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Papers DonE.Schultz Building an internal marketing ispresentlyProfessor Emeritus-in-Serviceof management calculus IntegratedMarketing CommunicationsattheMedill SchoolofJournalism, Don E. Schultz NorthwesternUniversity.Heis alsopresidentoftheconsulting Received(inrevisedform):7July2004 firm,AgoraInc.,basedin Illinois.Additionally,heisa visitingprofessoratCranfield Abstract SchoolofManagement,UK,an adjunctprofessorat Internalmarketingisincreasinglyimportanttoorganisations,butithas QueenslandUniversityof proventobeadifficultimplementationalchallengeformanagers.The Technology,Brisbane, authorreviewsthecurrentprimaryinternalmarketingconceptual Australiaandavisiting models.Thepaperidentifiesthefivemajordifficultiesmanagersfind professoratTsinghua University,Beijing,China. indevelopingandimplementinganinternalmarketingprogramme. Fromthat,itprovidesamodelforafinanciallybasedintegrated internalmarketingmanagementdevelopmentandallocationcalculus approach.Thisprocessstartswithcustomersandworksbackthrough Keywords:internalmarketing, employeebehaviours.Itplacesafinancialvalueonchanged employeebehaviours, employeebehaviourssothatinternalmarketingcanbetreatedasan organisationalsilos,integration, investmentmodels investmentandreturnprocess. Introduction Internalmarketinghasgenerallybeendefinedasactivities,actionsand managerialdirectionsanorganisationimplementsinanattemptto encourageandgenerateemployeeandotherstakeholdersupportfor programmesandprocessesneededtoachieveorganisationalgoalsand objectives.Whilethereareotherdefinitions,1 thisseemstosummarisethe viewsofmostacademiciansandpractitioners. Giventheincreasinglycompetitiveglobalmarketplace,internal marketingisbecomingmoreandmoreimportanttoalltypesof organisations,acrossmultiplevenues.Forexample,recently,the EuropeanJournalofMarketingdevotedanentireissuetothesubject.2 Internalmarketingdiscussionsarenowstartingtoemergeinother scholarlyandprofessionaljournalsaswell.3 Whatiscausingthissuddeninterestininternalmarketing,asubject thatwas‘hot’inthe1980sbutseeminglydisappearedinthe‘go-go’days oftheinternetbubbleofthe1990s?Clearly,itisthegrowingrecognition ofbothscholarsandprofessionalsthatwiththeincreasing commoditisationofproductsandservices,wheredifferentiatorsare ProfessorDonE.Schultz commonlyshort-livedorevennon-existent,ongoingcustomer AgoraInc. relationshipswiththebrandandtheorganisationmaywellbetheonly 1007ChurchStreet Suite105 wayforthefirmtobuildlong-term,sustainablecompetitiveadvantage.4 Evanston Inaddition,thecontinuingfailureoftechno-drivencustomerrelationship IL60201 management(CRM)approachesreinforcesthatview.5 Thehoped-for USA Tel:+18473286488 advantagesofcustomerdata,rapiddataprocessing,newstatistical Fax:+18473286486 algorithmsandthelikehavewinnoweddowntonothingmorethana E-mail: welterofmarketer-drivencontactmanagementschemes.6 [email protected] &HENRY STEWART PUBLICATIONS 1463-5178. Interactive Marketing. VOL.6 NO.2 PP111–129.OCTOBER/DECEMBER2004 111 Schultz Internalmarketingcomesattheproblemfromadifferent organisationalperspective.Ratherthanfocusingonendcustomersand theirneeds,internalmarketingassumesthatemployeesandtheir requirementsandactivitiesarewhatreallydrivesuccessful,ongoing Satisfiedemployees businesses.Themantrais‘Satisfiedemployeesbegetsatisfiedcustomers’. begetsatisfied Satisfiedcustomersaremoreloyalcustomers.Andloyalcustomersare