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Optimising the Internal Value Chain
Principles and practices
Mark T Spence
Associate Professor of Marketing, Bond University, Gold Coast QLD
Sudhir H Kale
Professor of Marketing; Associate Director, Globalization and Development Centre, Bond University, Gold Coast QLD
Abstract
The employee-customer interface in hedonic services requires high quality interactions at key touch points to ensure experiences are positively remembered. We propose an approach that combines service blueprinting with internal marketing to achieve these experiences. While internal marketing suggests using marketing techniques for hiring, retaining and motivating employees, the literature in this field has been largely independent of each employee’s contribution to the internal value chain.
Service blueprinting is a useful approach which makes explicit the value creation processes used in service production. No study has thus far connected the blueprint (which identifies functions to be performed) to internal marketing (which specifies the mechanisms for hiring, retaining and motivating the people performing the functions).
This paper proposes a service value chain optimisation framework to enhance employee–customer interactions in hedonic services using these two research streams.
Keywords
internal value chain, moments of truth, internal marketing, service blueprinting
Article Text
The gist of the marketing concept is twofold: satisfy your customer and garner a sustainable, competitive advantage. Within the service sector, the primary drivers affecting customer satisfaction - and the profits that follow - are the physical environment and service personnel (Bitner 1992; Booms & Bitner 1982; Zeithaml, Bitner & Gremler 2006). When reconstructing memories of affect-laden experiences, as would likely be the case when considering returning to, for example, a beauty parlour or theme park, holistic memories are heavily influenced by the most extreme experience recalled as well as the last experience encountered (cf Fredrickson & Kahneman 1993; Kahneman, Fredrickson, Schreiber & Redelmeier 1993; Varey & Kahneman 1992). Therefore, smart organisations carefully manage employee-customer interactions to mitigate the possibility of an unfavourable encounter which could taint the overall experience.
Within this manuscript we advance the need to integrate two disparate streams of research - service blueprinting and internal marketing. The first focuses on identifying employee-customer interaction points and the concomitant elements in the internal value chain. Most existing literature on internal marketing starts with the supposition that the internal value delivery process (henceforth referred to as the internal value chain) is fixed, which is not accurate. Strategically, the first step in internal marketing should involve identifying and prioritising relevant value delivery processes with a view to streamline service operations, particularly if multiple touch points are involved in performing one function.
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Acknowledgements
The authors would like to thank the guest editor and two anonymous reviewers for their helpful and constructive comments on an earlier draft of this manuscript.
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