What is a customer?
A customer is a person or a business that purchases goods or services from another business. Customers are important because they generate revenue; without them, businesses have nothing to offer. Most companies open to the public compete with other companies to attract customers, either by aggressively advertising their products, or by lowering prices to expand their customer base.
Key points to remember
- Customers are individuals and businesses that purchase goods and services from another business.
- To understand how to better meet the needs of their customers, some companies are closely monitoring their customer relationships to identify ways to improve service and products.
- The way companies treat their customers can give them a competitive advantage.
- Although consumers can be customers, consumers are defined as those who consume or use market goods and services.
Businesses often honor the adage “the customer is always right” because satisfied customers are more likely to attribute repeat business to companies that meet or exceed their needs. As a result, many companies are closely monitoring their customer relationships to seek feedback on methods of improving product lines. Customers are classified in several ways. Most often, customers are classified as external or internal.
External customers are dissociated from commercial operations and are often the parties interested in purchasing the final goods and services produced by a company. Internal customers are individuals or companies integrated into business operations, often existing as employees or other functional groups within the company.
Companies frequently study the profile of their customers to refine their marketing approaches and adapt their inventory to attract the most customers. Customers are often grouped by their demographics, such as age, race, gender, ethnicity, income level, and geographic location, all of which can help businesses grow a snapshot. the “ideal client” or the “client character”. This information helps businesses deepen existing customer relationships and reach untapped consumer populations to increase traffic.
Customers are so important that colleges and universities offer courses on consumer behavior dedicated to studying their behavior patterns, choices and peculiarities. They focus on the reasons why people buy and use goods and services and their impact on businesses and economies. Understanding customers enables businesses to create effective marketing and advertising campaigns, to provide products and services that meet needs and wants, and to retain customers for repeat business.
Customer service, which strives to ensure positive experiences, is the key to a successful salesperson / customer dynamic. Loyalty in the form of favorable online reviews, referrals and future business can be lost or gained based on good or bad customer service experience. In recent years, customer service has evolved to include real-time interactions via instant message chats, SMS and other means of communication. The market is saturated with companies offering identical or similar products and services. What sets them apart is customer service, which has become the basis of competition for most businesses. It is a key component of Sigma Six.
Customers vs consumers
Terms customer and consumer are almost synonymous and are often used interchangeably. However, there is a slight difference. Consumers are defined as individuals or businesses that consume or use goods and services. Customers are the buyers in the economy who buy goods and services, and they can exist as consumers or alone as customers.
Customers differ from purchasing agents, who use equity capital to purchase goods in bulk for commercial or industrial purposes.