seen as the mechanism for
practitioners to think and
write about their experiences developing a quality service to customers. The paper indicates ways
with marketing concepts in in which internal marketing can be implemented in an organisation.
their respective organisations. The quality of a service is identified as a key element in creating
customer satisfaction and this is reflected in the manner in which
Keywords: internal marketing,
the service is delivered as well as in the nature of the service itself.
The paper presents a descriptive model of service quality in
healthcare, highlighting various elements of service quality and
delivery. The fact that service delivery may be fragmented across the
internal departments and functions of an organisation and even
involve third parties offers a challenge to providing a seamless
and efficient service. Current and intended use of information
technology expects to meet these challenges by providing an
efficient and effective CRM system.

The American Association of Marketing1 defines marketing as the
activity, set of organisations and processes for creating, communicating,
delivering and exchanging offerings that have value for customers,
clients, partners and society at large. Another way of putting this is to
conceptualise marketing as the management process responsible for
identifying, anticipating and satisfying stakeholder requirements and
in so doing serving to facilitate the achievement of the organisation’s
objectives. Both of these definitions explain the essence of the
Tony Proctor
marketing concept.
University of Chester It was at one time argued that marketing was not appropriate in the
Business School public sector because the concern is usually to ration resources rather
Parkgate Rd
Chester, CH4 1BJ than generate greater demand.2 While this is probably true today with
UK respect to some services, it is not the case for all services. What is more,
Email: t.proctor@chester.ac.uk the resources available within the public sector are limited, and as such

256 © W. S. Maney & Son Ltd. 2010. Journal of Management & Marketing in Healthcare. VOL. 3 NO. 4. PP 256–263. DECEMBER 2010
DOI: 10.1179/175330310X12918040319658
Internal marketing and its basis for sound customer relationship management

there is arguably a need to target those in greatest need. Awareness

creation campaigns are required to ensure that those in greatest need are
informed of relevant services from which they can benefit. Attitude and
behaviour change are also required among those whose health is at risk
as a result of their style of living if long-term health problems are to be
avoided. The emphasis therefore has to be on targeting of hard-to-reach
groups within communities. For some organisations, marketing may be a
relatively new concept, derived from the need to engage in a competitive
environment. However, marketing is not something practised only in the
commercial profit-making sector; it is something which can be readily
espoused by non-profit making organisations and the public sector.3
Part privatisation of the health service in the UK certainly opens up
the way for marketing activities, although there is an important role for
marketing even where privatisation is not practised. It would appear that
becoming a hospital trust, for example, allows greater financial freedom
and the opportunity to develop more services for the benefit of patients.
In order to compete in an increasingly competitive marketplace, a
hospital trust can benefit from a down-to-business approach to
marketing. Such a businesslike approach may be driven by various policy
initiatives, such as patient choice, payment by results, practice-based
commissioning, plurality and competition. Arguably, this will enable the
trust to deliver better value for money while satisfying patient needs and
wants. Of course, this means that hospital trusts and other organisations
following a like course will require the necessary skills to do this.

Internal marketing
The successful operation of an organisation is very much influenced by
the staff it employs. The idea behind the concept of internal marketing is
that an organisation’s staff is the market of first call for any organisation.
Internal marketing aims to produce motivated and customer-conscious
personnel at every level in the organisation. The argument for internal
marketing is that both employees and customers should be treated with
equal importance when setting and pursuing organisational objectives.
Internal marketing should be undertaken to inform employees about the
organisation’s current and planned marketing activities and how they can
play a leading role in ensuring their successful implementation. It is of
critical importance to gain internal understanding and commitment to the
organisation and what it is trying to achieve. This should precede any
attempt to market services or products to external customers as internal
marketing can be considered a prerequisite for successful external
marketing. But any marketing activity involves exchange and
implementation of the marketing concept. It is necessary for the
organisation to try to satisfy the needs and wants of its staff, and this will
be a constituent element of the exchange process. In return for becoming
customer-focused in the way they conduct the affairs of the organisation,
the staff will expect the organisation to satisfy their own wants and needs.
In order for internal marketing to succeed, the organisational
culture needs to be aligned with the organisation’s vision statement.

