What is a customer? Definition and meaning
A customer is a person, company or any party that receives, consumes or buys a product or service and is able to choose between different goods and suppliers. The main goal of all commercial enterprises is to attract customers or clients, make them purchase what they have on sale, and encourage them to keep coming back. At the core of marketing is having a good understanding of what customers need and value.
Customers who have an arrangement or relationship with the supplier are often referred to as clients. Also people who hire a lawyer or any professional who offers them advice are clients, not customers.
In the typical, everyday meaning of the word, when a customer buys something the seller immediately focuses on the next one, while with a client the aim is to cultivate the relationship. In many cases, the client-supplier relationship becomes similar to a partnership, this does not tend to happen with customers.
After customers have made their purchase, the seller focuses on the next one. With clients, however, the relationship is much longer lasting.
According to the Business Dictionary, a customer is:
“A party that receives or consumes products (goods or services) and has the ability to choose between different products and suppliers.”
Most business employees agree with the adage ‘The customer is always right,’, because happy customers buy things and are more likely to come back. A company that has customers as its main focus – rather than products or sales – is known as a customer-centric business.
Since the turn of the century, as more and more business and general purchases are done online, a growing number of companies have become entirely customer-centric. They closely track the relationships they have with people who buy their goods and services, often asking for feedback, gaining data on their online behaviors and purchasing patterns, in order to improve their purchasing experience and tailor their offerings closely to the needs and preferences of their customers.
Customers are consumers, the end users. The terms ‘customers’ and ‘consumers’ mean virtually the same thing. Customers, unlike vendors or resellers, are the end users of any good or service that they have paid for.
According to American Express, the 7-step approach for attracting new customers involves: “1. Identify Your Ideal Client. 2. Discover Where Your Customer Lives. 3. Know Your Business Inside and Out. 4. Position Yourself as the Answer. 5. Try Direct Response Marketing. 6. Build Partnerships. 7. Follow Up.”
Even though the two terms are very similar, there is a basic difference. Customers are human beings, companies or entities who purchase goods and services. As soon as that customer literally consumes what was purchased, he, she or is then also a consumer. For anything to be classed as a consumer, there must be some consumption.
Sometimes customers and consumers are not the same. For example, if I buy baby food for my baby girl, I am the customer but my daughter is the consumer, not me – she consumes the food.
There are many different types of customers:
– B2C stands for Business-to-Customer. For example, when I buy a coffee at a stall at the train station, it is a B2C event.
– B2B stands for Business-to-Business. For example, when the coffee stand owner buys coffee from a supplier; both of them are businesses.
– C2B stands for Customer-to-Business. For example, when somebody sells his or her gold ring to a pawnbroker or jewelry store.
– C2C stands for Customer-to-Customer. For example, when I want to sell my car I place an ad in my local newspaper and sell it to an individual who responds to the advert. eBay is a huge C2C and B2C marketplace.
Steve Jobs (1955-2011), co-founder, Chairman and CEO of Apple Inc., CEO and majority shareholder of Pixar Animation Studios, as well as member of The Walt Disney Company’s Board of Directors, once said: “Our DNA is as a consumer company – for that individual customer who’s voting thumbs up or thumbs down. That’s who we think about. And we think that our job is to take responsibility for the complete user experience. And if it’s not up to par, it’s our fault, plain and simply.” (Image: adapted from macobserver.com)
According to the Online Etymology Dictionary, the term first appeared in the English language in the fourteenth century with the meaning ‘a customs official’, and in the early fifteenth century with the meaning ‘a buyer’. It came from Anglo-French custumer, which came from Medieval Latin custumarius, which in turn originated from Latin consuetudinarius with the meaning ‘customary, custom, usual, ordinary’.
It was not until the 1540s that the term was used with its current meaning ‘a person with whom one has dealings’. Shakespeare used the word when referring to a prostitute.
Henry Ford (1863-1947), an American industrialist and founder of the Ford Motor Company, once said: “It is not the employer who pays the wages. Employers only handle the money. It is the customer who pays the wages. (Image: Wikipedia)
– Slippery Customer: refers to people who are deceitful as well as clever. The term may also be used for individuals who are elusive – difficult to pin down.
– A Tough Customer: a person who is not easy to deal with, or is not easily satisfied. The expression might be used when advising a friend to steer clear of somebody else, as in: “Pauline is a tough customer, I would stay away from her if I were you.”
– An Ugly Customer: a person who may easily become aggressive or even vicious. As in: “When Barry has been drinking he can be an ugly customer. I’ve seen him suddenly throw things at people just because he did not like the way they looked at him.”
– An Awkward Customer: somebody who is awkward, difficult to deal with, hard to please, and causes problems, in many cases deliberately. He or she does not behave in the way you would expect.
– Cool Customer: – an individual who is calm and composed, even in alarming situations when panic, dismay or diffidence would be expected.
Jeff Bezos, founder, Chairman and CEO of the giant Internet merchant Amazon.com, once said: “If your customer base is aging with you, then eventually you are going to become obsolete or irrelevant. You need to be constantly figuring out who are your new customers and what are you doing to stay forever young.” (Image: twitter.com/jeffbezos)
Customer in other languages
In many other languages, the same word is used for customer or client. Below is a list of translations for the English word ‘customer’:
Cliente (Spanish, Portuguese, Italian), Client (French), Kunde (German, Danish, Norwegian), клиент (Russian), Klient (Polish), Klant (Dutch), Kund (Swedish), Asiakas (Finnish), 顧客 (Japanese), 顾客 (Chinese), زبون (Arabic), Pelanggan (Indonesian), πελάτης (Greek), Zákazník (Czech), ग्राहक (Hindi), and ગ્રાહક (Gujarati).
Your target customer
When advertisers try to target their message to people who are more likely to be interested in the contents of an advert – those who will likely want or need that product or service and be willing to part with their hard-earned cash – they generally study several demographic features, such as the potential customer’s:
– academic qualifications
– job or socioeconomic level (income)
– zip code (GB: post code)
According to Tricision.com, customer targeting is the business process that defines which customers to market to. You have to make decisions regarding the type and cost of the media, your merchandising, what type of offer you intend to make. You also have to analyze data on past customer performance, commonly referred to as RFM (Recency, Frequency and Monetary).
If the advertisers is willing to pay for the data, they could also obtain lists of people according to their buying behaviors, hobbies, status (single, married, kids), etc.
The more precisely you are able to define who your target customer is, the better and more effectively your advertising vehicles will perform, i.e. you will reach more of the right type of people for less expenditure.
If, for example, you are promoting a taxi company in a suburb of New York or London, it would be a waste of money to place an ad in a nationwide publication such as the Wall Street Journal or Financial Times. Your target customers will be more effectively reached via the local papers, local radio, shop windows, and billboards in that suburb.
Video – What is a customer?
In this Marketing Teacher video, we learn about the similarities and differences between customers and consumers. In most cases the meaning is the same, but not if the end user (consumer) is different from the person doing the purchasing.