View source for Customer

{{Short description|Recipient of a good, service, product, or idea from a vender or seller}}
{{Other uses}}
{{Redirect|Clientele|the British rock band|The Clientele}}
[[File:Food Market at Cajamarca, Peru.jpg|thumb|Customers at a market for food in [[Cajamarca, Peru]]]]
{{Use dmy dates|date=April 2024}}
In [[sales]], [[commerce]], and [[economics]], a '''customer''' (sometimes known as a [[Client (business)|client]], [[buyer]], or [[purchaser]]) is the recipient of a [[Good (economics)|good]], [[service (economics)|service]], [[product (business)|product]], or an [[Intellectual property|idea]], obtained from a [[seller]], [[vendor]], or [[distribution (business)|supplier]] via a [[financial transaction]] or [[exchange (economics)|an exchange]] for [[money]] or some other valuable [[consideration]].{{sfn|Reizenstein|2004|pp=119}}{{sfn|Kendall|2007|pp=3}}
==Etymology and terminology==
Early societies relied on a [[gift economy]] based on favours. Later, as [[commerce]] developed, less permanent human relations were formed, depending more on transitory [[need]]s rather than enduring social [[desire]]s. Customers are generally said to be the purchasers of goods and services, while clients are those who receive personalized advice and solutions.<ref name="auto">{{cite web|url=https://smallbusiness.chron.com/difference-between-customer-vs-client-56387.html|title=What Is the Difference Between a Customer Vs. a Client?|website=Chron|access-date=7 March 2019}}</ref> Although such distinctions have no contemporary semantic weight, [[Employment agency|agencies]] such as [[law firm]]s, [[film studio]]s, and [[health care provider]]s tend to prefer ''[[:wikt:client|client]]'', while [[grocery store]]s, [[bank]]s, and [[restaurant]]s tend to prefer ''[[:wikt:customer|customer]]'' instead.
===Client===
[[File:Attorney and Client, Fortitude and Impatience.jpg|thumb|A drawing of an attorney with a client]]
The term client is derived from Latin ''clients'' or ''care'' meaning "to incline" or "to bend", and is related to the emotive idea of [[closure (psychology)|closure]]. It is widely believed that people only change their habits when motivated by [[greed and fear]].<ref>{{cite web|url=https://www.psychologytoday.com/blog/the-pathways-experience/201708/greed-and-fear|title=Greed and Fear|website=Psychology Today|access-date=9 May 2018}}</ref> Winning a client is therefore a singular event, which is why professional specialists who deal with particular problems tend to attract long-term clients rather than regular customers.<ref name="auto"/> Unlike regular customers, who buy merely on price and value, long-term clients buy on experience and trust.<ref name="auto"/>
===Customer===
Clients who habitually return to a seller develop [[custom (law)|custom]]s that allow for regular, sustained commerce that allows the seller to develop statistical models to optimize [[production (economics)|production]] processes (which change the nature or form of goods or services) and [[supply chain]]s (which change the location or formalize the changes of ownership or entitlement transactions).
An "end customer" denotes the person at the end of a supply chain who ultimately purchases or utilised the goods or services.<ref>Harrison, A. and Godsell, J. (2003), [https://dspace.lib.cranfield.ac.uk/bitstream/handle/1826/377/SWP0103.pdf Responsive Supply Chains: An Exploratory Study of Performance Management], Cranfield School of Management, accessed 4 March 2023</ref>
===Employer===
A client paying for construction work is often referred to as an "employer".<ref>Evolution 5, [https://evolution5.co.uk/what-is-an-employers-agent/ What is an Employer’s Agent in construction?], published 17 May 2021, accessed 25 April 2023</ref><ref>Blackstone Solicitors Ltd., [https://blackstonesolicitorsltd.co.uk/category/construction/jct-contracts-explained-blackstone-solicitors/ JCT Contracts Explained], published 6 September 2021, accessed 25 April 2023</ref>
== Customer segmentation ==
{{main|Customer segmentation}}
[[File:Bases for segmentation.png|thumb|A diagram of four different axes along which customers could be segmented]]
In the 21st century, customers are generally categorized into two types:
* an [[entrepreneur]] or [[trade]]r (sometimes a [[intermediary|commercial Intermediary]]) - a dealer who purchases goods for re-sale.{{sfn|Frain|1999|p=161}}{{sfn|Reizenstein|2004|pp=119}}
* 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|Purchasing officer]] for the consumer.{{sfn|Frain|1999|p=161}}{{sfn|Reizenstein|2004|pp=119}}
