Published by: The Forum for People Performance Management and Measurement

• Overview
• Summary of Key Findings
• Methodology

For a complete copy of the study, click here.

Overview

Internal Marketing (IM) is a new and emerging discipline that is practiced in multiple companies under different names. Whether called internal marketing, employee engagement or internal communication, the concept is the same: to align, motivate and empower employees -at all functions and levels- to consistently deliver positive customer experiences that are aligned with the firm’s organizational goals. This definition of internal marketing advances the notion that the discipline is more than communication tactics -such as workplace posters and employee meetings- or a way to build employee satisfaction. Instead, it recognizes that IM can be deployed as a strategic tool to help an organization achieve its business objectives.

This paper presents the findings of a extensive best practices study of internal marketing. The study was conducted fall, 2005 by students enrolled in a course in Internal Marketing in the graduate program in Integrated Marketing Communications at the Medill School, Northwestern University. Students who conducted the study and developed many of the findings are listed in Appendix A.

The purpose of the study was to further the understanding of the subject by identifying, aggregating and communicating the most effective internal marketing initiatives practiced by U.S. companies.

The study analyzes companies from a variety of industries,, i.e., consumer products and services and business-to-business, ranging from packaged goods manufacturers to health care to hospitality and service. This breadth of industry expertise helped identify the internal marketing initiatives that are truly best practices and thus, can be understood and leveraged by any company seeking improvements in their internal marketing activities.

This Executive Summary provides an overview of the key findings from the study and provides examples to support these findings along with some actual verbatim comments from study participants.

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Summary of Key Findings

Companies at the forefront of internal marketing share particular beliefs regarding the role of employees in achieving business success. For example, the following values are embedded in one way or another in each participating company’s culture:

• People matter: The main driver for most IM initiatives is to create a work environment where people feel excited and rewarded in their day-to-day tasks
  
  
• IM drives performance: Employee satisfaction is a key element in developing customer satisfaction, as every employee is considered an extension of the brand.
  
  
• Anyone can make a difference: Successful results are credited to all employees, at all levels and functions, not just at senior management.
  
  
• Employee loyalty is critical: Employees will remain loyal to the company, even in difficult times, if the company is transparent about the challenges it is facing and about its strategic direction.
  
  
• Culture can be a competitive advantage: IM preserves and helps evolve a company’s culture, particularly in cases where culture is a source of differentiation for the brand.

Participating companies were found to share six internal marketing best practices. These have been categorized at three levels: general context, IM implementation and workplace experience:

As shown above, the six best practice elements are related to and supportive of an overall IM initiative.

1. Senior Management Participation: Leadership initiative, support and/or buy-in are vital for the success of any internal marketing initiative. Major change will come from the top down, inspiring employees to follow what their company leaders truly believe in.
   
   
2. Integrated Organizational Structure: IM should encompass all employees in a company. Using a horizontally integrated management or process structure enables all functions and levels to be involved in a collaborative decision-making process.
   
   
3. Strategic Marketing Approach: Best practice companies take a formal approach to internal marketing by applying research and planning processes as well as tools and techniques similar to those used in external marketing programs.
   
   
4. Human Resources Partnership: The human resources function provides a vital role in developing strategies that synchronize with internal marketing and business development.
   
   
5. Focus on Employee Engagement: Creating an efficient and collaborative work environment where employees feel involved and motivated is critical to the success of internal marketing. Focus is on positive reinforcement of proactive work.
   
   
6. Internal Brand Communication: Best practice companies communicate the brand promise to employees across the most relevant channels and then motivate employees to deliver on that promise to all levels of customers.

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Methodology

The first step in the process was to create a definition of Internal Marketing. The definition used in this study was:

Internal Marketing is the ongoing process whereby an organization aligns, motivates and empowers employees at all functions and levels to consistently deliver a positive customer experience that helps achieve business objectives.

Companies featured in this study were identified using the following criteria:

• Current practice of internal marketing, as observed in programs that met the internal marketing definition. Additionally, IM had to be practiced in some or all business units for at least five years.
  
  
• Prior recognition by external institutions specialized in work environment disciplines (i.e., J.D. Powers Award, Great Places to Work® Institute, Fortune’s 100 Best Companies to Work For).Companies had to be on a specified list for more than 3 years, be profitable and should be considered as entities that value customer satisfaction.
  
  
• Companies selected should also have conducted research and measurement on some aspect of their internal marketing or employee engagement initiatives.

Once selected, a profile of each company including information such as number of years in business, number of employees, turnover rate and profitability was developed. All selected companies agreed to provide and discuss information regarding internal marketing initiatives and results through on-site or telephone interviews with key executives and participants of their IM team.

Below is a list of the participating companies. While some study participants agreed to be identified by company name, others wished to remain anonymous. Those who wished to remain anonymous are identified only by industry type.

For a complete copy of the study, click here.

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