employess as customers

Trading places redux: employees as customers,customers as employees

Michael R. Bowers

Crummer Graduate School of Business, Rollins College, Winter Park, Florida, USA, and

Charles L. MartinW. Frank Barton School of Business, Wichita State University, Wichita, Kansas, USA

AbstractPurpose – The purpose of this conceptual paper is to show how a company can improve the interface by treating employees as customers andcustomers as employees.Design/methodology/approach – This article presents a conceptual model (reinforced with a review of extant literature and numerous examples)demonstrating the desirable consequences associated with the phenomenon we refer to as “trading places,” which occurs when organizations mix thetreatment and roles of employees and customers.Findings – Traditionally organizations have treated employees and customers as separate constituencies. Operations and human resource managershave developed their own approach to deal with employees (e.g. as “resources” to be utilized), while marketing managers have related to customersthrough somewhat different lenses (e.g. viewing customers as “prizes” to be won). Yet, in service organizations, we find that as employees assumemore customer-like roles and customers increasingly resemble employees, successful organizations are drawing from both approaches – treatingemployees more like customers, while treating customers more like employees.Practical implications – As a conceptual piece, this article presents an alternative way of thinking about organizations’ relationships with theiremployees and customers. Particularly relevant to service environments, it shows how organizations, employees, and customers all benefit when the“trading places” phenomenon is recognized.Originality/value – The article updates the “trading places” perspective by reviewing relevant literature, providing a conceptual model, andillustrating the application of the approach with numerous examples.

Keywords Internal marketing, Employees, Customer relations, Customer service management

Paper type Conceptual paper

An executive summary for managers can be found at

the end of this article.

In 1990 the original version of this article provided JSMreaders with a fresh perspective for managing the delicateinteraction between the customer and the contact employee in

service organizations (Bowers et al., 1990). We believed then,and continue to assert that the quality of the customer-

employee interface has a dramatic impact upon the perceivedquality and value of the services being offered, as well as on

customer satisfaction. A company can improve the interfaceby treating employees as customers and customers as

employees – a phenomenon we refer to as “trading places.”In the present article, we revisit the trading places

phenomenon, reconsider its relevance in today’s businessenvironments, review relevant literature published since 1990,

and examine how service organizations embrace and practicethe trading places phenomenon.

As every marketer of services knows, the interactionbetween consumers and contact personnel is of critical

importance. It is intuitively obvious that if contact employees

perform their jobs better, the quality of the interaction with

customers will likely be enhanced. Similarly, it follows that if

the customer somehow becomes a better customer – for

example, more knowledgeable – the quality of the interaction

will likewise improve. Since this article first appeared several

authors have empirically demonstrated that improving

customer and employee interactions, resulting in improved

satisfaction for both parties has significant positive

consequences for loyalty, profitability and the long-term

viability of the firm (Hsieh et al., 2004 Reichheld, 1996,

2001). Therefore, a company can influence service quality,

consumer satisfaction, and repeat purchase behavior by

focusing on the small dance carried out by the customer and

the contact employee.A variety of concepts and models have been proposed to

conceptualize and guide the management of the service

encounter. Not surprisingly, one school of thought has taken a

managerial perspective, focusing upon the role of the contact

employee within the context of the service system. Another

perspective focuses upon the participative and interactive role

of the customer. Through the development of a conceptual

marketing management model, this article will show how to

integrate the theoretical development associated with

The current issue and full text archive of this journal is available at

www.emeraldinsight.com/0887-6045.htm

Journal of Services Marketing

21/2 (2007) 88–98

q Emerald Group Publishing Limited [ISSN 0887-6045]

[DOI 10.1108/08876040710737859]

Received: October 2004Revised: August 2005Accepted: August 2005

88

managing contact personnel and encouraging consumer

participation[1]. The model illustrates that the behavioral

goals for both consumers and contact employees are similar.

Therefore external marketing activities may be transferred to

the internal market of employees, and internal managerial

techniques may be transferred to the external market of

consumers. The results of treating customers as employees

and employees as customers are expected to be lower cost and

higher quality of services provided, and ultimately higher

levels of satisfaction on the part of both employees and

consumers.

The model

The model proposed in Figure 1 suggests that traditional

marketing and management techniques are transferable to

both contact employees and consumers. Inseparability of

production and consumption is a recognized distinction of

services (Zeithaml et al., 1985). This means that both

consumers and contact employees are involved in the

production and marketing of the service. Therefore, as the

model illustrates, the behavioral goals for consumers and

employees are similar.Since the heart of the service company’s business is the

interaction with the customer, raising the quality of the

interface with the contact employee should raise the perceived

quality of the service. If the contact employees do their job

better, the quality of the interaction will be enhanced.

