The purpose of this paper is to investigate the effects of internal marketing on customer loyalty and the mediating role of job satisfaction, affective commitment & organizational citizenship behaviour in their relationship. The analysis is based on a dyadic data set of front-end service employees and customers. It involves responses provided by the 150 dyads collected through quantitative self-administered questionnaires from telecommunication organizations of Pakistan. Findings demonstrate that internal marketing has a positive significant effect on job satisfaction, affective commitment and organizational citizenship behaviour. Furthermore, the theoretical model shows that organizational citizenship behaviour, affective commitment and job satisfaction act as mediators between internal marketing and customer loyalty. This study implies that IM is very beneficial and effective approach towards the customer positive behavioural outcomes such as customer loyalty.
The notion of internal marketing (IM) encompasses many of the human resource policies such as attracting, selecting, training, motivating, directing, evaluating and rewarding the employees [
Studies on the internal marketing pertaining to service industry revealed some interesting outcomes. Ahmed et al. [
The subject of relationship between customer-contact employees and customers has remained a focus of many researchers particularly relating to services industry [
The purpose of this study is twofold:
1) What is the relationship between internal marketing and customer loyalty?
2) Determine the mediating roles of job satisfaction, affective commitment and organizational citizenship behaviour in the relationship between internal marketing and customer loyalty.
Existing literature reveals that internal marketing is the most effective tool to enhance employee job satisfaction [
Harvard Business School (HBS) developed a term named, the “service profit chain”. Schlesinger & Zornitsky [
H1: Internal marketing has a significant positive effect on job satisfaction.
H2: Job satisfaction has a significant positive effect on customer loyalty.
H3: Job satisfaction mediates the relationship between internal marketing and customer loyalty.
It has been indicated in the previous study that the market orientation of a company is only significantly related to the affective dimension of the organizational commitment [
With the increase in attachment of employees with their organization, the chances of customer attachment also increases [
H4: Internal marketing has a significant positive affect on effective commitment.
H5: Affective commitment has a significant positive effect on customer loyalty.
H6: Affective commitment mediates the relationship between internal marketing and customer loyalty.
Many authors have mentioned various antecedents of Organizational Citizenship Behaviour; these include leader-member exchange [
Whatever activities employees perform in a service organization connect its organization to the customers [
H7: Internal marketing has a significant positive effect on organizational citizenship behavior.
H8: Organizational citizenship behavior has a significant positive effect on customer loyalty.
H9: Organizational citizenship behaviormediates the relationship between internal marketing and customer loyalty.
Kotze & Roodt [
H10: Job satisfaction has a significant positive effect on affective commitment.
Job satisfaction is positively associated with employee organizational citizenship behavior [
H11: Job satisfaction has a significant positive effect on organizational citizenship behaviour.
Telecom operators have company owned customer care centers which are also known as walk in centers to provide services to the customers. These services are delivered by the customer service officers known as CSOs who interact with the customers face to face. Only customer care centers are made part of this study because the HR and marketing policies of telecom organizations have direct impact on the jobs of CSOs as they are at company’s payroll whereas franchises and sales centers are excluded. The CSOs deal with the issues and problems that customers encounter while using the telecom network and other value added services, therefore they play very critical role in generating customer’s responses towards the service and organization. CSOs and the customers who avail services from them together are considered as the employee-customer dyad which is unit of analysis for this research. In order to test the proposed hypothesis, two self-administered questionnaires were developed to collect data from employee-customer dyad. This methodology has been previously used by various authors in their study of internal marketing [
was handed over the questionnaire and the customer who had just received service from that CSO was selected to gather the data. For every CSO, only one customer was selected and treated as one observation. In total, 150 observations were collected from those employees and customers who have been providing and availing the services for at least last one year. Among CSOs, the population break out on the basis of gender was 62.7% male and 37.3% female. The customer population breakout on the basis of gender was 74.7% males and 25.3% females. In females, the customers were mostly housewives. Whereas males belong to different backgrounds such as college or university students, jobholders, businessmen and professionals like lawyers, and doctors.