© W. S. Maney & Son Ltd. 2010. Journal of Management & Marketing in Healthcare. VOL. 3 NO. 4. PP 256–263. DECEMBER 2010 257

To successfully integrate any management philosophy into the

organisational culture, management must show that it is aware that the
buoyancy of the enterprise depends on the degree to which core groups
of employees subscribe to and share a common set of belief and values.
The integrative elements of such an inner-directed vision include the
positioning of a service concept in the mind of staff, which it is hoped
will lead to low staff turnover, low training costs, and the opportunity
to develop shared goals and values.4
Implementing a programme of internal marketing requires both
imagination and considerable effort on the part of the organisation.
Ways of implementing internal marketing in an organisation include:

• suitable training to enable staff to fulfil their organisational roles and

• ensuring that employees are informed regarding the organisation’s
mission and their role within it;
• ensuring that the internal information and communications channels
are operating effectively in marketing ideas and services internally
within the organisation;
• undertaking regular surveys that assess internal customer
expectations and satisfaction levels;
• auditing employer–employee interactions;
• using marketing tools and concepts (eg segmentation) internally with
employees when trying to assess their wants and needs;
• encouraging managers to understand the attitudes, know-how and
skills of their employees — and to participate themselves in any
employee development strategy;
• wherever possible, creating an internal environment which enhances
employee–customer interaction;
• encouraging the establishment of an open information and open-door
policy to improve interpersonal interactive communication;
• using newsletters, videos on the intranet, etc to provide employees
with helpful information;
• initiating a programme of seminars to explain important
organisational issues to employees;
• explaining to staff ‘why they should do things’ as well as ‘how they
should do things’;
• showing employees how their work contributes to the firm and to that
of other departments;
• keeping employees informed of new developments within the
• informing employees of how management views them;
• getting employees to try out new ideas in a risk-free environment;
• encouraging employees to use quality management techniques;
• establishing a network service which answers employees’ questions,
takes notice of their complaints, remedies situation, and alerts top-
level management to potential trouble-spots in employee concerns;
• using staff manuals, the intranet, bulletin boards and meetings to
disseminate knowledge about policies, plans and actions;

258 © W. S. Maney & Son Ltd. 2010. Journal of Management & Marketing in Healthcare. VOL. 3 NO. 4. PP 256–263. DECEMBER 2010
Internal marketing and its basis for sound customer relationship management

• implementing an employees’ suggestions scheme to provide

information which could be used to improve the level of customer
• providing feedback on findings of internal surveys and taking actions
based upon what is learned from internal surveys.

Effective internal marketing paves the way for an effective customer

relationship management (CRM) system.

Customer relationship management

The quality of the service is a key element in creating customer
satisfaction in a service encounter. The quality of a service is reflected in
the courtesy, empathy, competence, responsive, reliability and credibility
of those delivering the service. It is also reinforced by how the service
providers communicate with the customer and the tangible evidence of
the service that the customer is able to perceive. All these aspects of
quality are extremely important in delivering healthcare if a positive
attitude towards the providing organisation is to be achieved in the mind
of the patient/customer. Tangible evidence, reliability and competence
are especially important in the context of healthcare services as they are
inherently linked to notions of cleanliness/bug-free environments and
safe/reliable treatment procedures.
From a marketing and CRM perspective, quality in healthcare is of
paramount importance. It is possible to visualise a healthcare service in
terms of the diagram shown in Figure 1. All of the labels shown in the
figure reflect the quality of a healthcare service that is being delivered
and that need to be addressed when both offering and implementing
the service. In the centre of the concentric ellipses, we find the

Figure 1: The concept of the service — a marketing perspective

© W. S. Maney & Son Ltd. 2010. Journal of Management & Marketing in Healthcare. VOL. 3 NO. 4. PP 256–263. DECEMBER 2010 259

core healthcare benefits. These represent the benefits that the user of the
service may expect to experience. The organisation should see the
service being offered from the position or point of view of the service
user. In this particular context, the service is not the actual treatment
itself, but the benefits it will bring to the customer/patient. In heart-
bypass surgery, for example, the core benefit viewed from the perspective
of the customer/patient is the ability to lead a virtually normal life after
surgery and the prospect of a substantial increase in life-expectancy as
a result of the treatment. Essentially, from the point of view of the
customer/patient, it is the benefits for the user that count, rather than the
actual treatment itself. Hence, when communicating the idea of bypass
surgery to patients, it is important to stress the benefits it will bring for
them and show how people who have undergone such surgery have come
to lead normal lives as a result.
Within the second of the ellipses in Figure 1 the formal service
package is placed. Here we find the ‘quality of the healthcare service
product’. This reflects the various factors discussed above relating to the
delivery of the treatment by the personnel of the organisation —
courtesy, empathy, competence, responsiveness and credibility. Within
this ellipse we also find the treatment success rate — reflecting the
reliability of the service (treatment) — and also information provided,
which reflects the quality of communications between service-provider
staff and the customer/patient. Three other labels are also found in this
ellipse. Price reflects what the customer has to offer in exchange —
suffer or do without in order to benefit from the treatment, which is part
and parcel of the exchange. Special features may include special care
arrangements, use of latest advanced technology, new medicines and
so on. After care may refer to facilities such as hospital clinics to
assess post-operation progress or district nurse services. All of the
items mentioned in this ellipse can be used to good effect when
communicating the quality of the service to patients/customers.
The third and outer ellipse contains labels relating to the augmented
service package. Patient treatment by the service provider relates to the
manner in which the patient/customer is handled or processed when
moving along the pathway through screening, diagnosis, treatment and
after care. Other elements to appear in this ellipse are the physical
surroundings in which treatment or consultation takes place and the
provider’s appearance, manner and attitude. The brand image of the
healthcare producer also appears in the ellipse, and it encapsulates the
whole of the concept of quality expressed by the other elements in
diagram. The brand image of the healthcare provider is a conscious
attempt to project the image of quality. This is achieved both through
the organisational culture underpinning the other labels mentioned and
through marketing communication efforts directed towards
customer/patients and other stakeholders.
Staff who work in healthcare organisations are keen to offer the best
service to customers/patients. However, too often, they may only see
matters from their own perspective and fail to address matters which are
very important from the customer/patient perspective. Clearly, they both

