Posted in Marketing & Strategy Articles, Total Reads: 4296
, Published on 16 December 2013
Internal Marketing + Culture + Employer Branding = Customer Service
Seth Godin, the marketing guru of our times, speaks about the importance of tribes in his book ‘Tribes: We need you to lead us’. If we look through the history of mankind, the pattern of thriving and perishing of humans has always been affected by the group to which they belonged to, or the tribe. And each tribe had one thing in common which helped the group thrive: Culture. Each tribe had its own unique beliefs, procedures, symbols – such as deities, tools, logos, colors, songs, etc. This article describes how internal marketing has is instilled the concept of tribes in business organizations for delivering customer and stakeholder value.
Culture, simply put, is the behavior of employees and the meaning or purpose they attach their actions with. Culture is the result of organizational values, beliefs, symbols of these beliefs and systems in place. Employees interpret meanings of each other’s actions with culture. This infuses trust in employees and speeds up actions, making the organizations more agile and adaptable.
Culture has gained such an importance that companies now look for cultural fit in a prospective employee before even assessing technical and business skills. Notably, tech-startups and culture driven organizations like GE, Ogilvy&Mather have made culture test as part of their recruitment processes. Educational institutions and Non-profits have their own culture that binds them together. E.g.: IITs, Harvard
Taking the analogy of human tribes to organizations of the present day, we see that each company strives for a great culture. Sometimes, the culture derives the personal philosophy of the founders. Often, the culture as the taglines of companies become the guiding light of employees when they face decisive situations.
Example: The Virgin Group
The Virgin Group has around 200 businesses employing 50,000 people in 50 countries with revenues of over $24 billion.
Virgin has always challenged norms in its history, even nature – by introducing the Virgin Galactic plane for space travel. This challenging and risk taking ability is from the founder, Sir Richard Branson. The risk taking culture is reflected in its tagline – ‘Screw it! Let’s do it!’
Virgin has actively encouraged personal expression, whether it is in their speech, creative and conceptual thinking or dress code. Virgin also believes in accountability and autonomy to employees. This has been transformed into a business goal by 200 separate companies individually managed with each having its own separate funding.
Sir Richard Branson’s idea that “if you keep your staff happy then the customer will be happy, and if you keep the customer happy then the shareholders are happy” has their culture their USP.
Internal marketing focuses on the promise the company makes to its customers and the expectations of the employees of the company to deliver on that promise. Internal marketing is done for 3 main purposes:
• Strategic Internal Marketing – Cooperation to reduce inter-departmental conflict
• Change Management
• Corporate Image
Internal marketing is done through training, motivation and providing direction by influencing employee knowledge, attitudes and behavior. This in turn affects customer service directly resulting in improved customer retention. Internal marketing efforts are largely led by the management by exemplification.
Managerial incompetency and rigid organizational structure resisting to change are the major impediments of bringing about cultural change through internal marketing.
Example: HCL Technologies
ECFS – Employees First Customers Second strategy by HCL Technologies in the year 2005 was a pet project of the then-CEO Vineet Nayar. With this strategy HCL employees felt that they were part of a community rather than a bureaucracy and operate like a democracy rather than a hierarchy. Prior to this strategy being introduced in HCL, the employees did not have the confidence that they could win big deals that could push them towards the big leagues. Moreover, many felt that this was just a morale-boosting slogan.
But Vineet Nayar, in the February of 2006, announced and argued for the case in a meeting with some of HCL’s largest clients. HCL’s share tanked 8% that day. But the employees now knew that the company was accountable for them now. The new initiatives were:
• Transparent financial data
• Internal forum called U&I for interacting directly with the CEO
• Time bound service delivery for employee issues
• Open 360 - optional making public the performance appraisals
• Reverse-accountability of managers where managers were responsible for mentoring and growth of the employees
• O2 league of extraordinary – to recognize high performers
• Xtramiles – to recognize and reward employees
• MITR – counselling for employees and their family member available 24x7
• Weekly polls on various issues
• Catalyst –various activities for team building and work-life balance.
The results were astonishing: Attrition rate dropped for 9 consecutive quarters, utilization and revenue/employee increased, HCL won big million dollar deals resulting in improved topline and margins. This in turn resulted in growth and delivered better value for stakeholders.
Employer branding denotes what people associate with the organization. It is the result of the company’s efforts to communicate to the staff what makes the company a great place to work. Employer branding results in employee engagement and employee retention.
Great customer service can occur only if the employees feel that they are important in delivering it and when employees actually take care of the customers. With culture, trust is instilled in each employee and teamwork is enhanced with push-pull among the team and within the teams, decision making becomes faster and the customer service process becomes nimble.
One of the best examples of truly great customer service due to exceptional culture is Zappos.com, an online shoe retailer. Zappos was founded in the year 1999 as ShoeSite. It had sales of $1.6 million in the year 2000 relying only on word-of-mouth advertising. In the year 2002, CEO Tony Hsieh worked out a plan to attain $1 billion in revenues by 2010 and receive inclusion in Fortune’s Best Companies to Work For list. The company had a single minded focus on culture to drive exceptional customer service with great culture. Its tagline says: ‘Powered By Service’.
With customer service available 24x7x365 Zappos employees answered 5,000 calls daily and 1,200 e-mails weekly. Call center employees did not have scripts, and there were no limit on call times. Zappos employees even answered customer queries that did not relate to their products. They had free delivery and pick up of return items. Employees were encouraged to use their Twitter accounts for casual communication rather than promotions or marketing pitches, in an effort to humanize the company.
Zappos had a program called “The Offer” – a way to purge new hires who don’t fit into the company. After a one-week training session, new recruits are offered $2000 to quit, ensuring that only those who have true passion and drive stay on. Employees got free health insurance for themselves, their family and their pets too. Ample paid leaves and free meals and drinks were available.
As a result of these efforts, in 2008, Zappos hit $1 billion in annual sales, two years earlier than expected. In 2009, they fulfilled their other long-term goal, debuting at No. 23 on Fortune’s Top 100 Companies to Work For.
Zappos being well known for its great culture and customer service, wanted to show the world how this been made possible. After all they were selling shoes. Hence they launched Zappos Insights, aimed to help other business people refine their company culture and customer service
What made Zappos’ customer service so unique is the fact that the company has actually taken their core values and culture and turned them into reality. Zappos’ emphasis on building open and honest relationships with communication meant that only items which are in stock are shown on the site.
In 2009, Amazon acquired Zappos.com for a reported $1.2 billion. The CEO later explained that they were actually worried about the dilution of Zappos culture with integration to Amazon.
THE WAY FORWARD
An organization can achieve success only if the goals of the organization and the goals of the employees align together. This will enable the company to achieve a higher purpose – one that achieves targets set by stakeholders and personal goals of the employees. With a great culture in place, employees will not fear to make mistakes and if they do, they will not fear to accept them upfront. This goes a long way in creating a learning organization where mistakes do not get repeated. So we see that a lot of companies have successfully delivered value and exceptional customer service while at the same time engaging and taking care of employees.
There are 3 things to take away from this one: the CEO is no longer the captain in a flat organization that is culture driven, two: clichéd visions of culture and values can actually be turned into reality and integrated with business goals and three: if these companies can do it, why can’t all the companies do it too?
This article has been authored by Mano Ranjan from NMIMS Mumbai