customers morevaluablecustomersinboththeshortandlongterms,aspositedby Reichheld,Sasserandahostofotherloyaltyproponents.7 Asaresult,the bestplaceforthefirmtostartconsistentlytobuildamoreprofitable businessmodeliswithemployeesandotherstakeholders.Thusthebelief Employeesas followsthatorganisationalsuccessstartswithanincreasedfocusonhow supporters, andwhyandinwhatmanneremployeescanbeturnedintothefirm’s advocatesand supporters,advocatesandcustomer-serviceproviders.Thatshouldenable customer-service thefirmtodevelopsustainabledifferentialcompetitiveadvantages.8 providers Theproblemis,whiletheconceptof internalmarketingissound,the actualpracticeisanentirelydifferentmatter.9 Thispaperinvestigateswhy internalmarketinghashadsomuchdifficultygainingtractionwith internalmanagers,andwhyithasfailedtoliveuptoitspotentialasa relevantandimportantorganisationalprogramme.Itstartswithabrief historyof internalmarketingfromanacademicperspective.Thatis followedbyadescriptionoftheauthor’sexperienceswithinternal marketingatNorthwesternUniversity.Thepaperendswithasuggested newmanageriallyorientedapproachthattheauthorbelievescutsthrough thechallengesthathavefacedinternalmarketingforyears. A quick tour of internal marketing history Overitsrelativelyshorthistory,internalmarketing(IM)hasdeveloped alongthreeseparateanddistincttracks.Theearlyapproacheswere suggestedbyBerryinthe1970s.10 Workingintheareaofservices marketing,hedevelopedtheideathatbecausepeoplewerethemost commonformofservicedelivery,theiractionsprobablyhadamajor impactoncustomeracquisition,retentionandmigration,andthusthe ultimatesuccessofthefirm.BerryapproachedIMfromatraditional marketingview.Hepositedthatemployeejobscouldbeconsideredthe firm’sproducts,anddevelopedtraditionalmarketingmodelsand approachesthatwerebasedontheideaofmakingtheworker’sjob Basic4Psapproach attractiveanddesirabletohimorher.Heemployedabasic4Psapproach thatfocusedontheemployee’sjobastheproductandusedvariousforms andformatsofprice,distributionorplaceandpromotiontobuildthat desirability.Thus,amajorfocusofBerry’sapproachwastodevelop varioustypesandformsof internalcommunicationandpromotionto encourageandbuildemployeejobsatisfaction,withtheideathat employeesatisfactionwouldleadtocustomersatisfactionwhichwould,in turn,buildmorecustomerloyalty. Inthe1980s,Gronroos11 introducedtheScandinavianapproachtoIM. Customer-facing He,Gummeson12 andotherstookasomewhatdifferenttack.Theyargued employeekeytoa theemployeewasanimportantpartoftheoverallproductorservice firm’ssuccess deliveryequationdevelopedbythemarketingfirm.Thus,thecustomer- facingemployeewaskeytothefirm’ssuccess.Gronroosproposedthat 112 &HENRY STEWART PUBLICATIONS 1463-5178. Interactive Marketing. VOL.6 NO.2 PP111–129.OCTOBER/DECEMBER2004 Building an internal marketing management calculus eachsuchemployeebetrainedasamarketer—thatis,trainedtodoadd- on,cross-sellingandthelikealongwithongoingcustomerretentionskills thatwouldenablethebuildingofcustomerrelationships.Thebalanceof theorganisation,whatheconsideredthe‘back-room’or‘back-end’, shouldbedesignedtosupportthesecustomer-facingemployees.Thusthe focusoftheorganisationwasnotjustonprovidinganexcellentcustomer productorserviceexperience,butwasbasedonbuildinganongoing relationshipwiththecustomerthatcouldbeconvertedintoadditional salesandprofitsiftheemployeesdidtheir‘IM’jobs.