Likewise, if the consumer becomes a better, more

knowledgeable customer, the quality of the interaction will

be heightened and costs are apt to fall.Other benefits are likely to result from well-managed

interactions between customer and contact employee. For

example, customer loyalty to the service firm may increase as

Figure 1 Cultivation of interchangeable consequences through interchangeable marketing efforts

Employees as customers, customers as employees

Michael R. Bowers and Charles L. Martin


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the customer comes to believe the employee sincerely

understands the customer’s needs. Consequently, customersmay be apt to provide frank and useful feedback about their

needs and about the service organization’s ability to satisfythem. Well-managed interactions would also seem to foster a

more suitable fit or degree of compatibility between thecustomer and the service, the contact employee, and other

customers in the service environment. Last, customerinvolvement or level of psychological identification with the

service and with the service provider are also likely to result.Scrutiny of these desirable benefits reveals that they are also

applicable to contact employees. That is, management wantsservice employees to deliver high quality job performances; to

value their employment; to be satisfied with their jobs and

with the service organization; to be loyal to the firm and to itsprograms; to provide feedback to the customer and to the

organization; to be compatible with customers, otheremployees, and the organization; and to be involved with

the job and with the company.Rather than treating employees and customers as two

distinctly separate and unique groups, management shouldconsider merging historical philosophies toward dealing with

each. In other words, the management of the employee-customer interface may best be accomplished by treating

employees more like customers and customers more likeemployees.

Employees as customers

To point out the critical role that customer-contact employees

play in the delivery of service quality is neither a new norparticularly startling idea. For example, the idea was well-

documented in the 1980s by Berry et al. (1985), and byTansuhaj et al. (1988). Contact employees are service

marketers as well as service providers. How they interactwith customers is often more important than their skill in

delivering the service (Zeithaml et al., 1985). In a serviceorganization the customer-contact employees are the

company to the customer.What we believe has changed – or evolved – since 1990,

however, is the increasing recognition of the importance ofconsidering employees as an internal market to appeal to and

serve rather than merely a labor pool to be tapped.Accordingly, Berry and Parasuraman (1991, p. 151),

defined internal marketing as:

. . .attracting, developing, motivating, and retaining qualified employeesthrough job-products that satisfy their needs. Internal marketing is thephilosophy of treating employees as customers – indeed, “wooing”employees . . . – and is the strategy of shaping job-products to fit humanneeds.

Stemming from the employees-as-customers philosophy is thebelief that the attainment of multiple marketing objectives

hinges on the relationship between the organization and itsinternal (employee) market. For example, Peter Georgescu,

former President of Young & Rubicam advertising agencyobserves that, “[t]he quality of an organization’s products is a

reflection of how it treats its employees” (Georgescu, 1998,p. 293). Similarly, Lord Sieff, honorary president of Marks &

Spencer department stores asserts: “In the long run. . . nomatter how good or successful you are or how clever or crafty,

your business and its future are in the hands of the people youhire. To put it a bit more dramatically, the fate of your

business is actually in the hands of the youngest recruits on

the staff.” He goes on to say, “Our experience proves that apolicy of good human relations results in self-discipline, staffstability, good service to the customer, high productivity and

good profits in which we all share; employees, shareholders,pensioners and the community” (Cresswell and Leinster,1996, pp. 50, 82). At the extreme, some service leaders havegone so far as to suggest that addressing the needs of theinternal market is more important than a focus on externalcustomers. For example, Richard Branson, Chairman of theVirgin Group, suggests the following priorities:

Our first priority should be the people who work for the companies, then thecustomers, then the shareholders. Because if the staff are motivated then thecustomers will be happy, and the shareholders will then benefit through thecompany’s success.

Recent studies examining the formal relationships betweenemployee job satisfaction and marketing-relevant objectivesseem to support business leaders’ assertions. Perhaps mostilluminating is the positive link between employee jobsatisfaction and customers’ satisfaction and perceptions ofservice quality, i.e. employees who believe their companiestreat them fairly (unfairly) are likely to treat customers well(poorly) (Bowen et al., 1999). In a recent “Best Companies”study of large publicly-traded firms, companies with the mostsatisfied employees reported five-year ROIs (from 1999 to2004) 19 percentage points higher than the companies withaverage levels of employee satisfaction. Further, thecompanies with very satisfied employees also outperformedaverage companies in terms of employee turnover,absenteeism, and employee recruitment (Russell, 2004).

We believe this increased recognition of the critical natureof the internal market is driven, we believe, by at least threesets of interrelated sets of phenomenon:1 lackluster performance among many existing service

workers (suggesting low levels of skills, competenciesand motivation);

2 the slowing rate of growth of the labor force; and3 the increased diversity of the labor force.

Lackluster performance

There is evidence to suggest that many contact employeeslack the necessary skills or motivation to interact effectivelywith customers. For example, one study involving mysterycustomer audits of customer-contact employees in American

recreational facilities found that only 64.4 percent of theseemployees thanked the customer, only 17.2 percent madeproactive comments or suggestions, and only 20.7 percentasked or encouraged the customer to visit the facility again inthe future (Martin, 1987). Other researchers studiedconsumer dissatisfaction with professional services. Whenqueried as to the reasons for their dissatisfaction, unhappyconsumers most frequently mentioned the careless andunprofessional manner with which the service was provided,or said that they were treated more like an object than anindividua1 (Quelch and Ash, 1981). An obvious pragmaticoutgrowth of the internal marketing – employee-as-customer– philosophy is the intensification of corporate marketingefforts and resources directed toward these front-lineemployees.