260 © W. S. Maney & Son Ltd. 2010. Journal of Management & Marketing in Healthcare. VOL. 3 NO. 4. PP 256–263. DECEMBER 2010
Internal marketing and its basis for sound customer relationship management

appreciate and understand that the medical treatment is of paramount

importance, but there other aspects of the service delivered which are
important to customers/patients, too. Customers/patients may experience
undue pain and this can sometimes go unattended. They want to know
simple things such as how long they may have to wait for treatment and
how long will it be before they can expect to recover from a treatment.
After treatment, they may be expected to attend as outpatients and need
to know where to find the department that they must attend. In this latter
context, they may need to know where they can park their car and what
change they will require to pay the parking charges. If they are being
dropped off by a carer at, say, a fracture clinic and are unable to walk any
distance, they will want to know how best this can be effected. Indeed,
they may have many seemingly minor questions which have very little to
do with their actual treatment but which to them represent very important
CRM has its roots in relationship marketing, which supports
the proposition that an organisation can improve its standing and
performance by establishing long-term relationships with its customers.5
Proponents of CRM suggest that an organisation can develop a value
creation relationship such that an increase in customer value leads to an
increase in value for the organisation.6 The value for the customers
comes from the provision of goods and services that match their needs.
Research has found that there are significant positive relationships
between internal marketing practices and service quality. In particular,
training programmes have a strong association with service quality.
Consequently, to deliver excellent service to patients, a healthcare
organisation must provide training programmes and establish a clear
vision about service excellence to its service delivery staff.7
CRM simply means managing interactions with customers. Many
organisations in both the public and the private sector are paying
attention to this very important aspect of marketing both their products
and services. In addition, because organisations are often delivering
services across multiple delivery channels (face-to-face, telephone,
internet etc) it is becoming increasingly complex in nature. CRM is
one of the ways in which health organisations can make it easier for
customers/patients to make best use of the services they have to offer. It
does, however, mean that the organisation has to wholeheartedly embrace
the marketing concept, and put the customer or patient’s interests at the
foremost position as far as possible. Of course, one must accept that it
is not always possible to satisfy patient or customer wants/needs when
managing with very scarce resources, but one should try to do so
whenever possible. Where it is not possible, an alternative solution to
the patient/customer’s problems should be offered, or at the very least a
rational explanation as to why their demands cannot be satisfied should
be given. From the point of view of the ‘exchange process’, it should
also be recognised that both the organisation offering the service and the
customer/patient may have multiple demands of each other in order to
facilitate the required transaction, and that the transaction may be based
upon the development of a longer-term relationship rather than a one-off

© W. S. Maney & Son Ltd. 2010. Journal of Management & Marketing in Healthcare. VOL. 3 NO. 4. PP 256–263. DECEMBER 2010 261

encounter. As multiple delivery channels may be used and the nature of

the augmented service may go well beyond the basic treatment itself, the
entire package would be improved if it could be offered in a preferably
seamless and joined-up manner.
Through the use of an efficient CRM system, it can be possible to
offer quality services in a customer-focused and joined-up manner. In the
case of healthcare, however, the situation is complicated by the existence
of primary care trusts as well different types of hospitals. Facilitating a
seamless and joined-up service is thus extremely challenging. In order
to ensure effective CRM, pathways and processes need to be well
understood and defined from end to end. They may involve several
different departments or functions within an organisation and relate to
the front and back office as well as involving external third parties. It
may be necessary to implement alterations to the organisational structure
so that a single point of contact can be made. Of course, it will probably
mean that customer/patient information needs to be held centrally in a
common database, linked up to core systems in the back office to enable
requests to be completed. This, in turn, works towards ensuring that there
is reliable continuity of service between the front and back office.
CRM systems are becoming increasingly computer based. e-CRM,
which includes such things as e-mail, chat rooms, interactive websites
and e-forums,8 has become a focus of attention for promoting CRM.
At the present time, e-CRM is considered an indispensable tool by
many organisations keen to improve value for their organisations and
customers alike.9 However, to date, when reviewing research evaluating
the effectiveness of e-CRM, the findings are inconclusive, with one study
reporting many organisations indicating poor results on 11 different
capabilities (eg customer service, customer data management, etc).10
In theory, websites are an excellent means of communicating with
customers/patients and their partners or other carers. However, two
important matters arise when using e-CRM systems. First, an e-CRM
system will need to be updated and amended regularly. Giving
customers/patients the wrong information is worse than giving them no
information at all. Secondly, there is the question of what needs to be
done in order to update the information on a website. At one end of the
spectrum, this can be a relatively simple matter that hospital staff can
do themselves with a modicum of training. On the other hand, it can
often mean that specialist knowledge is required to change parts of the
website, and this will demand the skills of someone who knows how to
do this. This represents an added expense and a task that cannot always
be done with immediate effect.