(Interestingly,itwas thispremiseofrelationshipmarketingthatledtothedevelopmentof techno-CRMinNorthAmerica.Unfortunately,whencomputerisingthe customerrelationshipprocessintheUSA,softwaredevelopersignored thehumanrelationshipsthatGronroosandothershaddesignedintotheir approaches;hencethefailureofCRMinmuchofNorthAmerica.) Inthe1990stwoacademicsintheUK,RafiqandAhmed,13 developed Ahybridapproach whatwasessentiallyahybridapproachtoIM.TheytookthebestofBerry andGronroos,addedsomeconceptualthinkinganddevelopedanother formofIM.14 Intheirapproach,theyproposedthatIMwasinherently difficulttoimplementbecauseof inter-functionalconflictsbetween departments,managementandemployeesandthefirm’sinherent resistancetochange.Thus,theirmethodologyfocusedonovercoming organisationalinertiabyidentifyingthespecificbehaviouralchanges employeesneededtomake.Theythenrelatedthosebehaviouralchanges tothevariousdepartmentsandgroupswithinthefirm.Thatprovidedthe baseforthedevelopmentofcross-functionalintegrationwithinthefirm. Whiletherehavebeenotherapproaches,thesethreestreamsof thinkinghavedrivenIMformorethan30years.Inspiteofthesewell- developed,well-definedandwell-researchedstreamsofthought, practisingmanagersstillfindIMtobeamostdifficulttask.15 Thenext sectionoffersadifferentviewofwhytheIMprocesshasbeensodifficult toimplement.Thisisbasedonresearchandteachingexperienceat NorthwesternUniversity,andisfollowedbytheconceptualmodel developedthere. Some background on integration In2001,theIntegratedMarketingCommunications(IMC)Departmentat NorthwesternUniversity(NU)wasapproachedbyseveralUSA-based motivationandincentiveorganisationsandassociations.Chiefamong thoseweretheSITEFoundation,theIncentiveMarketingAssociation, CarlsonMarketing,MaritzInc.andothers,allofwhomhadaninterestin developingbetterIMprogrammesfortheirclientsandmembers.Most hadconductedvariousformsofresearchovertheyears,somepublic, Needforacoherent, someproprietary.Butallrecognisedtheneedforamorecoherent,robust robustand andmeasurableapproachtoIMthanthatwhichcurrentlyexisted.The measurableapproach goal,thus,wastodevelopatheoreticalbaseforIMthatwouldeither toIM support,changeormodifythepracticesthathadgrownupovertheyears basedonpractitionerresultsoranecdotal‘rulesofthumb’.Together,the IMCDepartmentandthesponsoringfoundersestablishedtheForumfor PeoplePerformanceManagementandMeasurement,16 anorganisation &HENRY STEWART PUBLICATIONS 1463-5178. Interactive Marketing. VOL.6 NO.2 PP111–129.OCTOBER/DECEMBER2004 113 Schultz thatwasdesignedtofocusonresearching,aggregatinganddisseminating theory-based,practicalapplicationsofIMamongthemembershipofthe Forumandthegeneralbusinesscommunity. AsapartoftheoverallchargeoftheForum,therewasadesireto createagraduate-levelcourseinIM:onethatcouldbetransportedto otheruniversitiesandperhapsevenserveasamodelforanexternal professionaldevelopmentprogramme.Thedesiredcoursewasdeveloped inthespringandsummerof2003.Itwasdeliveredforthefirsttimein autumn2003tograduate-levelstudentsenrolledintheIMCDepartment atNU.Sincethattime,thefacultyhasbeenreviewingthecourseandthe learningsthathaveemergedfromit. Itshouldbenotedherethatmarketingandcommunicationalignmentis notnewtothefacultyatNU.Thatgroupestablishedthefirstgraduate- levelIMCcurriculumin1991.IthasbeenteachingtheprinciplesofIMC formorethanadozenyears,althoughadmittedlymostofthefocushas beenonthedevelopmentofexternalmarketingandcommunication integration.So,thedevelopmentofIMwasanaturaloutgrowthforthe group. BasedontheworkintheoveralltopicofIMC,andtheresearchand