Slow growth of the labor force

A slowing growth rate in industrialized countries’ labormarket increases the intensity with which growing firmscompete for a limited number of available workers. Already




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60 percent of large US firms report that they have difficulty

finding qualified job applicants with the right combination of

skills, and among smaller businesses, the problem is even

more acute (Theibert, 2000, p. 82). The phenomenon is

likely to become particularly problematic according to data

provided by the US Bureau of Labor Statistics. That is, the

rate of growth in the US labor force is slowing and is expected

to slow even more during the next several years. For example,

during the 1970s the annual growth rate averaged 2.6 percent.

For the 1990s, it was down to 1.2 percent, followed by a

projected rate of only 1.0 percent for the 2000 to 2015 period

and a mere 0.2 percent for 2015 to 2025 (CEDBR, 2002).

Increased diversity of the labor force

Although the overall growth rate in the labor market is

slowing, some specific demographic segments are growing at a

relatively faster rate, suggesting an increasingly diverse labor

force. In percentage terms, US Bureau of Labor Statistics

data indicate that workers of Asian descent are growing most

rapidly (40 percent for the decade), followed by Hispanic

workers (37 percent) and Black, non-Hispanics (20 percent).

Women are also entering the workforce at a relatively rapid

rate too; by 2008, the labor force participation rate for women

(ages 16þ ) is expected to climb to 61.9 percent, up from only

46.3 percent in 1975 (CEDBR, 2002). Especially as the

diversity of the workforce increases, service firms can not

assume that jobs, job roles, and specific job tasks will be

perceived in the same way across various groups of service

workers. Neither should it be assumed that workers’ needs in

the workplace will be homogeneous, nor their perceptions and

needs intuitively apparent to supervisors and managers. As

the workforce becomes increasingly more diverse, so increases

the need for service organizations to elevate the level of

sophistication by which they come to know and understand

their workers. Otherwise the effectiveness of employee-

targeted communications, training programs, and workplace

environments is likely to suffer – followed by declines in

productivity, job satisfaction, customer satisfaction, and the

inability to retain a stable workforce.

Continued relevance: employees as customers

Current research and comments from business leaders

suggests that the “employee as customer” perspective we

advocated in 1990 is more relevant in today’s service

environment. Employees represent an internal marketplace.

They consume products – their jobs. Marketing programs for

employees – with program components resembling those

directed toward traditional, external customers should be

developed. Marketing research tools can be used to identify

and learn about these internal customers, while segmentation

strategies, pricing techniques, and promotion may be used to

appeal to them (Berry, 1984; Berry and Parasuraman, 1991;

Gronroos, 1981, 1983; Tansuhaj et al., 1988).

Market research

It is common to engage in market research in order to gain

greater understanding of the consumer. The information

obtained is often used to segment the consuming market to

identify those subsegments that are most attractive to the

company. Market research may also be applied to employees

so that the firm becomes more familiar with their wants,

needs, and abilities.

Market research for hiring

A self-monitoring scale, as shown below, may be used toscreen job applicants for customer-contact positions (Snyder,1974).

Sample items from self-monitoring scale:. I guess I put on a show to impress or entertain people.. I would probably make a good actor.. In a group of people I am rarely the center of attention.. I am not particularly good at making other people like me.. Even if I am not enjoying myself, I often pretend to be

having a good time.. In order to get along and be liked, I tend to be what

people expect me to be rather than anything else.. I feel a bit awkward in company and do not show up quite

so well as I should.

The scale measures behavioral flexibility – an important traitfor customer-contact employees to possess. A behaviorallyflexible employee understands that every customer and everyservice situation is a little different, and he or she attempts tomodify encounters with customers accordingly. Such anemployee at an auto rental agency, for example, might displaya joyous, enthusiastic demeanor when chatting with a familyabout to embark upon their long-awaited annual vacation,and minutes later the same employee may shift into a soberlistening mode to deal with an irate customer whosemalfunctioning rental car left her stranded three miles fromthe nearest phone.

Market research for training and motivation

Marketing research tools may be used to help train andmotivate newly hired employees. One approach involves aform of disguised observation research: mystery customeraudits. For example, new bank or restaurant employees mayliterally become customers – visiting competing businessesand then completing audit forms. The findings are thencompiled and discussed as employees become sensitive to theexternal customer’s perspective. Or, an independent mysterycustomer may monitor and motivate each employee’s jobperformance, with prizes and recognition bestowed uponoutstanding customer-contact employees.

Factors that motivate employees change as employees growand mature in their jobs (Hall, 1976) – analogous to the waythe effectiveness of appeals to external customers may vary asthe customer-product relationship evolves over time (Martin,1986, 1998). Therefore, it is appropriate for management tostay attuned to how its work force is changing, in much thesame manner as the company seeks to track changes in itsexternal target markets. Means of conducting this researchmirror those used in market research, such as surveys.Increasingly, service marketers are relying upon attitude andopinion surveys to solicit input from employees (Folkman,1998a, b).