A customer may or may not also be a [[consumer]], but the two notions are distinct.{{sfn|Frain|1999|p=161}}{{sfn|Reizenstein|2004|pp=119}}  A customer ''purchases'' goods; a consumer ''uses'' them.{{sfn|Blythe|2008|pp=18}}{{sfn|Kansal|Rao|2006|pp=61}}  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.{{sfn|Frain|1999|p=161}}{{sfn|Reizenstein|2004|pp=119}}  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.{{sfn|Frain|1999|p=161}}  Similarly, customers who buy services rather than goods are rarely called consumers.{{sfn|Reizenstein|2004|pp=119}}
[[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 [[Competition (economics)|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 does not buy milk from supermarkets at all but rather "has milk delivered to the door in the traditional British way".{{sfn|Tennant|2001|pp=52}}
Tennant also categorizes customers in another way that is employed outside the fields of [[marketing]].{{sfn|Tennant|2001|pp=52–53}}  While marketers, market regulation, and economists use the intermediate/ultimate categorization, the field of [[customer service]] more often{{quantify|date=August 2016}} categorizes customers into two classes:
# An external customer of an organization is a customer who is not directly connected to that organization.{{sfn|Tennant|2001|pp=52–53}}{{sfn|Kendall|2007|pp=3,9}}
# 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 [[stakeholder (corporate)|stakeholder]]s, [[employee]]s, or [[shareholder]]s, but the definition also encompasses [[creditor]]s and [[regulator (economics)|external regulator]]s.{{sfn|Tennant|2001|pp=53}}{{sfn|Kendall|2007|pp=3,9}}
Before the introduction of the notion of an internal customer, external customers were, simply, customers.{{Citation needed|date=August 2016}} [[Quality management|Quality-management]] writer [[Joseph M. Juran]] popularized the concept, introducing it in 1988 in the fourth edition of his ''Quality Control Handbook'' {{harv|Juran|1988}}.{{sfn|Kelemen|2003|pp=28}}{{sfn|Stracke|2006|p=87}}{{sfn|Reeves|Bednar|2005|pp=335}}  The idea has since gained wide acceptance in the literature on [[total quality management]] and service marketing;{{sfn|Kelemen|2003|pp=28}} and many organizations {{as of | 2016 | lc = on}} recognize the [[customer satisfaction]] of internal customers as a precursor to, and a prerequisite for, external customer satisfaction, with authors such as {{harvnb|Tansuhaj|Randall|McCullough|1991}} regarding service organizations which design products for internal customer satisfaction as better able to satisfy the needs of external customers.{{sfn|Papasolomou-Doukakis|2001|pp=71}} Research on the theory and practice of managing the internal customer continues {{as of | 2016 | lc = on}} in a variety of [[service sector|service-sector]] [[industry (economics)|industries]].<ref>{{cite web |url=http://www.internalcustomer.com/ongoing-research/ |title=Referred page |access-date=2013-11-22 |url-status=live |archive-url=https://web.archive.org/web/20140222060247/http://www.internalcustomer.com/ongoing-research/ |archive-date=2014-02-22 }}
</ref><ref>{{Cite web|url=https://scholar.google.com/scholar?as_ylo=2009&q=internal+customer+service+industry&hl=en&as_sdt=1,16|title=Google Scholar|website=scholar.google.com}}</ref>{{qn|date=August 2016}}
===Arguments against use of the term "internal customers"===
Leading authors in management and marketing, like [[Peter Drucker]], [[Philip Kotler]], [[W. Edwards Deming]], etc., have not used the term "internal customer" in their works. They consider the "customer" as a very specific role in society which represents a crucial part in the relationship between the demand and the supply. Some of the most important characteristics of any customer are that: any customer is never in a subordination line with any supplier; any customer has equal positions with the supplier within negotiations, and any customer can accept or reject any offer for a service or a product. Peter Drucker wrote, "They are all people who can say no, people who have the choice to accept or reject what you offer."<ref>{{cite book|last1=Drucker|first1=Peter F.|last2=Collins|first2=Jim|last3=Kotler|first3=Philip|last4=Kouzes|first4=James|last5=Rodin|first5=Judith|last6=Rangan|first6=V. Kasturi|last7=Hesselbein|first7=Frances|title=The five most important questions you will ever ask about your organization|date=2008|publisher=Jossey-Bass|edition=Third|at=Under the chapter "Question 2: Who Is Our Customer?", p. 25|isbn=978-0-470-22756-5}}</ref>
In opposition to the stated customer's characteristics, relationships between colleagues in a company are always based on subordination – direct or indirect. Company employees are obliged to follow the processes of their companies. Company employees do not have the authority to choose a unit/colleague to fulfill any task. Company employees are obliged to use an existing unit/colleague by using the company's structure and approved processes, therefore these internal relationships are not considered as an option.
