A few months ago, we ran a column that discussed the complexities involved in defining the customer – especially as it relates to the B2B or B2B2C world. However, there's another customer that is becoming increasingly important to organizations – the internal customer.

Internal organizations that are pursuing internal customer relationship management (iCRM) include human resources (HR), finance, facilities management, supply chain management and information management.

All of these company divisions provide critical services to other employees – their internal customers. In fact, with the exception of accounts receivable, most of these departments have no contact with external customers. However, large companies are increasingly removing the mandates that employees must use internal organizations for all services. In fact, companies such as Sony allow business lines to choose whether they use shared services, develop their own expertise or go outside the organization for services such as HR, purchasing and contracting. With this increasing competition, internal organizations are now forced to consider CRM as a way to maintain their franchises. They are looking at CRM as a framework to demonstrate value and cement customer loyalty. Without CRM, many will find it very difficult to justify their existence long term.

The focus on this new internal customer is becoming especially evident within supply chain management (SCM) organizations for large companies. In fact, according to Ray Lewis, director of strategic planning for SCM at Sprint, "iCRM has recently emerged as a 'must do' competency for supply chains, especially 'e' and retail supply chains."

What is most important when implementing CRM for internal customers? Most organizations find that focusing first in these three areas is important:

  • *Understanding the customer.
  • Marketing and communications.
  • Providing easy access and ongoing status reporting.

Understanding the Internal Customer

Not unlike organizations focusing on external CRM, iCRM needs to start with a basic understanding of the customer. Departments that primarily serve internal customers usually think only in terms of organizational divisions when they discuss their customers. However, a CRM spin coupled with research and analysis helps staff to understand that there are common segments of customers that reach across traditional organizational boundaries. Looking at the recency, frequency and dollar values (usually costs) of common behaviors along with needs and attitudes helps to separate these internal customers into actionable segments – segments that require different levels of service and often- customized versions of products and services. In fact, just like external customers, it's often easy to pinpoint the top 15 to 30 percent of employees who consume 80 percent or more of the time and services (not to mention costs) of HR, IT, finance and SCM.

A Little Marketing Goes a Long Way

These organizations need to focus on the basics of traditional marketing, but with a CRM twist! IT is the one area of many organizations that has gotten much better in the last several years at marketing and selling their services – but those advancements have not come without a lot of pain. Because use of internal services is no longer mandated in many large organizations, IT, finance, HR and SCM are finding that they have to toot their own horns to ensure that their internal customers:

  • Know who they are. This is especially true for SCM groups that are proud to call themselves supply chain management, but don't realize that their customers still think of them as purchasing or supply.
  • Understand their products and services. Many internal service organizations have never taken the time to define their products and services – much less to do it from their customers' perspective. That means talking about the features and benefits of the specific services you provide, as well as your advantages over potential competitors.
  • Recognize the value proposition. CRM is all about an exchange of value. To ensure the loyalty of internal customers, organizations have to demonstrate and prove the value they are providing. The tangible product/service and the price is only part of the equation. Often, the real value added from the customers' perspective emphasizes other important factors such as convenience, ease of use, fast turnaround, support and quick problem resolution.

Marketing to internal customers isn't an event, but rather an ongoing process. Your internal customers may need ongoing training as well as communications. Just like marketing to external customers, internal service organizations should vary the frequency, the media and channels they use to communicate with internal customers based on their unique needs.

Easy Access and Status Reporting

It seems like common sense, but it is not easy to do business with many internal service organizations. Customers don't know the easiest way to reach them or how to work with what are often complicated processes. Internal organizations that have taken the time to map the touchpoints they have with their customers are often shocked to learn that there are literally hundreds of ways they touch customers. Additionally, the processes employed to interact with customers and provide services are often unduly complex. One of the easiest ways to enhance the overall customer experience is through simplification – simplifications that can result in significant cost reductions for the organization as well.

Satisfaction surveys continually report that the chief complaint among internal customers from shared services organizations is the lack of adequate status reporting. Internal organizations can significantly enhance the customer experience by establishing processes to provide ongoing status for frequent communication regarding outstanding orders, projects and problem resolution. Ideally, internal satisfaction surveys would not be necessary. Ray Lewis of Sprint SCM says, "We believe that embedded feedback is the most effective way to monitor and improve our interactions with customers. Customer feedback should be integral and captured at many points throughout the process."

Internal customers may not generate additional revenues in the same fashion as external customers; but for many organizations, they can help reduce costs. In many cases, these employees are the face of the company to external customers. Keeping them efficient, productive and happy is essential to creating positive experiences for external customers!

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