Internal Customer Service — Definition & Best Practices

"Internal customer service, is that a thing?" That was my thought when I first heard the term, and it seems to be the same for most people with an interest in service. "Is this something I should care about?"

The answer is “no”, if your only concern is micromanaging a customer service department — optimizing service processes, increasing satisfaction, decreasing costs, etc.

But it is something you should care about if you're interested in:

  • making your company more customer-focused at a fundamental level — something Gartner found 89 percent of companies are aiming for.
  • giving your customer support team "a seat at the 'adult' table".
  • increasing cross-departmental learning and collaboration.

What Is Internal Customer Service?

According to the BusinessDictionary, an internal customer is:

"An employee who receives goods or services produced elsewhere in an organization as inputs to his or her work."

Internal customer service, then, is about serving your employees. This is partly about spreading the values of customer service to the rest of the organization, but it's also about a fundamental shift in organizational philosophy — about making your employees the core of your operations.

Turning the Management Pyramid Upside Down

Shep Hyken made the connection between internal customer service and the management pyramid. The management pyramid is the traditional company structure. It has a strict top-down hierarchy. At the top of the pyramid is the fat, cigar-smoking director; at the bottom are the frontline employees as the direct line of communication to the customer.

an infographic of the traditional management pyramid.
The traditional management pyramid.

This article in HBR explains how the pyramid was developed in the early 1900's to manage the factories of the industrial revolution, and it's still the model for many companies today. But few of today's businesses still resemble those factories. In fact, this ancient pyramid results in companies that are the opposite of 'customer -focused'.

"If you’re not serving the customer, your job is to be serving someone who is."

Jan Carlzon

The shift to internal customer service basically turns the pyramid upside down.

At the top of the reversed pyramid are your customers. Their wants determine the actions of the rest of the company. The support department is the translator of these customer's needs, much like the personal assistant of the CEO. They act as "the voice of the customer", and translate their wishes to their colleagues.

an infographic of the new management pyramid, which allows for internal customer service.
The inverted management pyramid.

Everyone within the company is supported by their colleagues, with the end goal of serving the customer as well as possible. Top-down command turns into bottom-up support. Internal interactions are based on typical customer service values, like transparency, politeness, and empathy.

One famous company that successfully deployed this concept — without explicitly referring to it as internal customer service — is HCL Technologies.

The Case of HCL — Employees First, Customers Second

Internal customer service turned HCL Technologies, the India-based IT services company, into one of the fastest-growing and most profitable companies of its kind in the world.

the cover of the book employees first, customers second.

Vineet Nayar, CEO of HCL Technologies, explains that their approach developed after they recognized that the value creation of their company took place in the interface between their employees and their customers.

To optimize this "value zone", the Employees First Approach empowered those frontline employees to create the highest value possible. To this end, HCLT turned its organizational pyramid upside down.

"This has led us to take a number of actions to turn the organizational pyramid upside down. In other words, we want management to be as accountable to the people in the value zone as the people in the value zone are to management."

Vineet Nayar, CEO of HCL Technologies

In his book, Employees First, Customers Second: Turning Conventional Management Upside Down, Nayar explains that transparency was key to reinforcing this accountability for management. Some of their steps included:

  • Access to financial information. Employees received access to all of the company's financial information — the good and the bad.
  • 360-reviews for managers. Another was the start of a 360-review process on all managers, filled in by all employees that this manager influenced. Any employee that gave feedback also received access to the results of this 360 review.
  • Empowering frontline employees. The employees in direct contact with the customers received much more authority to answer questions, make decisions, and change processes. This increased HCLT's speed and quality of innovation in 'the value zone'.
  • The Value Portal. HCLT launched this system enabling all employees in the company to offer suggestions for change.

The mantra 'Employees First, Customers Second' may sound contradicting to the pyramid in which customers are on top of the food chain. But the point to take away is that by putting employees first, you increase the value for the customers.

How to Implement Internal Customer Service

Some actions to get started with internal customer service.

  1. Re-label your employees to 'internal customers'. Words matter. According to labeling theory, people will behave according to the terms that are used to describe. Paul Jun describes how the behavior of employees can be strongly influenced by their titles. Being a 'subordinate' or a 'manager' sounds very different than being an 'internal customer'. Stress that within your company, all employees are each other's customers.
  2. Restructure your company chart. The reversed pyramid by itself doesn't change much, besides stressing that the job of management is to support the employees. Visualizing this new approach with an actual reversed pyramid chart, and sharing it among your employees, has a similar self-fulfilling labeling effect.
  3. Ensure two-way accountability and transparency. Actions like those undertaken by HCLT reinforced the concept or reversing the pyramid, empowered frontend employees, and spurred the company to success.
  4. Offer communication training. In most companies, communication trainings are reserved for the customer service department only. To improve internal communication — or internal customer service — however, the entire company would benefit from trainings that focus on typical service values like transparency, respect, and managing expectations.
  5. Show the impact of every employee. Many employees don't fully realize how their contribution influences the bottom line. Making this more transparent, will make your employees realize who they're really working for: the customer. During our quarterly team evenings at Userlike, team members present about how their work impacts the bottom line.
  6. Provide a voice to everyone. Actions like HCLT's Value Portal allow employees from all ranks to offer ideas that bring the company forward. Providing ideas engages employees to think about the purpose and direction of the company, solidifying their emotional connection, and leading to fresh new ideas.

Smart companies realize that happy employees are the secret behind happy customers. Turn your company into a support structure for your frontend employees with internal customer service.


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