investigationofIM,fivebasicproblemsinthedevelopmentand applicationofanintegratedIMapproachattheorganisationallevelwere identified.Understandingthoseproblemshasledtowhattheauthor believesmightwellbeaninnovativesolution.Thepapernowdiscusses theproblemsanddifficultiesfirst,andthenpresentsasolution. Why most IM methodologies have failed FivereasonswhyIM IninvestigatingwhyIMhasnotmetwithmoremanagement hasfailed implementationsuccess,fiveissueswereidentified. FewfinancialmeasuresofIMprogrammesuccess Forthemostpart,IMmethodologieshavereliedontraditionalmarketing conceptsandapproaches.Thatis,theyhavebeenbasedonastimulus- responsepsychologicalmodelthatassumesachangeinattitudebythe audiencewill,atsomepoint,resultinachangeinbehaviourbythe audiencereceivingthemessages.Thus,IMprogrammeshavecommonly beendevelopedtoencourageemployeestounderstandtheneedfor customerfocus,thevalueofsupportingorganisationalgoals,the responsibilityofemployeestoensurecustomersatisfactionandthelike. Andtheresultsofsuchprogrammeshavethenbeenevaluatedonthebasis ofcommunicationeffects,ieawareness,recognition,abilitytoplayback thedistributedmessagesandsoon.Theseapproachesemulatetraditional broad-scale,mass-marketexternalmarketingapproaches. Theproblem,ofcourse,istheattitudinalmeasurementmodelbeing usedismostdifficulttoconnecttoanytypeofbehaviouralchangeor, ultimately,toanyorganisationalfinancialreturn.Foroverhalfacentury, marketingandcommunicationmanagershavehadlittlesuccessin connectingachangeinconsumerawarenessorattitudestoachangein behaviour.ThusthefirminvestsdollarstoimplementIMprogrammes, butmeasuresreturnsintermsofmessageawareness,attitudinal 114 &HENRY STEWART PUBLICATIONS 1463-5178. Interactive Marketing. VOL.6 NO.2 PP111–129.OCTOBER/DECEMBER2004 Building an internal marketing management calculus improvement,abilitytorecallmessagesorothercommunication-related effects.Withoutevidenceofmeasurablebehaviouralchangesby employees,measurementofthefinancialreturnsresultingfromIM programmesbecomesextremelydifficult.And,withincreasingly quantitativelyorientedseniormanagement,thisinabilitytoconnect dollarsexpendedforIMprogrammestodollarreturnstothefirmputs mostprogrammesinjeopardy. LackofmanagementcohesionindevelopingorimplementingIM programmes Whichdepartment IMprogrammesoftenfallunderthecontrolofoneormanyfunctional hasresponsibilityfor groups.Insomeorganisations,IMistheresponsibilityofhuman IMprogrammes? resources(HR).Inothers,itisguidedbymarketing.Andinstillothers,it isunderthesupervisionofcorporatecommunications.Perhapstheworst- casescenarioiswhenIMisabitoftheresponsibilityofallthree. Clearly,eachfunctionalgroupviewsIMdifferently.HRseesitmostly asanemployeesatisfactionissue.MarketingviewsIMasaselling opportunity.Corporatecommunicationslooksatitasreputation management.Thusthereisoftennocohesionoragreementinsidethe variousfunctionalunitsandevenlessbetweenthem. Tomakemattersworse,inmostcases,theemployeeswhoaretobe includedinIMprogrammesdonotreporttoanyofthethreefunctional groupsthatareimplementingtheprogrammes.Oftentheemployees reporttooperationsor productionorsalesorsomeotherfunctional group.ThusonefindsasituationwhereIMprogrammesarebeing developed,plannedandimplementedbygroupsthathavenoauthorityor responsibilityforthepeopletheyaretryingtomotivateorwhose behaviourstheyaretryingtochange. IMimplementationresidesatthemiddlelevels Littlevisible