The requirements and expectations of patients are ever-changing, and
healthcare services need to respond and anticipate these changes.
Satisfying patients is a complex affair and sometimes it is not possible to
provide the desired level of satisfaction the patient expects. Obstacles to
a customer-oriented approach include political and legislative influences.

262 © W. S. Maney & Son Ltd. 2010. Journal of Management & Marketing in Healthcare. VOL. 3 NO. 4. PP 256–263. DECEMBER 2010
Internal marketing and its basis for sound customer relationship management

These can produce cumbersome bureaucratic processes and limited

availability of resources for marketing and CRM activities. Limited
budgets can nonetheless produce innovative and creative solutions to
marketing issues without requiring expensive assistance from the
private sector.
Traditionally, the public sector has tended to place emphasis on the
way in which services are delivered and not on the needs of the service
user. This approach has required the customer to adapt to the service
rather than the other way around. In addition, patients are not the only
stakeholders in the delivery of healthcare services. As such, there is a
need to ensure that other stakeholder views are considered when
identifying, anticipating and satisfying patients’ requirements.
The establishment and development of good relationships with all
stakeholders is of paramount importance.
Internal marketing aims to make healthcare staff customer-focused,
which in turn will lead to high-quality service delivery. Healthcare
service delivery involves developing and building a relationship with
customers/patients, and the people element in this is important.
Managing these relationships is the function of CRM, while from a
functional point of view, e-CRM is perhaps best equipped to
facilitate information and knowledge transfer between staff and
patients/customers, as well as among staff. All these aspects of healthcare
service delivery need to be integrated and coordinated in such a way as
to ensure the quality of the service provided.

1. American Marketing Association (2007) Available at: http://www.marketingpower.com/
community/ARC/Pages/Additional/Definition/default.aspx (accessed 11 November 2010).
2. Walsh, K. (1991) ‘Citizens and consumers: marketing and public sector management’, Public
Money & Management, Vol. 11, No. 2, pp. 9–16.
3. Sargeant, A. (2005) Marketing Management for Nonprofit Organizations, 2nd edn, Oxford
University Press, Oxford.
4. George, W. R. (1990) ‘Internal marketing and organizational behavior: a partnership in
developing customer-conscious employees at every level’, Journal of Business Research,
Vol. 20, No. 1, pp. 63–70.
5. Boulding, W., Staelin, R., Ehret, M. and Johnston, W. J. (2005) ‘A customer relationship
management roadmap: what is known, potential pitfalls, and where to go’, Journal of Marketing,
Vol. 69, No. 4, pp. 155–166.
6. Mithas, S., Krishnan, M. S. and Fornell, C. (2005) ‘Why do customer relationship management
applications affect customer satisfaction?’ Journal of Marketing, Vol. 69, No. 4, pp. 155–166.
7. Tsai, Y. and Tang, T.-W. (2008) ‘How to improve service quality: internal marketing as a
determining factor’, Total Quality Management & Business Excellence, Vol. 19, No. 11,
pp. 1117–1126.
8. Lee-Kelley, L., Gilbert, D. and Robin, M. (2003) ‘How E-CRM can enhance customer loyalty’,
Marketing Intelligence and Planning, Vol. 21, No. 4, pp. 239–248.
9. Payne, A. and Frow, P. (2005) ‘A strategic framework for customer relationship management’,
Journal of Marketing, Vol. 69, No. 4, pp. 167–176.
10. Band, W., Harrington, J., Kinikin, E. and Ragsdale, J. (2005) ‘Evaluation of top enterprise CRM
software vendors across 177 criteria’, Forrester Research: Cambridge, MA.

© W. S. Maney & Son Ltd. 2010. Journal of Management & Marketing in Healthcare. VOL. 3 NO. 4. PP 256–263. DECEMBER 2010 263
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