All measures employed in this research work were based on the in-depth study of services marketing literature. Seven points likert scale was used with anchors of strongly agree (1) and strongly disagree (7). The CSO’s provided evidence for the four constructs which are internal marketing, job satisfaction, affective commitment and organizational citizenship behavior where as customers reported on customer loyalty construct. The internal marketing scale is adapted from the research by Foreman and Money [
CFA was applied confirmed four constructs comprised of 40 items having on extraction (AVE) and Cronbach’s Alphas above the recommended points [
AHP introduced by Wind and Saaty [
IM | JS | AC | OCB | CL | ||
---|---|---|---|---|---|---|
IM | Pearson correlation | 1 | ||||
Sig. (2-tailed) | ||||||
N | 150 | |||||
JS | Pearson correlation | 0.679** | 1 | |||
Sig. (2-tailed) | 0.000 | |||||
N | 150 | 150 | ||||
AC | Pearson correlation | 0.626** | 0.635** | 1 | ||
Sig. (2-tailed) | 0.000 | 0.000 | ||||
N | 150 | 150 | 150 | |||
OCB | Pearson correlation | 0.500** | 0.528** | 0.498** | 1 | |
Sig. (2-tailed) | 0.000 | 0.000 | 0.000 | |||
N | 150 | 150 | 150 | 150 | ||
CL | Pearson correlation | 0.127 | 0.005 | 0.034 | 0.036 | 1 |
Sig. (2-tailed) | 0.120 | 0.000 | 0.000 | 0.000 | ||
N | 150 | 150 | 150 | 150 | 150 |
*IM = internal marketing, JS = job satisfaction, AC = affective commitment, OCB = organizational citizenship behavior, CL = customer loyalty.
Relation | Estimate | S.E. | p value | Results | |||
---|---|---|---|---|---|---|---|
Job satisfaction | Internal marketing | H1 | 1.077 | 0.095 | *** | Supported | |
Customer loyalty | Job satisfaction | H2 | 0.097 | 0.097 | 0.004 | Supported | |
Affective commitment | Job satisfaction | H4 | 0.322 | 0.067 | *** | Supported | |
Affective commitment | Internal marketing | H5 | 0.474 | 0.106 | *** | Supported | |
Customer loyalty | Affective commitment | H6 | 0.167 | 0.109 | 0.033 | Supported | |
Organizational citizenship behavior | Job satisfaction | H8 | 0.203 | 0.064 | 0.002 | Supported | |
Organizational citizenship behavior | Internal marketing | H9 | 0.324 | 0.102 | 0.001 | Supported | |
Customer loyalty | Organizational citizenship behavior | H10 | 0.011 | 0.118 | *** | Supported |
Linear regression analysis was performed using IBM AMOS edition 19 that helped in finding the link between dependent and independent variables [
H1 is “internal marketing has a significant positive affect on job satisfaction.” Results suggest that there is highly significant relationship between internal marketing and job satisfaction with p value = 0.00. Hence it supports H1. These findings are consistent with the findings of many authors [
Mediating variables | Relation | Estimate | S.E. | C.R. | p | Indirect effects | ||
---|---|---|---|---|---|---|---|---|
JS | IM | 1.077 | 0.095 | 11.281 | *** | |||
Job satisfaction | CL | JS | 0.208 | 0.135 | 2.545 | 0.024 | ||
CL | IM | 0.473 | 0.214 | 2.209 | 0.007 | 0.021 | ||
AC | IM | 0.821 | 0.084 | 9.805 | *** | |||
Affective commitment | CL | AC | 0.113 | 0.155 | 2.728 | 0.016 | ||
CL | IM | 0.341 | 0.203 | 1.681 | 0.033 | 0.026 | ||
OCB | IM | 0.543 | 0.077 | 7.039 | *** | |||
Organizational citizenship behavior | CL | OCB | 0.166 | 0.168 | 3.392 | 0.010 | ||
CL | IM | 0.284 | 0.183 | 1.555 | *** | 0.015 |
*IM = internal marketing, JS = job satisfaction, AC = affective commitment, OCB = organizational citizenship behavior, CL = customer loyalty.
that promote internal marketing in order to maintain a pool of satisfied employees. Rigorous recruitment & selection, strong superior-subordinate communication, long term focus on the training and development of the employees, employee recognition through rewards, employee participation and empowerment etc. are the various internal marketing tactics employed by telecoms service providers in Pakistan. These results thus imply that such internal marketing efforts promote job satisfaction among customer service employees.
H2 is “job satisfaction has a significant positive affect on customer loyalty.” Results suggest that there is highly significant relationship between job satisfaction and customer loyalty with p value = 0.04. Hence it supports H2. The results indicate that customer service employees who are satisfied with their jobs tend to render services in a manner that improve their work performance. With improved levels of work performance, they would be able to meet the customer expectations in the best possible manner which is regarded by customers in terms of their loyalty towards the organization.
