In our objectives to get, keep and grow customers, many companies often look within their own walls to build customer relationships. Especially in large companies with many product divisions, finding customers within the employee base can be an easy win. As customers themselves, employees can be great advocates for the company, as well as provide a closed loop view of the company-customer experience.
And meeting their specific needs can be easier than with other customers. After all, much of their demographic and financial information is already contained in internal databases. But as privacy concerns and attention to personal data grow, companies need to know how far they should go when marketing to employees.
There is no black and white. Except for disclosures related to financial data and health, U.S. law is left open to interpretation on this issue. But that does not mean that the practice of marketing to one’s own employees does not come with some risk — or reward. Employers are under increasing pressure to protect the privacy of their employees, adding that it may be the manner in which an employer goes about conducting such campaigns that determines right or wrong. As an employer, you need to ensure that the employee does not have a different expectation of privacy [than you do]. The way you do that is to have a policy, outlining the ways in which a company may use an employee’s personal information.
While there is currently no specific law in this area, we would not be surprised to see cases that bring the issue into clearer focus in the near future.
Philip Gordon, chair of the privacy practice group employment and labor law firm Littler Mendelson, offered that the issue is more clear-cut outside the U.S. “If the employer is marketing to employees in the E.U., Canada, Australia, etc., there definitely would be issues of notice, consent, and legitimacy of processing,” Gordon says. “These issues will vary somewhat by jurisdiction. The analysis is complicated by the fact that in many jurisdictions outside the U.S., an employer can not get valid consent from an employee”.
While on the bright side – One individual working with a large U.S. insurance firm, who asked to not be identified, says the practice is common within the company and that, while controls on the data used are strict, there are a number of benefits that make marketing to employees worthwhile.
In one case a marketing campaign was rolled out to employees prior to the general public, and the company was able identify an unforeseen, problematic outcome. Feedback from within the company was swift and the problem was corrected. The key to a successful internal marketing campaign is to give employees advanced notice and manage their expectations, he adds.
“The idea of using an employee base to test a campaign can be a very smart idea,” says Jason Bacharach, vice president of marketing with marketing and advertising firm GraficaGroup.
Bacharach says GraficaGroup has worked on internal marketing campaigns with a number of companies. As a third-party vendor, GraficaGroup’s work has primarily been with the strategy and creative end of such projects. They do not handle the HR data used to deliver the messages they help create.
“Our clients are uncomfortable with that,” Bacharach says, while quickly adding that there are many advantages to targeting employees as a distinct demographic group. He cites campaign testing, morale building, re-branding following a merger, even building positive word-of-mouth as examples.
“Employees can be great ambassadors for a company,” he says.
In highly regulated industries such as financial services and healthcare, there may be restrictions on the ways in which a product or service can be marketed to an employee group. Special discounts or targeted offers may cross legal lines, but a company may be able to use HR data to help an employee find a practitioner in his or her area who can offer the employee a product or service he or she wants.
At the same time applying the “The cultural web of an organization” (by Johnson and Scholes 1992) will be helpful to gauge and appreciate the perceived internal customer values before embarking on an internal customer relationship management marketing activities. Once understanding internal culture; applying I.D.I.C to create a lifetime value of your internal customer will be a great asset to managing your target internal customer effectively and with R.O.I in mind.