Forthemostpart,IMoftengetslittlevisibleseniormanagementsupport. managementsupport WhilemanyseniormanagersagreethatIMisimportant,thereappearto befewwhoactivelychampionthecause.Forthemostpart,the responsibilityforthedevelopmentofIMprogrammesispushedtothe middle-managerlevel,withalltheinherentproblemsofturf,position, promotionandpoliticalsituationsthatinhabitthatregion.Thuswhile almosteveryacademicmodelandmostfunctionalmanagerssaysenior managementsupportisneededorrequiredtomakeIMwork,inthe author’sexperience,witharelativelylargenumberofcompanies,IM simplyisnotviewedasaseniormanagementissue.Itisoftenconsidered simplyasamotivationorrewardprogramme,oftenwithintheprovinceof sales,brandandproductmanagers,HRandmotivationpeople.Thatis tactical,notstrategic,work.Thusmostseniormanagersshyawayfrom beinginvolvedexceptforprovidingsomeresourcesandtacitapprovalof programmes.Giventhattherearefewexamplesofsuccess,IMoften seemstobeconsidereda‘necessaryevil’bytheorganisationandtreated assuch. &HENRY STEWART PUBLICATIONS 1463-5178. Interactive Marketing. VOL.6 NO.2 PP111–129.OCTOBER/DECEMBER2004 115 Schultz Noconnectionbetweenemployeesandinternalstakeholdersand externalcustomers OneofthemajorissueswithIMisthatitisoftendifficultforemployees, particularlythosewhoarenot‘customerfacing’,tounderstandhowIM affectsthem,theirjobs,thecustomerortheorganisation.A‘pull-and- pack’workerinanorderdeliverydepartmentmaynevereverseea customerofthefirm.ThesameistrueforIT,maintenance,product sourcingmanagersandthelike.Thusitisoftendifficultforthemto understandthattheworktheyperform,theactivitiestheyconductandthe responsibilitiestheyhaveareevenrelatedtocustomersatisfactionand customerloyalty.Further,whenthefocusoftheorganisationison efficiencyandcostcutting,evencustomer-touchingemployeesfindit difficulttorelatetocustomer-focusedprogrammes.Witnessthecustomer Employeedifficulty servicecentrewhere,intoomanycases,customerservicerepresentatives inrelatingto arerewardedonthenumberofcallstheyhandleperhour,notonthe customer-focused numberofcustomerssatisfied. programmes Lackofamanagementcalculus PerhapsthegreatestdifficultyindevelopingandimplementingIM programmesisthelackofastrategicmanagementcalculusorplanning systemthatcanbeusedattheseniormanagementlevel.Seniormanagers havenoideaofwhatthevalueorreturnonanIMprogrammeis,wasor couldbe,andmiddlemanagersdevelopingtheprogrammesgenerally cannottellthem.Forthemostpart,seniormanagementisaskedtofund IMprogrammestobuythe‘stuff’neededtoconducttheprogramme,ie communicationmessagedistribution,brochures,folders,banners,buttons Littlesaidabout andthelike.Littleiseversaidaboutorganisationalreturns,onlyabout organisational organisationalcosts. returns Further,withnomethodofviewingIMassomethingtheorganisation does,ratherthansomethingafunctionaldepartmentdevelopsand delivers,itisdifficult,ifnotimpossible,forseniormanagerstoviewIM asanythingmorethananothercorporateprogrammethatdemands corporateresourcesbutprovidesfewcorporatereturns.Itishere,the authorbelieves,thatthemostcriticalstepsneedtobetakentobuild supportforanytypeofIMapproach. WhilethereareclearlyotherissuesfacingIM,intheNUworkoverthe pastfewyearsthesehavebeenfoundtobetheonesthatcreatethemost difficultyandtheonesthatmustberesolvedforthefieldtomoveahead eithertheoreticallyor practically. Thenextsectionprovidessomeintegratedtoolsthathavebeen developedatNUthatitisbelievedcanovercomesomeofthese historicallydifficultissues. Building an integrated IM process Relevantcustomerbrandexperiencesare,orshouldbe,somethingthe Customerneeds entireorganisationdevelopsanddeliverstoexternalcustomersonan shoulddriveIM ongoingbasis,notjustafunctionalgroupsuchasmarketingorcustomer programmes serviceordealers.ThatistrulythebasisforIM.Thuscustomerneeds shoulddriveIMprogrammes,notjustcorporateneedsorobjectives. 