What Is Internal Customer Service?

A Definition and Case Study

Article by Donna Earl

Recently the term Internal Customer Service has become a buzz phrase. We hear that great customer service (for the external customer) depends on excellent internal customer service. But what does that mean? Let’s start with some definitions.

1. The external customer is someone who signs a check, pays our employer, and ultimately makes our paycheck possible. External customers have choice, and if they don’t like your product or service can take their business elsewhere.
2. An internal customer or internal service provider can be anyone in the organization. An internal customer can be a co-worker, another department, or a distributor who depends upon us to provide products or services which in turn are utilized to create a deliverable for the external customer. In general, internal customers don’t have a choice. For example, if the sales department doesn’t like accounting’s credit policies, they can’t fire that department and hire another.

Great (external) customer service creates customer satisfaction, customer loyalty, and customer retention. So why all the fuss about internal customers, especially when retention isn’t an issue?

Outstanding internal customer service is simply good business. Internal customer service can flourish only in high communication environment. To create positive internal customer service, all departments work together cooperatively, agree on processes and procedures, and negotiate expectations. Like gears meshing in sync, interdependent business units meet each others’ needs, work productively together to meet common goals, and deliver high quality products and service to the external customer.

The focus on developing effective internal customer service helps organizations cut costs, increase productivity, improve interdepartmental communication and cooperation, boost employee morale, align goals, harmonize processes and procedures, replace interdepartmental competition with interdepartmental cooperation and deliver better service to the external customer. Excellent service to the external customer is dependent upon healthy internal customer service practices.

Internal Customer Service Case Study

The customer advocate for a large manufacturing company was concerned about the organization’s reputation for excellent products, but terrible customer service. The company mentality was “Customer service is just a department!”

During the interactive exercises in the Internal Customer Service Seminar presented by Donna Earl, many expensive lapses in the company’s internal customer service came to light. One example involved Engineering’s lack of response when Customer Service reps required an engineer’s input. (In this case Engineering is the internal service provider and the Customer Service reps are the internal customers).

The Customer Service reps were responsible for problem solving and taking orders for highly technical, often customized parts. Sometimes the reps needed clarification from an engineer to process a customer order for the correct part. Engineers viewed information requests from Customer Service reps as low priority, uninteresting, and annoying.

During the class, we calculated the cost to the company of one incorrect shipment was approximately $125,000 in wasted labor, materials, and other expenses. In addition, the cost of frustration and delayed deadlines to the external customer was damaging to the company’s reputation.

At the end of the seminar, engineers understood what the Customer Service manager had been preaching for years: responding to requests from customer service reps is a priority and is good business.

©Donna Earl 2024

See our Internal Customer Service Seminar for steps your organization can take to improve productivity and interdepartmental cooperation and communication.

See related article Providing Excellent Internal Customer Service.

Donna Earl is an international specialist in Customer Service, Management Skills and Emotional Intelligence. She can help your company improve internal customer service. Call 415.929.8110 or email email@DonnaEarlTraining.com for permission to reprint these articles, or regarding her consulting and training services.