H4 is “job satisfaction has a significant positive affect on affective commitment.” Results suggest that there is highly significant relationship between job satisfaction and affective commitment with p value = 0.00. Hence it supports H4. Lumley et al. [
H5 is “internal marketing has a significant positive affect on affective commitment.” Results suggest that there is highly significant relationship between internal marketing and affective commitment with p value = 0.00. Hence it supports H5. Giving employees a vision to believe in, investing in their development and rewarding them for their efforts i-e practicing internal marketing develops very affirmative feelings for the organization among employees as they feel valued and more respected. These positive feelings build an emotional connection between the employees and organization that ultimately leads to long-term emotional commitment referred as affective commitment in this study.
H6 is “affective commitment has a significant positive affect on customer loyalty.” Results suggest that the relationship between affective commitment and customer loyalty is significant with a p value = 0.033. Hence it supports H6. Allen & Girsaffe, [
H8 is “job satisfaction has a significant positive affect on organizational citizenship behavior.” Results suggest that there is highly significant relationship between job satisfaction and organizational citizenship behavior with p value = 0.02. Hence it supports H8. These results are in line with the findings of Bateman and Organ [
H9 is “internal marketing has a significant positive affect on organizational citizenship behavior.” Results suggest that there is highly significant relationship between internal marketing and organizational citizenship behavior with p value = 0.01. Hence it supports H9. These findings are consistent with the findings of Seyed Javadin [
H10 is “organizational citizenship behavior has a significant positive affect on customer loyalty.”Results suggest that there is highly significant relationship between organizational citizenship behavior and customer loyalty with p value < 0.00. Hence it supports H10. Employees who exhibit organizational citizenship behavior make more efforts than are expected of them and therefore it is logical that they outperform in their efforts to serve the customers. When customers observe that customer service employees are making greater efforts in delivering the services, they become pleased and intend to persistently receive the services from the same service provider thus becoming loyal.
This analysis helped to find the significance of relationship between the independent and dependent variable.
The direct effect between internal marketing and customer loyalty is significant having p value = 0.007 and the indirect effect of internal marketing on customer loyalty through job satisfaction has a p value = 0.021 which is significant. It proves the meditational effect of job satisfaction between internal marketing and customer loyalty. Hence it proved H3. These results suggest that the effects of internal marketing transfers to customer loyalty via job satisfaction i-e if the level of job satisfaction is higher among employees than internal marketingis more likely to enhance the loyalty among customers and vice versa. Any variations in the level of employee job satisfaction will vary the effect of internal marketing efforts on customer loyalty. For example, if customer
Mediating variables | Relation | Estimate | S.E. | C.R. | p | Indirect effects | ||
---|---|---|---|---|---|---|---|---|
JS | IM | 1.077 | 0.095 | 11.281 | *** | |||
Job satisfaction | CL | JS | 0.208 | 0.135 | 2.545 | 0.024 | ||
CL | IM | 0.473 | 0.214 | 2.209 | 0.007 | 0.021 | ||
AC | IM | 0.821 | 0.084 | 9.805 | *** | |||
Affective commitment | CL | AC | 0.113 | 0.155 | 2.728 | 0.016 | ||
CL | IM | 0.341 | 0.203 | 1.681 | 0.033 | 0.026 | ||
OCB | IM | 0.543 | 0.077 | 7.039 | *** | |||
Organizational citizenship behavior | CL | OCB | 0.166 | 0.168 | 3.392 | 0.010 | ||
CL | IM | 0.284 | 0.183 | 1.555 | *** | 0.015 |
*IM = internal marketing, JS = job satisfaction, AC = affective commitment, OCB = organizational citizenship behavior, CL = customer loyalty.
service employees are satisfied with some aspects of their job (such as pay and promotion) and dissatisfied with other aspects (such as supervisor), then it will lead to variations in the level of job satisfaction. Under such conditions the effect of internal marketing on customer loyalty will also vary accordingly.
The second proposed mediating variable between internal marketing and customer loyalty was “affective commitment.” The direct effect between internal marketing and customer loyalty is significant having p value = 0.033 and the indirect effect of internal marketing on customer loyalty through affective commitment came out has p value = 0.026 which is significant. It proves the meditational effect of affective commitment between internal marketing and customer loyalty. Hence it proved H7. These results indicate that the impact of internal marketing transfers to customer loyalty through affective commitment. The employee who feels a sense of belonging towards the organization is more likely to be pleased with the internal marketing practices carried out in the organization and this emotional bonding of employee towards his organization leads him to perform in better way that result in customer loyalty. Thus employee affective commitment plays a role in reaping the benefits of internal marketing in the form of customer loyalty.
