Developing and

maintaining a service
culture

Chapter 10
 Topics Covered

o Internal marketing
o Establishment of a service culture
o The importance of empowerment
o Development of a marketing approach to
human resource management
o Dissemination of marketing information to
employees
o Implementation of a reward and
recognition system
 Internal marketing
…marketing aimed internally at a company’s own employees

The purpose is
• to improve employee engagement within,
• increase overall brand reach, and
• also that employees can now provide value to
potential customers because they believe in and
understand the company’s goals and vision
themselves.

Internal marketing is based on the idea that customers’ attitudes

toward a company are not just based on the product or
services, but the overall experience they have with the
company. This can mean customers interactions with various
employees in different departments (not just customer service teams)
or prospects engaging with employees online via social, email, forums,
etc.
Internal marketing
 Internal marketing - What are the
benefits?
For organizations:
Organizations benefit from higher employee
satisfaction, and retention. Recruitment and training
have costs, so when employees stay longer, and are more
satisfied with their jobs, organizations save money.

Other benefits include:

 a customer-oriented workforce
 enhanced external business relationships
 a better flow of information internally
 empowered employees
 increased compliance with standards and protocols
 improved brand reputation
 increased profits!
 Internal marketing - What are the
benefits?
For employees:

Employees feel more motivated and experience

higher job satisfaction. They feel empowered to
make decisions – within certain guidelines – and begin
to feel more respected and valued for their
contributions.
This feeling leads to a greater sense of belonging to
the “team,” as well as responsibility and accountability
to employers. Staff conflicts wane and people have
better dispositions at work.

It takes a customer-orientation mindset.

 Internal marketing

o Four-step process:
• Establish a service culture
• Develop a marketing approach to human resource
management
• Disseminate marketing information
• Implement reward and recognition system

o Too few organizations apply the concept

o No unified concept
o Corporate distraction (boost revenues, cut costs)
 Internal marketing

o Some example internal marketing efforts include:

• Educating employees on the company goals and values

• Encouraging employee input on corporate policies and
leadership, allowing open dialogue and accepting any
criticisms
• Nurturing communication and collaboration among
employees
• Ensuring employees know that their contributions matter
and are essential to the success of the company.
• Opening up the product or services to employees to use
and get involved in
Link Between Internal Marketing
and Profits
Organizational and marketing cultures
o Organizational culture
• Formal and informal guidelines, actually activities
• Shared values and beliefs, behavioral norms
• Individuals understanding of organizational functions

o Marketing culture
• Unwritten policies and guidelines and behavioral norms
• Defines importance of marketing, manner of execution
• Internal marketing - an extension of a service culture

o Service quality - a dimension of marketing culture

• Delivery and receipt of services
 Service culture
….a culture that supports customer service through policies,
procedures, reward systems, and actions

o Culture must support customer service

o Leaders crucial for transmitting, preserving culture
o Commitment from management
• positive attitude toward customers and employees
• time and money transmitting value system
• properly trained employees respond appropriately
• empowered to do so by the organization

o Establishing a service culture may have regional

characteristics
 The importance of empowerment
….the act of giving employees the authority to identify and solve guest
problems or complaints on the spot, and to make improvements
in the work processes when necessary

o Impacts customer perceptions of service quality

o Essential aspect of internal marketing
o Involves decentralized decision-making
• Demonstrated trust, respect for employees’ judgment
o Gronroos’s interactive marketing concept
• Empowered front-line employees
• Control over task performance
o Not suited to all employees
Empowerment and disempowerment:
tourism and hospitality operations

Benefits of Empowerment Drawbacks of Disempowerment

More responsive service
Complaints dealt with quickly
Greater customer satisfaction
More repeat business
Well-motivated staff
Less turnover of staff
Increased productivity
Lower labor costs
Increased profits
Limited authority to meet service needs
Complaints dealt with slowly
Higher level of costs in generating new customers
Fewer loyal customers
Poor motivation and low morale
High turnover of staff
Low productivity
Low wages but high labor costs
Low profits
 Marketing approach to human
resource management
o Attract and retain good employees
• Creative approaches to attracting qualified employees
• Understanding the employee market
• Building a positive company image
o Assist with employee motivation, incentives, training
• Changing behaviors difficult, costly post-recruitment
• Reduced ambiguity, improved service delivery
• Link between training and customer service
o Continuous training can improve morale, reduce turnover
• Hospitality industry turnover double that of other industries
 Developing employee pride

o Motivates people to excel

• More effective than money or position

o Pride builders accomplish this by

• Setting aspirations that touch emotions
• Pursuing a meaningful purpose
• Cultivating personal relationships of respect
• Demonstrating high character
• Injecting humor
 Dissemination of marketing
information to employees
o Role and importance of employees
• Implementation of strategies
• Achievement of objectives
o Frequency, quality, accuracy of communication
• Moderates ambiguity
• Increases job satisfaction
o Communication mechanisms
• One-to-one
• Company meetings
• Training sessions
• Newsletters, emails, reports, videotapes
• Blogs
 Employee exclusion from
the communication cycle

o Manager, supervisor failure to convey information

o Frontline employees should be informed of
• Promotions and new products
• Changes in the service delivery processes
• Action steps in marketing plan
o Poor internal communication a service quality risk
• Customer-contact employees not able to deliver
advertising promises
 Implementation of reward
and recognition systems
o Employees should be made to feel happy and proud of their jobs

Other
Believe in the 9%
company/product Camaraderie, peer
4% motivation
20%
Positive
supervisor/senior
management
4%
Money and benefits
7%
Intrinsic desire to a good
job
Meeting client/customer 17%
needs
8%

Growing professionally
8%
Feeling encouraged and
Having a real impact recognized
10% 13%

https://www.psychologytoday.com/intl/blog/mind-the-manager/201412/what-motivates-employees-go-the-extra-mile
 Implementation of reward
and recognition systems

o Organizations should
• Communicate performance objectives
• Provide relevant training
• Provide feedback
• Provide recognition (non-cash rewards)
• Tailor rewards to the interests of the employees

o Employee dissatisfaction may lead to bad publicity

Thank you