Customer

In sales, commerce and economics, a customer (sometimes known as a client, buyer, or purchaser) is the recipient of a good, service, product or an idea - obtained from a seller, vendor, or supplier via a financial transaction or exchange for money or some other valuable consideration.^[1][2] An ultimate etymology of "client" may imply someone merely inclined to do business, whereas a purchaser procures goods or services on occasion but a customer customarily or habitually engages in transactions (historically: the collection of tolls or taxes - see the Wiktionary etymology of customer). Such distinctions have no contemporary semantic weight.

Customer segmentation

In the 21st century customers are generally categorized into two types:

• an entrepreneur or trader (sometimes a commercial Intermediary) - a dealer who purchases goods for re-sale.^[3][1]
• an end user or ultimate customer who does not re-sell the things bought but is the actual consumer or an agent such as a Purchasing officer for the consumer.^[3][1]

A customer may or may not also be a consumer, but the two notions are distinct, even though the terms are commonly confused.^[3][1] A customer purchases goods; a consumer uses them.^[4][5] An ultimate customer may be a consumer as well, but just as equally may have purchased items for someone else to consume. An intermediate customer is not a consumer at all.^[3][1] The situation is somewhat complicated in that ultimate customers of so-called industrial goods and services (who are entities such as government bodies, manufacturers, and educational and medical institutions) either themselves use up the goods and services that they buy, or incorporate them into other finished products, and so are technically consumers, too. However, they are rarely called that, but are rather called industrial customers or business-to-business customers.^[3] Similarly, customers who buy services rather than goods are rarely called consumers.^[1]

Six Sigma doctrine places (active) customers in opposition to two other classes of people: not-customers and non-customers:

• Customers of a given business have actively dealt with that business within a particular recent period that depends on the product sold
• Not-customers are either past customers who are no longer customers or potential customers who choose to interact with the competition.
• Non-customers are people who are active in a different market segment entirely.

Geoff Tennant, a Six Sigma consultant from the United Kingdom, uses the following analogy to explain the difference: A supermarket's customer is the person buying milk at that supermarket; a not-customer buys milk from a competing supermarket, whereas a non-customer doesn't buy milk from supermarkets at all but rather "has milk delivered to the door in the traditional British way".^[6]

Tennant also categorizes customers in another way that is employed outwith the fields of marketing.^[7] While marketers, market regulation, and economists use the intermediate/ultimate categorization, the field of customer service more often categorizes customers into two classes:

1. An external customer of an organization is a customer who is not directly connected to that organization.^[7][8]
2. An internal customer is a customer who is directly connected to an organization, and is usually (but not necessarily) internal to the organization. Internal customers are usually stakeholders, employees, or shareholders, but the definition also encompasses creditors and external regulators.^[9][8]

Before the introduction of the notion of an internal customer, external customers were, simply, customers. Quality-management writer Joseph M. Juran popularized the concept, introducing it in 1988 in the fourth edition of his Quality Control Handbook (Juran 1988).^[10][11][12] The idea has since gained wide acceptance in the literature on total quality management and service marketing;^[10] and many organizations as of 2016 recognize the customer satisfaction of internal customers as a precursor to, and a prerequisite for, external customer satisfaction, with authors such as Tansuhaj, Randall & McCullough 1991 regarding service organizations which design products for internal customer satisfaction as better able to satisfy the needs of external customers.^[13] Research on the theory and practice of managing the internal customer continues as of 2016 in a variety of service-sector industries.^[14][15]

See also

• Customer centricity
• Customer relationship management
• Customer data integration
• Guided selling
• Service level agreement
• Early adopter
• Customer delight

Notes

References

• Blythe, Jim (2008). Essentials of Marketing (4th ed.). Pearson Education. ISBN 978-0-273-71736-2. 
• Frain, John (1999). "Customers and customer buying behaviour". Introduction to marketing (4th ed.). Cengage Learning EMEA. ISBN 978-1-86152-147-7. 
• Kansal, B.B.; Rao, P.C.K. (2006). "Environmental Factors in Management". Preface to Management (Parragon Books). Ganga Dhar Chaudhary. ISBN 978-81-89091-00-2. 
• Kendall, Stephanie D. (2007). "Customer Service from the Customer's Perspective". In Fogli, Lawrence. Customer Service Delivery: Research and Best Practices. J-B SIOP Professional Practice Series. 20. John Wiley and Sons. ISBN 978-0-7879-8310-9. 
• Kelemen, Mihaela (2003). Managing quality: managerial and critical perspectives. SAGE. ISBN 978-0-7619-6904-4. 
• Papasolomou-Doukakis, Ioanna (2001). "Customer satisfaction". In Kitchen, Philip J.; Proctor, Tony. The informed student guide to marketing. ITBP Textbooks Series. Cengage Learning EMEA. ISBN 978-1-86152-546-8. 
• Reeves, Carol A.; Bednar, David A. (2005). "Defining Quality". In Wood, John Cunningham; Wood, Michael C. Joseph M. Juran: critical evaluations in business and management. Routledge. ISBN 978-0-415-32571-4. 
• Reizenstein, Richard C. (2004). "Customer". In Stahl, Michael J. Encyclopedia of health care management. Sage eReference. SAGE. ISBN 978-0-7619-2674-0. 
• Stracke, Christian (2006). "Process-oriented quality management". In Ehlers, Ulf-Daniel; Pawlowski, Jan Martin. Handbook on quality and standardisation in e-learning. Springer. ISBN 978-3-540-32787-5. 
• Tennant, Geoff (2001). Six Sigma: SPC and TQM in manufacturing and services. Gower Publishing. ISBN 978-0-566-08374-7. 

Further reading

• Juran, Joseph M. (1988). Quality Control Handbook (4th ed.). New York, NY: McGraw-Hill. ISBN 978-0-07-033176-1. 
• Tansuhaj, Patriya; Randall, Donna; McCullough, Jim (1991). "Applying the Internal Marketing Concept Within Large Organizations: As Applied to a Credit Union". Journal of Professional Services Marketing. Taylor & Francis. 6 (2): 193–202. doi:10.1300/J090v06n02_14. 
• Forget Demographics. Target Communities Instead (Marketing)

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