116 &HENRY STEWART PUBLICATIONS 1463-5178. Interactive Marketing. VOL.6 NO.2 PP111–129.OCTOBER/DECEMBER2004 Building an internal marketing management calculus Therefore,thealignmentofcustomerneedswiththeabilityand willingnessofemployeestodeliversatisfactorycustomerbrand experiencesreallydetermineswhetherornotanIMprogrammeisneeded initiallyandwhetherultimatelyitwillsucceedorfail.Unfortunately, gainingthenecessaryalignmentbetweenmanagement,employeesand customersisnotasimpletaskforseveralofthereasonsdiscussedearlier. ByfarthemostmitigatingfactoragainstsuccessfulIMprogrammes, however,istheorganisationalstructuremostfirmsemploy.Anillustration oftheproblemisshowninFigure1.17 Organisational Manyorganisationsarestructuredinfunctionalsilos,asshownin structureoffirms Figure1.Eachfunctionalgroupisfocusedonaspecificsetoftasks, reportingverticallyuptoseniormanagement.Functionalgroupshaveno reasonorincentivetointeractorevencommunicatewithothergroups withinthefirm.Evenworse,theyhavenorealreasonevento acknowledgetheexistenceofcustomers.Customersareofftothesideso theywillnotinterrupttheinternalflowofworkactivities.Inthis structure,internalmanagementisverticalandcross-functional coordinationisrestricted.Whilethisstructureiseasyforseniormanagers toinstallandcontrol,itnecessarilyseparatestheorganisationinto managerialfiefdomsratherthancoherent,customer-servingsystems. Themostchallengingelementinthisorganisationalstructureisthat customers,thefinanciallifebloodofthefirm,arenecessarilydefinedout ofthemainstreamofthecompany.Oftentheyareviewedasnecessary, butnotterriblyrelevanttothesuccessofthefunctionalgrouporeventhe organisationitself. Sincefunctionalgroupsarefocusedoncarryingouttheirtasks,they Functionalgroupsdo commonlyhavelittleornointeractionwithotherfunctionalgroups.In notinteractwith therarecaseswherecustomerfocusisdeveloped,theactivitiesconnected otherfunctional withthatinitiativearecommonlycarriedoutbyoneofthefunctional groupswithinan groups.Sowhilethecompanymayespousecustomerfocusorcustomer organisation orientationorbeingcustomer-centric,thereisnopracticalwayforthatto CEO Human Information Marketing Finance Operations resources technology C u s t o m e r s Figure1: Functionalsilosignorecustomers,employeesandbrandexperiences &HENRY STEWART PUBLICATIONS 1463-5178. Interactive Marketing. VOL.6 NO.2 PP111–129.OCTOBER/DECEMBER2004 117 Schultz occur.ThuswhenIMissuesarise,forthemostpart,theorganisationhas nostructure,processorsystemwithwhichtoimplementanycross- functionaltypeofprogramme,and,evenworse,noorganisationalsystem thatcanbeemployed. Twosolutionsquicklybecomeapparent.Oneistoblowthe organisationupandstartoverwithamatrixorflatorganisationdesign,an approachsuggestedbymanychangemanagementororganisational structuregurus;theotheristofindwaystobuildhorizontalsystemsor processesthatwillbringtheorganisationtogether.TheapproachinNU’s Buildingof IMCDepartmenthasbeentobuildandimplementhorizontalprocessesor horizontalprocesses systems,allowingthefunctionalsilostoworkinateam-likefashion.18 toenableteamwork