Market segmentation and job-products

From the results of the employee research, it may be possibleto develop and fine-tune job-products that are tailored todifferent employee segments, just as service products areaimed at different consumer segments. Flexible working hoursand cafeteria-style benefit packages represent two possibilitiesfor adjusting the job-product to meet the needs of differentemployee segments. A Virginia bank, for example, found that70 percent of its 950 employees are female, most of them ofchildbearing age. Their internal market research found:




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56 percent of its employees had difficulty locating quality

child care; 59 percent believed increased stress of working

mothers was attributed to childcare worries; 25 percent of the

working mothers had contemplated quitting work because of

childcare problems. The company’s solution was to become

one of the first employers in the USA to open an on-premise

daycare center. As a result of this company’s subsidized

employee benefit, employee turnover, absenteeism, and work

errors have declined, productivity and morale have improved,

and quality workers have been attracted (Trost, 1987).

Pricing: more than dollars and cents

From the employee’s perspective the price of the job-product

is the opportunities foregone because of the time spent on the

job. In other words, the employee pays for the job-product by

not spending his or her time playing golf, watching football,

or spending time with the children. The most obvious way to

offset the price of the job-product is to raise the pay. The

higher the wages, the easier it is for the employee to justify

working versus doing other things.

Incentive-based wages

The ideal approach to raising pay for customer-contact

employees is to tie compensation as directly to performance as

possible, rewarding customer- and quality-conscious

employees and thereby also motivating other employees to

improve performance. For example, one chain of pizza

restaurants in the USA recognizes this basic management

principle as well as the importance of the employee-customer

interface. Waiters and waitresses are given a pay raise after

they have learned the names of 100 loyal customers.

Recognition as a reward

One major disadvantage of raising wages is that it also tends

to raise costs, which in turn inflates the prices that external

customers must pay – thus hindering the effort to build value

into the service. Fortunately, there are cost-efficient, non-

monetary alternatives available to reward employees.Recognition is a key element to treating employees as

customers. Most well-run service organizations recognize that

customers are special people, to be treated with respect and

courtesy. This attitude serves the organization well when it

comes to handling employees. Positive, continuous

recognition of superior performance, which takes place in

front of the employee’s peers and colleagues, offsets the price

of the job-product. People like to spend time doing what they

do well and they like being recognized for doing so.A second purpose is served as well. The attitude and style of

the company as it deals with consumers may be

communicated through recognition programs. Not only the

individual employee motivated through recognition, but that

employee’s co-workers are provided with an illustration of

what the organization considers to be exemplary performance.

By offering praise in a formal ceremony, by making a “big

deal” out of it, the organization is able to manage by symbol

and example. For example, restaurant patrons may be

introduced to the “amazing culinary team” (Saddler, 1986)

or given the opportunity to view “Employee of the Month”

plaques prominently displayed on the premises. The contest

not only rewards employees and heightens their service

consciousness, but it also reminds patrons of the quality

service the restaurant is trying to provide.

Job promotion as a reward

Another effective form of recognition are job promotionswhich serve the dual purpose of recognizing employees while

simultaneously giving management an opportunity toreinforce organizational values and communicate “what it

takes to get ahead around here.” Unfortunately, a couple of

interrelated drawbacks of using promotions as rewards arebecoming increasingly apparent in many service

organizations. First, the availability of promotions isfrequently limited; as one climbs the organizational ladder,

fewer spots are available. It may not be possible to promoteeveryone management would like to promote. Second,

technically competent workers are often promoted intosupervisory or managerial positions that require different

skill sets for which workers are not well-suited. In his book,The Spirit to Serve, Bill Marriott, Jr, Chairman and CEO of

Marriott International (hotels) expresses his concern aboutthis phenomenon (Marriott and Brown, 1997). He challenges

the assumption that promotions should necessarily involve amanagerial track. As an example, he asks why a housekeeper

who loves her job and excels at it should be required toabandon those skills in order to get ahead. Doing so may not

be in the best interest of the employee or the organization.Thus, Marriott has developed alternative – non-managerial –

promotional tracks that reward employees for theircompetencies. Marriott’s approach to using multiple career

ladders would seem to be particularly appropriate whentechnical skills required in the job are quite different from

managerial skills required in supervisory positions, and whenthe growth of the service organization is slow or nonexistent

(thus creating few traditional promotion opportunities).

Marketing communications

It is as important to attract competent people and persuadethem to work for a company as it is to attract customers and

persuade them to purchase the service. Advertising, personalselling, trade shows, newsletters, and other forms of

marketing communications are frequently used tocommunicate with external consumers. These tools can be

equally effective when aimed at internal consumers –employees.

Once good people have been brought into the organization,efforts should be made to keep them. Messages that are aimed

at the external consumers should also communicate with thecontact employees (George and Berry, 1985). For example,

several hospitals feature their nurses, physicians, and othercustomer-contact staff in advertising. These people relate in

their own words what their job involves and the intrinsic

rewards they receive through interaction with the patients andtheir families. The message communicated to potential

patients is that these institutions are warm and caringplaces, but the ads also reinforce the mission and purpose of

the hospital to employees and heightens their sense of self-worth.

