The Underestimated Value of Internal Marketing: Impact on Employee Satisfaction and Customer Satisfaction through Organisational Restructure

Abstract

Internal Marketing, a long-debated concept amongst academics and practitioners, is suggested to be a competitive advantage to organisations that utilise its practices. Often dismissed as merely selling the marketing of a product or service to employees within an organisation, Internal Marketing encompasses a combination of the key elements of communication, training, and feedback in order to create motivated, customer-orientated employees. Through employees and managers working together towards a well communicated organisational cause of Internal Marketing, internal procedures can evolve to better service and satisfy customers.

Organisational restructures are an ongoing concern as technological advances, value-adding business process, and globalisation change the way that businesses run and operate. In order to save on costs of operations, employment, and office rental space, downsizing an organisation may initially present itself as a cost-saving practice. Often unconsidered are the front-line customer-facing employees and customers of an organisation. Employees may feel distraught and concerned about losing their job, or having to find a new job, which may affect customer service, and subsequently customers may face the brunt of the domino effect, either intentionally or unintentionally, due to employees’ emotional disconnection from the organisation.

This research is an exploratory study into Internal Marketing, specifically around an organisational restructure, to better understand its impact on employees and customers through different stages of a restructure. Through the use of online surveys, participants were asked to recall an organisational restructure they were involved in within the last five years. They were asked to report their perceptions of Internal Marketing, their own satisfaction with their job at the time, and their perceptions of Customer Satisfaction throughout different stages of the organisational restructure.

The analysis found that Internal Marketing does have a significant positive relationship with Employee Satisfaction both during and after an organisational restructure. Although no significant relationship was found between Employee Satisfaction and Customer Satisfaction at any stage of the restructure, there is a trend within the data suggesting that the relationship may be stronger before and after an organisational restructure.

Benefits and contribution of this research for academics include development of a conceptual model, as well as the benefits and effects of Internal Marketing, and extending the existing literature. For practitioners, benefits include insights into better understanding of the role of Internal Marketing. Specifically, the differences in perception of the practice between employees and managers, and why it is important to understand and address Employee Satisfaction and Customer Satisfaction during an organisational restructure.