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
Process Objective
Identify
Market Banks Achieve Employee
Employee
Products/ Strategies Involvement &
Needs/
to the Employees Satisfaction
Expectations

The Internal Marketing Concept

Genesis
Process Objective
Identify
Customer Manage Delivery to Achieve Customer
Needs/ the Customers Satisfaction
Expectations

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 cost-
effective & productive
Strategies For Closing GAP-3
Compete for
the Best
People

Be the
Preferred
IV. Retain the I. Hire the Employer
Best People Right People
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 customer-
participation, 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
o How they did it- functional quality of customer inputs
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
 Strategies For Enhancing
Customer Participation

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

Customer Mix
Manage the
 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-to-
customer encounters to enhance satisfying
encounters and minimize dissatisfying encounters.