Southwest Airlines communicates service values with itsworkforce by involving employees in additional ways. For

example, customer-contact employees at all levels in theorganization submit customer service essays – stories of

actual customer service experiences that demonstrate thecreativity and commitment SWA employees use to deliver

great service. The experiences are published in a customerservice manual distributed widely throughout the

organization. Not surprisingly, the manual accomplishes




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multiple objectives: it recognizes outstanding service

employees for their contribution; it communicates theorganization’s service values to both new and existing

employees (because the manual is updated periodically, thenew additions to the manual continue to reinforce these

values); and because the essays are written by real workersinvolved in real experiences (i.e. not hypothetical or

theoretical service experiences), their credibility is perceivedto be high among readers.

Of course, more traditional forms of internalcommunications have been used for years, are still widely

used, and can be effective tools. For example, AmericanExpress was the first service organization to use regularly

published internal newsletters to communicate with

employees, which they began publishing in 1916 (Martin,2007). Feature stories in the first issue of American ExpressService talked about personal accountability, commitment andthe important roles that employees play throughout the

company:

A merchant selling shoes must depend for his business upon the quality ofthe shoes themselves, whereas an institution such as the American Express,selling service, must depend upon the quality of its [employees] . . . Upon thecombined way in which each of us shoulders this responsibility, depends thesuccess of the Company in merchandising its service.

Of course, these themes remain relevant and are worthrepeating to new generations of service employees.

Soon after American Express began publishing itsnewsletter, other service organizations followed. For

example, the first issue of Britain’s Midland Bank staffnewspaper (published in 1920) summarized its purpose as

follows: “It will be the object of the Magazine . . . to promotemutual confidence between the Management and the Staff,

and to foster and maintain that atmosphere of good will andsweet reasonableness in which alone the permanent interests

of both can be advanced” (Hughes, 2000, p. 20). Morerecently, a review of three British studies found that between

41 and 53 percent of firms use “internal newsletters,”“internal newspapers,” or “house organs” to communicate

with employees on a regular basis (Hughes, 2000, p. 20).

Customers as employees

Because consumers are involved in the production of theirservice, they are often partially responsible for the quality of

the service provided (Goodwin, 1988; Mills and Morris,1986). The patient must be able to tell the physician “where it

hurts” and the tourist must be able to communicate his or hertravel preferences to the travel agent. Neglect or

misinformation on the consumer’s part may lead todissatisfaction with the service and a perception of poor

value. However, if the customer’s participative role is properlymanaged, several specific benefits maybe realized. Time,

control over the situation, and the efficiency of doing ityourself have been found to be important to those consumers

preferring high levels of participation (Langeard et al., 1981).Consumers may find that they enjoy participating, thereby

minimizing the boredom and anxiety that might otherwiseaccompany waiting periods. Participation promises to raise

the consumer’s level of knowledge regarding the service –hence a greater appreciation of the service and of the service

provider’s efforts. Consumer participation also oftenfacilitates smooth operations and the possibility of lower

costs. Therefore, the net effect of customer participation is the

potential generation of the desirable consequences previouslyenumerated in the model: quality, value, satisfaction, loyalty,feedback, compatibility, and involvement.

A process of consumer participation

Of course these benefits and desirable consequences ofcustomer participation do not necessarily materializeautomatically. A three-step process is proposed to enhancethe likelihood of consumer participation:Step 1. Define the customer’s job.Step 2. Train the customer to perform his or her job.Step 3. Retain the valuable customer by rewarding the

customer for a job well done.

Discussed in greater detail below, these steps to manage thecustomer parallel those that might be used to manage“traditional” employees.

The customer’s job: helping himself

The first step is to define the customer’s job. The job mayinvolve an externalization of the labor force; that is, customersmay be asked to produce part or all of the service themselves.Examples abound, as the inflationary era of the 1970s sparkeda trend toward more and more self-service enterprises. Todayit is commonplace for customers to engage in self-servicebehaviors. For example, 80 percent of gasoline is nowpumped by self-service consumers (Yergin, 1993). It is alsocommon for consumers to conduct their own bankingtransactions via automatic teller machines and clear theirown tables at fast-food restaurants. More recently, datasuggest that about one-third of airline passengers book theirtickets themselves (Reed, 2003); 40 percent of H&R Block’scustomers use the company’s self-service online taxpreparation service (Michaels, 2004); and an estimated 95percent of supermarkets expect to use self-checkouts in 2006(in contrast to only 6 percent in 2001) (Michaels, 2004).

Furthermore, as service providers have come to realize thatself-service yields more benefits than merely lower costs, otherapplications have been found. For example, in exploratorystudies at a southeastern hospital, patients administering theirown pain medication were found on average to consume lessof it. This fact is attributed to being able to medicate when itis needed, rather than waiting for the next visit by the nurse.In other instances, service customers apparently prefer self-service alternatives to avoid dealing with incompetentemployees. As one self-service devotee put it, “There are somany people in customer service areas who have no socialskills. They make the experience more unpleasant thanhandling it myself” (reported in Michaels, 2004, p. 2A).