Theapproachhasthevalueofkeepingthecurrentorganisationalstructure inplace,withtheinherentcostsavingsandorganisationalfocusalready established,whileatthesametimeenablingthevariousfunctionalgroups andmanagerstocometogethertosolvemutualproblemsandissues. NUhasappliedsuchanapproachtoanexperiencewithafor-profit educationalinstitution.Anexampleofthatsituationandtheproposed solutionarediscussedbelow. ThisapproachtoIMfollowsabasiclogic.Figure2showsasetof horizontalprocessesthatarecommonlyrequiredinthedevelopment, implementationandmeasurementofanintegratedexternalmarketing process.19 ThisapproachisusedtoformthecruxofthenewIM approach. Whilethecross-functional,horizontalsystemsarecriticaltothe successofanyintegratedorganisationalprogramme,thesecondkey elementistoidentifyareasonwhichintegratedfunctionalprocesseswill Focuson focus.MostIMprogrammestodayfocusoncommunication—thatis,the communication developmentanddeliveryofmessagessuchasexhortationstoemployees tofollowthecompanyline,changetheirattitudesand,hopefully,atsome pointrefocustheirbehavioursasaresultofseeingorhearingthe companymessages. CEO Human Information Marketing Finance Operations resources technology Strategy development process Value creation process C u s Channel management process to m e Information management process r s Performance management process Figure2: Integratedplanningprocessesfocusedoncustomers 118 &HENRY STEWART PUBLICATIONS 1463-5178. Interactive Marketing. VOL.6 NO.2 PP111–129.OCTOBER/DECEMBER2004 Building an internal marketing management calculus BasedonNU’sexperiencewithexternalmarketingandcommunication programmes,whileattitudinalchangeisimportantintermsof understandingabehaviouralchange,thekeyelementfororganisational Doestheactual successiswhetherornottheactualbehaviouroftheemployeechanges.It behaviourof isbehavioursthatcustomersobservewhendealingwiththeorganisation employeeschange? andemployees,muchmoresothantheattitudeswhichmayunderliethose behaviours. Thisisnottosaythatemployeeattitudesareunimportant.Theyare critical.But,again,itisthebehavioursofemployeestowardscustomers andotherswithintheorganisationthatreallydrivetheoverall,long-term successoftheorganisation.InNU’sworkindevelopingexternal marketingprogrammes,thebestapproachisfirsttoidentifytheimportant behavioursthatareinhibitingsuccess,whetherthosebebehavioursby customers,internalemployeesorwhatever.Thus,intheintegrated marketingprocess,onestartswithcustomerbehaviourssincethosedrive thefinancialreturnsfortheorganisation.Thenonetriestoexplainor understandwhythosebehavioursoccurred,oftenbyoverlayingattitudinal datagatheredfromtherelevantparties.So,ratherthantryingtoinfluence futurebehavioursthroughattitudinalchange,onefocuseson understandingandexplainingthosebehaviourswiththegoalofchanging thembasedonwhateversupportsthem.Thissimplechangeiswherethe processstarts.Thatis,startingwithattitudinalchangeorbehavioural changemakesamajordifferenceinthelevelofsuccesstheorganisation typicallyachieves. Insummary,inNU’sexperience,institutinghorizontalprocessesand systemsthatbringthefunctionalgroupswithintheorganisationtogether iscriticallyimportantforsuccess.Andchangingbehaviours,notjust attitudes,isthekeytounderstandingorganisationalreturnsfromIM investments.Withthesetwotools,wecannowmovetothemodelofIM managementandimplementation. An integrated IM model Figure3showsaworkingmodelof integrated,behaviourallybasedIM. Asshown,onecontinuestoacceptthefunctionallyorganisedstructure