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Project Report on Internal Customer Satisfaction



Customer is the king, this is all the more apt for today's business environment where, all other factors remaining more or less constant, it is the value addition to the customer that is making all the difference.

Customer satisfaction depends on the performance relative to a expectations.

A key premise in customer satisfaction is understanding the needs and meeting or exceeding the expectations of customers. Further more, this is done while optimally using resources. While most companies have developed strategies to improve quality and external customer service, internal customer satisfaction is a much neglected component of quality improvement. To this end, it is important to emphasize that total customer satisfaction can be attained only if all employees devoted to external customer satisfaction  can work together and assist each other to achieve the common objective, when the internal customer isn't satisfied, Relationships with the external customer suffer. So, it is suggested to adopt customer oriented approach to keep the internal customer satisfied and motivated, who in turn will focus their attention and energy upon meeting the requirements of their customers, thereby maximizing the customer, thereby maximizing the customer satisfaction.

Customer satisfaction survey is the process to monitor the satisfaction quotient of their people. In internal satisfaction surveys therefore tracks the return on your investments in keeping your people happy, high salaries, a quality culture, a healthy work environment.

Last, but not the least  internal customer satisfaction survey helps in finding the critical areas, which need further improvement.

Need of Internal Customer  Satisfaction Survey arises due to following reasons.

Ø      Rapidly growing organization.

Ø      High or growing turnover rate.

Ø      Excessive rumor's

Ø      Highly competitive industry.

Ø      Planned and recent organizational changes.



Ø      It creates better teamwork and much improved work process.

Ø      It leads to higher output and superior quality product.

Ø      It decreases the turnover.

Ø      Reduced overheads, and increase customer satisfaction level's inter departmental.

Ø      It enhance communication and hence helped in team building, hence there is less wasted effort caused by lack of common purpose and poor communication.

Ø      A good employee feedback survey improves employee attitude and boosts morals.


In an organization, from procuring an order to delivering the final product, a series of activities takes place. There are different deptts. To which these activities are assigned eg. Raw material for production is purchased by one deptt. And supplied to other deptt. Where the production initiates. Thus every deptt. play an important role of  a customer and supplier as well.

          The importance of a customer is well known from the maxim, “ Customer is the king”. Earlier, organizational administrators concentrated only on the satisfaction of external customers i.e. the target market. But now it is being realized that if the internal customer is satisfied the quality as well as the quantity is also appreciable. Higher the customer satisfaction index, higher will be the quality of the production. This results in the satisfaction of external customers and ultimately brings profits & prosperity to the organization. It can benefit the organization in following ways:-

1)     There will be less employee turnover.

2)     Optimum utilization of available resources will take place.

3)     High job satisfaction and feeling of belongingness in employees.

4)     Qualitative product.

5)     Least conflicts in the departments.

6)     Good reputation in the market and many more benefits can be accrued.

Thus, every deptt. should ensure that the customer deptt. is satisfied with the product and services provided by it as it will result into an overall improvement of the organization.

Internal Marketing, External Marketing, Interactive Marketing, Employees, Customers Relationship Figure

To serve a final customer first of all a company has to satisfy his employees. If employees are satisfied then they will ultimately satisfy the final customer. Three types of marketing arises. These are a follows:-

1)     Internal marketing:

It is defined as when company communicates its policies to the employees. In this    understands their employees & provides good working condition, compensation and incentives so as to satisfy their employees. Company satisfy their employees because they are the person in touch with the final users.

2)     External marketing:

When company communicates with its final end user regarding the product complaints & suggestions so as to satisfy them.

3)     Interactive marketing:

In this employees communicate company product to its final end users.


Today’s companies are facing their toughest competition ever. These companies can outdo their competition if they can move from product and sales philosophy to a marketing philosophy. We spell out in detail how companies can go about winning customers and outperforming competitors. The answer lies in doing a better job of meeting and satisfying customers needs. Only customer-centered companies are adept at building customers, not just building product. They are skilled in market engineering, not just product engineering.

          Too many companies think that it is the marketing/sales department’s job to procure customers. If that department cannot, the company draws the conclusion that its marketing people aren’t very good . but in fact, marketing is only one factor in attracting and keeping customers. The best marketing department in the world cannot spell products that are poorly made or fail to meet anyone’s need. The marketing department can be effective only in companies whose various departments and employees have designed and implemented a competitively superior customer value-delivery system.

          Although the customer oriented firms seek to create high customer satisfaction, its main goal is to maximize customer satisfaction ,first the company can increase customer satisfaction by lowering its prices, but results may be lower profits second the company might be able to increase prices. Third the company has many stake-holders including employees, dealers, suppliers and stock holders spending more to increase customer satisfaction might divert funds from increasing the satisfaction of other partner. Estimate the company must operate on the philosophy that it is trying to deliver a high level of satisfaction to the other stake-holder within the constrains of its resources. From the past studies of last three decades we observed that the company’s first task is to create and satisfy customers. But today’s customers face a vast array of product and brand choice prices and suppliers.

          It is generally believed that customers estimate which offer will deliver the most value customers are like value maximizes, within the bounds of search costs and limited knowledge, mobility income, they form an expectation of value and act on it, whether or not the offer lives up to the value expectations affects customer’s satisfaction and their repurchase probability.


Customer delivered value is the difference between the total customer value and total consumer cost. Consumer value is the bundle of benefits customers expect from a given product or service. Total consumer cost it the bundle of costs consumer expect to incur in evaluating, obtaining and using the product.

          That two customers can report being “highly satisfied” for different reasons. one may be easily satisfied most of the time and other might be hard to please but was pleased on this occasion. Companies should also note that managers and salespeople can manipulate their ratings on customer satisfaction. They can be especially nice just before the survey. They can also try to exclude unhappy customers from the survey. Another danger is that if customers will know that the company will go out of its way to please customers, some customers may express high dissatisfaction (even if satisfied) in order to receive more concession.


          The value chain is a tool for identifying ways to create more customer value. every firm is a collection of activities that are performed to design, produce, market, deliver and support its product. The value chain identifies nine strategically relevant activities that create value and cost in a specific business. These nine value-creating activities consist of five primary activities and four support activities.


Marketing managers rely on internal reports on orders, sales, prices, cost, inventory levels, receivables, payables, and so on. By analyzing this information, they can spot important opportunities and problems.


           A marketing intelligence system is a set of procedures and sources used by managers to obtain everyday information about developments in the marketing environment. Marketing managers collect marketing intelligence by reading books, newspapers and trade publications; talking to customers, suppliers and distributors; meeting with other company mangers.

First, it can train and motivate the sales force to spot and report new developments. Sales representatives are positioned to pick up information missed by other means.

          Second, the company can motivate the distributors, retailers, and other intermediaries to pass along important intelligence.

Third, companies can collect competitive intelligence by purchasing competitors’ products; attending open houses and trade shows; reading competitors’ publishing reports; attending stockholders’ meeting; talking to employees, dealers, distributors, suppliers, and freight agents; collecting competitors’ ads; and looking up news stories about competitors on the internet.        


Sources of internal data are of two types:

1.     Internal or primary data

2.     External or secondary data.

Internal Sources

Company profit-loss statements, balance sheets, sales figures, sales call reports, invoices, inventory reports and prior research reports.

External Sources

A)   Government publications

B)   Periodicals and books

C)    Commercial data


Find the Next Chapter -Objectives, research, limitations, suggestions, bibliography, questionnaire ...........

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