The customer’s job: helping others

Beyond self-service, there are many instances in which thecustomer’s job may be redefined such that he or she in effectproduces or facilitates the service for other customers. Forexample, a child at a daycare center might be appointed“buddy of the day.” The child’s job would be to helpacclimate a newcomer into the service environment.Longstanding residents of retirement communities oftenassume comparable roles to welcome new residents. Notethat these customer roles are analogous to mentoringprograms that acclimate new employees into businessorganizations. Just as “traditional” mentoring programsincrease new employees’ familiarity with the organizationand make them feel more comfortable and confident should




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they need to interact with the boss, the use of customers as

mentors for other customers promises to enhance subsequent

interactions with customer-contact employees.

The customer’s job: promoting the company

In many instances, the customer’s job responsibilities mayinclude a sales or promotional element. Apartment complexes

and financial institutions for example, often award cash or

prizes to current customers who refer new prospects to thebusiness. As with the customer mentoring programs, the

positive interaction between customer and prospect paves theway for an equally positive interface between prospect and

contact employee.Some service organizations are quite creative in their use of

existing customers to promote the enterprise. For example,

bowling centers in the USA often create what might bedescribed as word-of-mouth heroes using an old, yet effective,

technique. A clear fish bowl is placed on the customer servicecounter into which customers are encouraged to drop their

business cards in return for a chance to win a free bowlingparty for themselves and their co-workers. Cards are

periodically drawn from the fish bowl and the lucky patron

is contacted to schedule the party. The winner automaticallybecomes a bowling booster; he/she makes sure coworkers get

the good news, answers their questions about how to get tothe center, explains what to wear, and orients them inside the

bowling center on the day of the party. In effect, the winnerbecomes a hero at the office for sharing the prize with

colleagues.

The customer’s job: employee pool

A still further extension of the customer’s job definition

involves literally hiring the customer as an employee.

McDonald’s restaurants, for example, have historicallyappealed to teenage applicants who are already familiar with

McDonald’s products and are compatible with a large portionof the restaurant’s customer base – both head-starts toward

fostering healthy interfaces between customers andemployees. In addition, previous employment with a service

organization would seem to heighten the empathy prior

employees (now customers) have for current employees. Suchempathy in turn serves as an antecedent to positive

encounters between customers and employees. In the caseof the fast food industry, and McDonald’s in particular, such

an empathy advantage may be quite significant given the highproportion of baby-boomers and younger consumers who

have at one time or another worked in such restaurants.

Training through education

For customers to be more deeply involved in the production

of the service, they must be educated or trained. Toward thisend, some service organizations have developed handbooks

and other informative materials for their customers.

Prospective guests to Disney World, for example, are sentvideos and manuals to help prepare them for their vacation

experience at the amusement park. The materials offer safetyadvice, tips as to what to bring and wear to the park, and

other helpful information. Similarly, several hospitals have

developed patient handbooks. Very similar in appearance toemployee handbooks, these books describe what to bring to

the hospital and what the patient should expect upon arrival.Hospital policies on visiting hours or billing may be outlined,

and some handbooks cover the role the patient and family

members should play. Educational messages placed in

advertising and with on-premise signs complement the

patient handbooks.As a final illustration of customer training, customer

participation is central to the services provided by Big

Brothers/Big Sisters of America, an organization that matches

adult volunteers with children who have a need for an older

role model of the same sex. Because a successful match hinges

upon the quality of the interaction between the adult

volunteer and the child, each volunteer is provided with

extensive written guidelines and suggestions for dealing with

his (her) little brother (sister). In addition, caseworkers

continually coach the volunteers and work with the children

throughout the paired relationship.

Rewarding customers

After identifying consumers who are willing to become

involved, defining what their job is, and training them to do it,

the final step is to reward them for a job well done. There are

several ways to reward the excellent customer.First, the better customers can be promoted just as quality

employees are. For example, American Express Gold Card

members receive additional benefits that a regular cardholder

does not, such as the option of a line of credit at participating

banks. These cardholders have also been promoted to a more

prestigious status. Of course, for the truly outstanding

customer there is the Platinum Card.A common feature of frequent flyer programs is an upgrade

to first class. Frequent flyer programs also encourage long-

term association with the airline. These programs have been

so successful that other service industries have copied the

concept, e.g. hospitality, long-distance telephone services,

retail stores, and credit cards, to name a few.Finally, many financial institutions, insurance companies,

apartment complexes and other organizations periodically

reward customers with thoughtful birthday or Christmas

cards, thank you notes, and small gifts. In particular, one

insurance company found that it could significantly curb the

lapse rate of its insurance policies by sending policy-holders

short “thank you” notes – in effect, rewarding customers who

faithfully renew their policies (Bergiel and Trosclair, 1985).

Applying the customers-as-employees philosophy

Since Bowen’s (1986) recognition that customers represent a

manageable human resource for the service firm, the concept

of customer-as-employee has drawn great attention from

academicians and wide-spread interest from practitioners.