foundinmostorganisations.Buttobringthosefunctionalgroups together,oneoverlaysfivebehaviouralfactorsNUhasfoundcustomers Abettercustomer generallywouldliketoseethefirm’semployeesimprovetocreateabetter brandexperience customerbrandexperienceforthem.Whilethefactorsillustratedinthe modelarehypotheticalandgeneralised,theyrepresentissuesthat organisationalmanagerswillfindquitefamiliar.Thesectionthatfollows illustrateshowtheintegratedIMmethodologymightbeappliedtoan actualorganisationalsituation. Obviously,thehorizontalissues—thatis,employeebehavioursthat needtobemanaged—mustbederivedfromcustomerorend-user Externalvalidityand researchordata.Simplyattemptingtochangetheorganisationorchange supportarevital employeebehaviourswithoutexternalvalidityorsupportisgenerally doomedtofailure.So,onestartsfirstwithconsumerorend-userresearch toidentifywhatwouldorcouldprovideabetterorganisationalexperience forconsumerswiththefirm. &HENRY STEWART PUBLICATIONS 1463-5178. Interactive Marketing. VOL.6 NO.2 PP111–129.OCTOBER/DECEMBER2004 119 Schultz CEO Human Information Marketing Finance Operations resources technology Customer service requests E ders Product/service knowledge mplo Cus ence lea Rigid following of company rules yee beh tomer is di No knowledge of customer value av su Au iou es Sloppy, inaccurate work habits rs Figure3: AnintegratedmanagerialIMcalculus Thenextstep,oncethecustomerissueshavebeenidentified,isto Determineemployee determinetheemployeebehavioursthatwouldresolvetheissues.For behaviourstosolve example,iftheissueisslowresponsetocustomerrequestsforservice, issues thatprovidesthebasefortrackingbackintheorganisationtodetermine whythatisoccurring.Itcouldbeasystemsproblem,amanagement problemorsimplyanemployeemotivationalproblem.Clearly,toemploy anIMapproach,theproblemmustbeonethatcanbesolvedbychanges inemployeebehaviours. AcriticalpartoftheintegratedIMapproachistoplacesometypeof financialvalueontheresolutionofthecustomerexperience.Thus,senior Placingfinancial managershavetoestimate,calculateormeasurethefinancialimportance valueonthe orvalueofthecustomerexperienceandthefuturevaluethatwouldbe resolutionofthe generatedifthesituationwereresolved.Forexample,assume7percent customerexperience ofthefirm’scustomersareaffectedbyslowcustomerservice.If itwere determinedthatbyimprovingthatelementofthecustomerbrand experience,a2percentincreaseinsaleswouldbelikelytooccurifthe problemwereresolved,thenthatwouldbethevalueoftheemployee behaviouralchange.Alternatively,iftherewerenodirectincremental salesincreasebutanincreaseinlong-termcustomerretentionwould occur,thatwouldprovidethebasevalueoftheIMprogramme.The importantpartofthisIMmanagementcalculusistoidentifysome financialvaluethatwouldorcouldaccruetothefirmifspecificchanges inemployeebehaviourswereachieved.Thatprovidesthebaseforan investmentandreturnapproachtoIMprogrammes.Anillustrationofhow theIMprocesswasappliedtoafor-profiteducationalinstitutionis providedinthenextsection. Applying the IM model Proofofanymodelisitsmarketplaceperformance.Theuseofthe integratedIMmethodologydiscussedinthispaper,whilestillunder development,hasbeenusedinsomeapplicationsintheUSA.Onesuch experienceforaUS-basededucationalserviceproviderisdescribed 120 &HENRY STEWART PUBLICATIONS 1463-5178. Interactive Marketing. VOL.6 NO.2 PP111–129.OCTOBER/DECEMBER2004
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