The third proposed mediating variable between internal marketing and customer loyalty was “organizational citizenship behavior.” The direct effect between internal marketing and customer loyalty is significant having p value = 0.033. The indirect effect of internal marketing on customer loyalty through organizational citizenship behavior has p value = 0.015 which is significant. It proves the meditational effect of organizational citizenship behavior between internal marketing and customer loyalty. Hence it proved H11. These results suggest that the effects of internal marketing transfer to customer loyalty via organizational citizenship behavior i-e if employees exhibit organizational citizenship behavior than internal marketing will affect customer loyalty to greater extent. The prominent logic behind this relationship is that when organizations go an extra mile in their efforts to please employees, the gratified employees in return go an extra mile in their efforts to serve the customers even if they have to perform beyond their formal expected role. Employees who exhibit organizational citizenship behavior will be gladly willing to give extra hours to work, overachieve in delivering services to the customers, offer help to the coworkers etc. Thus, internal marketing is an effective approach in making customers pleased and loyal when customer service employees exhibit organizational citizenship behavior.
Every telecom organization in Pakistan has company owned customer care centers where customer care employees (also known as customer service officer or CSO) deliver services to the customers. CSOs directly interact with the customers and therefore play very critical role in generating customer responses towards the service proving organization. Realizing CSOs role importance, telecom organizations are indulged in internal marketing practices to keep its employees happy as study supports that the happiness of service employees leads to the happiness of customers [
In telecom sector of Pakistan where the experienced telecom organizations are indulged in internal marketing, the present study would offer some very useful insights. The results have shown that when a telecom organization made an investment in internal marketing, the pleased CSOs become highly satisfied with their jobs. High job satisfaction enhances their job performance and they deliver services in more efficient and effective manner. The effect of internal marketing varies towards the development of customer loyalty because of the variations in the level of employee job satisfaction. For example, if CSOs are satisfied with some aspects of their job (such as pay and promotion) and dissatisfied with other aspects (such as supervisor), then it will lead to variations in the level of job satisfaction. Under such conditions the effect of internal marketing on customer loyalty will also vary accordingly. CSOs who are highly satisfied with their jobs also become affectively committed towards the organization and exhibit organizational citizenship behavior. Internal marketing also contribute towards the employee affective commitment and organizational citizenship behavior. If a CSO is emotionally attached to the organization, he engages himself in such behaviors and activities that benefit the organization. His emotional feelings towards the organization reflect on his concern towards the organizational performance and he delivers services in a manner that please customers who in turn develop loyalty. The effects of internal marketing thus move towards customer loyalty via affective commitment. Similarly the effect of internal marketing transfers to customer loyalty via organizational citizenship behavior i-e if employees exhibit organizational citizenship behavior than internal marketing will affect customer loyalty to a greater extent. It has been suggested that when telecom organizations go an extra mile in their efforts to please employees, the gratified employees in return go an extra mile in their efforts to serve the customers even if they have to perform beyond their formal expected role. CSOs who exhibit organizational citizenship behavior will be gladly willing to give extra hours to work, overachieve in delivering services to the customers, offer help to the coworkers etc. Thus, internal marketing is an effective approach in making customers pleased and loyal when CSOs exhibit organizational citizenship behavior. Any variations in the level of organizational citizenship behavior among CSOs will vary the effect of internal marketing on customer loyalty. These complex relationships drive together in the same direction influences the customer loyalty among customers.
Managerial ImplicationsThis study is significant for telecom service providers as it give insights about the organizational variables that play critical role in making customers’ loyal. It suggests that internal marketing is very beneficial and effective approach towards the customer relevant behavioral outcomes in service organizations. The managers should devote special attention and resources towards the implementation of internal marketing in customer care centers as those employees who are highly satisfied with their jobs, affectively committed towards the organization and exhibit organizational citizenship behavior provide services in a way that please the customers. The pleased and gratified customers in turn become loyal towards the organization. Thus, managers must keep in mind that satisfied and affectively committed employees who exhibit organizational citizenship behavior may lead towards the customer loyalty.
This research work has been carried out in the customer care centers of telecom service providers in the main cities of Pakistan. Future research of the same type can be done in other service industries such as hotel industry, banking sector, courier service etc. Organizational citizenship behaviors are evaluated by asking the employee themselves and this approach might have influenced the relationships between studied variables. Relational variables such as relationship strength and relationship quality between the service exchange partners can be added in the existing model to observe their impact on the relationship between internal marketing and customer loyalty. The results of this study suit the cultural values and economy of Pakistan. The results may vary from culture to culture and economy to economy in other countries.