Many others have written of the roles customers might play in

a service company. Maas and Graf (2004) suggest that

customers may play a leadership role in guiding the firm,

while Claycomb and Martin (2001) show that customers

spread positive word-of-mouth and otherwise act as advocates

of the organization when the relationships between the

organization and customers are strong. Like Mills and Morris

(1986), Halbesleben and Buckley (2004) also consider

customers as “partial employees” and describe ways in

which customers can be managed as employees. They note

“many of the HR functions of partial employees mirror those

of more traditional employment relationships” (Halbesleben

and Buckley, 2004, p. 368). More specifically, Harris et al.(1995) investigated customer-to-customer interactions in

home improvement stores and found that it was not




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94

uncommon for customers to seek advice from other

customers rather than from paid employees.Historically employers have had to deal with unruly,

devious and dishonest employees. Lovelock (1994)

introduced the term “jaycustomer” to describe the type ofcustomer that also engages in this less than desirable behavior.

Management of deviant behavior on the part of the partialemployee/customer has begun receiving attention in the

literature. One recent example is Wirtz and Kum (2004)reporting of the effects of customer cheating on service

guarantees. Harris and Reynolds (2004) explain the types ofactivities jaycustomers engage in and suggest managerial

methods to control their behavior.One of the drawbacks to increasing customer participation

is that some customers do not want to participate to a greatextent. For example, one consumer of legal services lamented,

“If only the attorney could settle the case without the stress ofdeposition, having to have the case explained, looking up

records and evidence, and testifying in court.” A morecommon example might be the significant portion of bank

customers who still prefer to complete simple transactionswith human tellers rather than using the automatic teller

machines that may be more convenient. Consequently,service providers should seek to understand the extent to

which their customers are willing and able to become more

involved in their service delivery. It is also important todetermine the motivating factors behind consumer willingness

to participate and what benefits consumers expect to receiveby participating.

Recent research suggests that customer participation inservice can be accomplished by improving role clarity through

education and motivation; clearly demonstrating the benefits(Meuther et al., 2005). An example of both strategies can be

found at Home Depot (home improvement store), where acashier is on hand to educate and guide customers frustrated

by the self-checkout process. Even with the time spent ineducation, a Home Depot customer will move through the

self-checkout process much quicker than those customerswaiting ten deep in the traditional checkout line. This is an

observation not lost on the customer. Home Depot receives aproductivity benefit of one cashier working four self-checkout

stations, a four to one cost advantage.While customer responsiveness is likely to vary from

industry to industry, and from market segment to marketsegment, there are a few general principles as to when

customers may successfully be treated as employees. These

include the following instances:. Customers have the necessary skills to provide the service

themselves, or the tasks are simple enough that customersmay be easily trained. Clearing one’s own table at a fast

food restaurant or pumping one’s own gasoline at a fuelingstation illustrate this principle.

. Customers can provide the service more efficiently ormore effectively than can internal employees, e.g. creating

one’s own salad at a self-serve salad bar.. Customer participation is essential to the delivery of

quality service. An example is leisure-time industries suchas fitness centers, health clubs, and bowling centers,

whose core service is, by definition, the activity in whichthe customer becomes involved.

. Customers perceive that their active participation:improves the quality or value of the service; or improves

the promptness, convenience, or enjoyment of the service

delivery process. Examples: using a bank’s ATM for

routine banking transactions, or booking one’s own airline

ticket after considering the entire range of flight schedules

and prices. Promotional themes that stress these benefits

are likely to shape consumer perceptions and expectations.

For all the benefits the service firm receives through active

customer participation, there may be a negative consequence

which should be anticipated and managed on the employee

side of the fence. Historically we have thought that increasing

customer participation would lower service provider workload

and raise morale/productivity amongst employees. A recent

study by Hsieh et al. (2004) suggests that while the physical

workload may diminish, the psychological workload increases

due to the employees’ increased interaction with customers.

For some service employees dealing with customers raises

their “hassle factor”. This once again raises the importance of

finding, hiring, motivating and training employees using non-

conventional, customer based methods. So we complete the

circle, customers should be treated as employees, employees

should be treated as customers.

Summary and concluding comments

The job of the corporate marketing department is not to

market the service per se, but to facilitate good marketing

throughout the organization (Gronroos, 1983). The practice

of marketing is everyone’s responsibility. Accordingly, service

providers have an opportunity to enhance the perceived value

of their product through people – which potentially includes

both employees and customers. Given the nature of the

interaction between the consumer and contact personnel, one

way to increase productivity is to view the traditional roles in a

new light: employees as customers and customers as

employees.It is vital to have well-trained and motivated employees.

Within limits, job-products should be designed to satisfy

employees’ wants and needs. These wants and needs may

often be determined through market research. A marketing

strategy should then be employed to encourage the

consumption of these job-products in a profitable manner.

The value of job-products can be increased through increased

financial rewards, recognition, and promotions.Consumer participation in the production process should

be increased to help lower costs and perhaps increase the

quality of the service. The customers’ job roles must be

clarified and explained for customers, and ultimately accepted

by them. Research should aid in understanding what

percentage of the company’s business is willing and able to

become more involved in their service delivery and what

motivates them to do so. Once they have satisfactorily carried

out their part of the service delivery, customers should be

rewarded for a job well done.As we have discussed, these action steps may be taken to

treat employees as customers:. Conduct research to determine what employees’ job needs

are.. Provide flexible working hours, benefits, and expanded job

responsibilities.. Base compensation on performance with customers.. Provide company-wide recognition to outstanding

employees.




