Customers in Marketing

Session 9

Internal Marketing: Enabling Promises

o If youre not serving the customer, youd better be serving someone who is (doing so)
o The entire banking community (everybody who is not serving the customer directly) should devote their resources, skills & energies towards serving the operating bankers, in the same manner in which they are expected to serve the customers. o Treating our employees as INTERNAL CUSTOMERS is the essence of Internal Marketing

IM: An Extension of Marketing Concept

Genesis

Identify Employee Needs/ Expectations

Process

Objective

Market Banks Products/ Strategies to the Employees

The Internal Marketing Concept

Achieve Employee Involvement & Participation

Genesis

Identify Customer Needs/ Expectations

Process

Objective

Manage Delivery to the Customers

Achieve Customer Satisfaction

The Marketing Concept

Figure: The Extended Marketing Concept

The Critical Importance of Service Employees

o They are the Service
Offering is the employee Investing in employee to improve the service parallels making a direct investment in the improvement of the product

o They are the Bank in the Customers Eyes

Employees rudeness makes organization suffer in the perception of the customer

o They are the Marketers

Whether acknowledged or not, service employees perform marketing functions; if done well- to the banks advantage, if poorly- to the banks detriment

Employee Satisfaction, Customer Satisfaction & Profit

Service Quality Dimensions Driven by Employees

All of the Five dimensions of service quality can be influenced directly by Service Employees: o Reliability
Delivering service as promised is often totally within the control of front-line employees Even in case of automated services like ATMs, behind-the-scene employees are critical for making sure all of the systems are working properly

o Responsiveness
Employees personal willingness to help & promptness in serving

o Assurance
The reputation of the bank helps, but at the end , individual employees interaction with customers confirm & build trust or detract from reputation and ultimately destroy the trust

o Empathy
It is difficult to imagine how a bank would deliver caring, individualized attention to customers independent of its employees

o Tangibles
Employee smiling appearance, their dress are important aspects of the tangibles dimension of quality along with others (service facility, signage)

Boundary Spanning Roles

The front-line Employees operating on the boundary of the bank play the role of linking between the external customers and banks environment & internal operations by o Understanding o Filtering o Interpreting information & resources to and from the bank and its external constituencies. Boundary spanning positions are high-stress jobs requiring o Emotional labor in addition to mental & physical skills o Ability to handle interpersonal & inter-organizational conflict o Trade-offs between quality & productivity. Often these stresses & trade-offs result in a failure to deliver services as specified, widening GAP-3.

Emotional Labor
o Labor that goes beyond the physical & mental skills needed to deliver quality service. o Delivering smiles, making eye contact, showing sincere interest, & engaging in friendly conversation with people who are essentially strangers and who may or may not ever be seen again. o Some strategies may help in dealing the realities of emotional labor in the job:
Carefully selecting employees who can handle emotional stress Training them in needed skills (listening skills, problem solving) Teaching or giving them coping abilities & strategies (job rotation, scheduled breaks, teamwork)

Sources of Conflict
Representing the bank to the customer and managing many customers simultaneously, front-line employees inevitably have to deal with conflicts resulting in confusion & frustration if left unattended, leading to stress, job dissatisfaction, a diminished ability to service customers, and even burnout. Some typical conflicts are:

o Person/Role Conflicts
Conflicts between what they are asked to do & their own personalities, values

o Organization/Client Conflicts
Conflict between two bosses: the bank & customer Extreme for demanding customers, & if employees income depend directly on customer

o Interclient Conflict
In serving customers in turn (tellers) or many simultaneously (teachers)

o Quality/Productivity Trade-offs
Employees are asked to ensure customer satisfaction being costeffective & productive

Strategies For Closing GAP-3

Compete for the Best People

IV. Retain the Best People

I. Hire the Right People

Be the Preferred Employer

III. Provide Needed II. Develop People Support Systems to Deliver Service Quality

Measure Internal Service Quality

Service Culture
A culture where an appreciation for good service exists, and where giving good service to internal as well as ultimate, external customers is considered a natural way of life and one of the most important norms by everyone.
o Developing a Service Culture
Years of consistent, concentrated effort is needed to build a service culture and to shift the bank from its old patterns to new ways of doing business

o Transporting a Service Culture

International business expansion, very challenging While there are tremendous opportunities in the global marketplace, there are many legal, cultural, and language barriers to handle

Customers in Service Delivery

People in the service marketing mix is defined as all human actors who play a part in service delivery and thus influence the buyers perceptions; namely the banks personnel, the customer, and other customers in the service environment. o Customer Receiving the Service
The effectiveness of customer involvement at all of the levels influence banks productivity and ultimately, quality & satisfaction The level of customer participation (low, medium or high) varies across services

o Other Customers
Can enhance customer satisfaction & perception of quality, or can detract from satisfaction & quality

Customers Role
Customer participation is valuable especially in services as they can: o Increase Productivity of Banks Resources
Service customers are referred as partial employees for their contribution to the banks productive capacity They also causes uncertainty, ATM and Automated telephone lines are introduced to reduce direct customer contact Service efficiency may increase by effective customerparticipation, self-service as an example

o Contribute to Service Quality & Satisfaction

Can ensure self-benefit & ultimate satisfaction by asking questions, taking responsibility of their own satisfaction & complain when there is service failure They can simply enjoy participating in service delivery (using Internet or ATM other than branch) They frequently blame themselves when things go wrong

Customers Role: An Example

In a customer survey (on the scale of strongly agree strongly disagree) it is found that customers who responded more positively to the questions were also more satisfied with the bank: o What they did- technical quality of customer inputs
I clearly explained what I wanted the bank employee to do I gave the bank employee proper information I tried to cooperate with the bank employee I understand the procedure associated with this service I was friendly to the bank employee I have a good relationship with the bank employee I was courteous to the bank employee Receiving this service was a pleasant experience

o How they did it- functional quality of customer inputs

Strategies For Enhancing Customer Participation

Define Customers Jobs Effective Customer Participation Recruit, Educate & Reward Customers

Manage the Customer Mix

Strategies For Enhancing Customer Participation Bank Should Define Customers Jobs
Helping Him/herself Helping Others Promoting the Company

Individual Differences- Not Everyone Wants to Participate:

Bank should offer choices for different market segments

Strategies For Enhancing Customer Participation

Recruit, Educate & Reward Customers
Recruit the right customers Educate & Train Customers to perform Effectively Reward Customers for their Contributions

Avoid negative outcomes of Inappropriate Customer Participation

They do not understand the service system They do not perform effectively Can make employees suffer

Strategies For Enhancing Customer Participation

Manage the Customer Mix
Customer segmentations according to commonality Process of managing multiple and sometimes conflicting segments are known as compatibility management: a process of first attracting homogeneous customers, then actively managing both the physical environment and customer-tocustomer encounters to enhance satisfying encounters and minimize dissatisfying encounters.