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. Use marketing communication techniques to motivate

customer-contact employees.

To treat customers as employees, we suggest this check-list of

action steps:. Define the extent to which customers can do the job for

themselves.. Define the extent to which customers can help others do

the job.. Define the extent to which customers can be involved in

promoting the organization.. Train customers in their job through education.. Provide rewards and incentives to good customers.

Note

1 Previous research which laid the foundation for this model

is included in the bibliography. In particular, see: Bateson

(1983), Berry (1984), Chase (1984), Gronroos (1981),

Levitt (1976), Lovelock and Young (1979), Mills and

Morris (1986), Silpakit and Fisk (1985) and Tansuhaj

et al. (1988).

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Corresponding author

Michael R. Bowers can be contacted at: [email protected]

Executive summary and implications formanagers and executives

This summary has been provided to allow managers and executives

a rapid appreciation of the content of the article. Those with a

particular interest in the topic covered may then read the article

in toto to take advantage of the more comprehensive description of

the research undertaken and its results to get the full benefit of the

material present.

With a wonderful display of lettuce, tomatoes, chives,

cucumber, olives, meats, potatoes, fish, egg and onion,

someone is preparing a delicious salad bowl in the restaurant.

Someone else is clearing a table, picking up used plates and

cutlery and moving them to racks ready for washing.At the bank, someone is conducting a financial transaction

which involves withdrawing money and checking the balance.

At the garage, someone is filling the car with fuel, checking

the tires and oil before processing a credit-card payment.At the shoe shop someone is picking out the correct shape

and shade of footwear from the shelves. Elsewhere, someone

is studying a leaflet to familiarize themselves with a holiday

park’s facilities.Different jobs and different people, but all with one thing in

common. Could that merely be that they are all just workers

in the service industries? Well, no. They’re not in paid

employment to do any of those things. They are, in fact,

customers yet they do them just the same.The boundaries separating what an employee does and

what a customer does have shifted so much that the most

surprising aspect of it is that more organizations haven’t yet

recognized a need to, or discovered the benefits of, treating

employees as customers and customers as employees.Managing contact personnel effectively and encouraging

customer participation can be keys to lower costs, higher

quality of services provided, and ultimately higher levels of

satisfaction on the part of both employees and customers.

Customer loyalty can increase as the customer comes to

believe the employee sincerely understands customer needs.Although there are many similarities in the ways employees

and customers can be viewed and treated by an organization,

it goes without saying that there are fundamental differences

– not least that you hire and pay your staff, and also that some

customers do not want to “participate” to any great extent.

For instance, a significant proportion of bank customers still

prefer to complete even simple transactions with a human

teller rather than using an automatic one which might be

more convenient.Consequently service providers should seek to understand

the extent to which their customers are willing and able to

become more involved in their service delivery. It is also

important to determine the motivating factors behind

consumer willingness to participate and what benefits

consumers expect to receive by doing so.Having a human being on hand to help when an unfamiliar

“self help” process has been introduced can help get it

accepted. Such as having a cashier on hand to educate and

guide customers frustrated by a self-checkout process at a

store. Even though time is spent on “educating” the customer

as the process occurs, they will move through the checkout

faster than those queuing ten-deep in the traditional checkout

line – an observation not lost on either set of customers.




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97

Customers can also be used as “employees” in the salesprocess – offering rewards to existing customers who referothers to the business. While some companies have benefitedfrom literally converting customers into employees.McDonald’s restaurants, for example, have historicallyappealed to teenage applicants who are already familiar withtheir products and compatible with a large proportion of theircustomer base – both head-starts towards fostering healthyinterfaces between customers and employees.

Since the heart of a service company’s business is theinteraction with the customer, raising the quality of theinterface with the contact employee should raise the perceivedquality of the service.

Bowers and Martin comment: “It is as important to attractcompetent people and persuade them to work for a companyas it is to attract customers and persuade them to purchasethe service. Advertising, personal selling, trade shows,newsletters, and other forms of marketing communicationsare frequently used to communicate with external consumers.These tools can be equally effective when aimed at internalconsumers – employees. Once good people have beenbrought into the organization, efforts should be made tokeep them.”

As it is vital to have well-trained and motivated employees,

jobs, within limits, should be designed to satisfy employees’

wants and needs – wants and needs which may often be

determined through market research.Action steps to treat employees as customers include:

conduct research to determine what employees’ job needs are;

provide flexible working hours, benefits, and expanded job

responsibilities; base compensation on performance with

customers; provide company-wide recognition to outstanding

employees; use marketing communication techniques to

motivate customer-contact employees.Action steps to treat customers as employees include: define

the extent to which customers can do the job for themselves;

define the extent to which customers can help others do the

job; define the extent to which customers can be involved in

promoting the organization; train customers in their job

through education; provide rewards and incentives to good

customers.

(A precis of the article “Trading places redux: employees as

customers, customers as employees”. Supplied by Marketing

Consultants for Emerald.)




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