Many authors in [[ITIL]] and [[Six Sigma]] methodologies define "internal customer" as an internal part of a company that uses the output of another part of a company as its input. But actually, this definition describes better a classical internal process rather than a relationship between a customer and a supplier. Peter Drucker considers that there are no customers inside organizations. He wrote "Inside an organization, there are only cost centers. The only profit center is a customer whose check has not bounced."<ref>{{cite book|last1=Drucker|first1=Peter F.|title=Management Challenges for the 21st Century|date=2002|publisher=PerfectBound™, HarperCollins|at=4 Information Challenges, under the topic "Where the Results Are"|isbn=0-06-0546794}}</ref> In addition, William Deming advises managers, in his 9th point, to "Break down barriers between departments. They must work as a team",<ref>{{cite book|last=Deming|first=W. Edwards|title=Out of the crisis|date=2000|publisher=MIT Press|location=Cambridge, Mass.}}</ref> which means that there have to be teamwork in a company rather than a supplier/customer relationship. One more argument, even the ITIL methodology admits that "the term 'colleague' may be more accurate in describing how two internal groups are related to one another.".<ref>{{cite book|title=ITIL® Service Strategy|date=2011|publisher=TSO (The Stationery Office)|edition=Second|at=Table 3.1 Differences between internal and external customers; under the line “Link to business strategy and objectives”|isbn=9780113313044}}</ref>
==See also==
* [[Client (business)]]
* [[Customer centricity]]
* [[Customer data integration]]
* [[Customer delight]]
* [[Customer relationship management]]
* [[Early adopter]]
* [[Guided selling]]
* [[Procurement]]
* [[Service level agreement]]
* [[The customer is always right]]
== Notes ==
{{Reflist}}
=== References ===
* {{cite book|title=Essentials of Marketing|first=Jim|last=Blythe|edition=4th|publisher=Pearson Education|year=2008|isbn=978-0-273-71736-2}}
* {{cite book|title=Introduction to marketing|first=John|last=Frain|edition=4th|publisher=Cengage Learning EMEA|year=1999|isbn=978-1-86152-147-7|chapter=Customers and customer buying behaviour}}
* {{cite book|title=Preface to Management (Parragon Books)|first1=B.B.|last1=Kansal|first2=P.C.K.|last2=Rao|publisher=Ganga Dhar Chaudhary|year=2006|chapter=Environmental Factors in Management|isbn=978-81-89091-00-2}}
* {{cite book|title=Customer Service Delivery: Research and Best Practices|volume=20|series=J-B SIOP Professional Practice Series|editor1-first=Lawrence|editor1-last=Fogli|publisher=John Wiley and Sons|year=2007|isbn=978-0-7879-8310-9|chapter=Customer Service from the Customer's Perspective|first=Stephanie D.|last=Kendall}}
* {{cite book|title=Managing quality: managerial and critical perspectives|first=Mihaela|last=Kelemen|publisher=SAGE|year=2003|isbn=978-0-7619-6904-4}}
* {{cite encyclopedia|article=Customer satisfaction|first=Ioanna|last=Papasolomou-Doukakis|encyclopedia=The informed student guide to marketing|series=ITBP Textbooks Series|editor1-first=Philip J.|editor1-last=Kitchen|editor2-first=Tony|editor2-last=Proctor|publisher=Cengage Learning EMEA|year=2001|isbn=978-1-86152-546-8}}
* {{cite book|title=Joseph M. Juran: critical evaluations in business and management|editor1-first=John Cunningham|editor1-last=Wood|editor-link1=John Cunningham Wood|editor2-first=Michael C.|editor2-last=Wood|publisher=Routledge|year=2005|isbn=978-0-415-32571-4|first1=Carol A.|last1=Reeves|first2=David A.|last2=Bednar|chapter=Defining Quality}}
* {{cite encyclopaedia|article=Customer|encyclopedia=Encyclopedia of health care management|series=Sage eReference|editor1-first=Michael J.|editor1-last=Stahl|publisher=SAGE|year=2004|isbn=978-0-7619-2674-0|first=Richard C.|last=Reizenstein|url-access=registration|url=https://archive.org/details/encyclopediaofhe0000unse_f8p9}}
* {{cite book|first=Christian|last=Stracke|chapter=Process-oriented quality management|title=Handbook on quality and standardisation in e-learning|editor1-first=Ulf-Daniel|editor1-last=Ehlers|editor2-first=Jan Martin|editor2-last=Pawlowski|publisher=Springer|year=2006|isbn=978-3-540-32787-5}}
* {{cite book|title=Six Sigma: SPC and TQM in manufacturing and services|first=Geoff|last=Tennant|publisher=Gower Publishing|year=2001|isbn=978-0-566-08374-7}}
== Further reading ==
* {{cite book|author-link=Joseph M. Juran|first=Joseph M.|last=Juran|title=Quality Control Handbook|year=1988|edition=4th|location=New York, NY|publisher=McGraw-Hill|isbn=978-0-07-033176-1|url-access=registration|url=https://archive.org/details/juransqualitycon00jmju}}
* {{cite journal|doi=10.1300/J090v06n02_14|journal=Journal of Professional Services Marketing|title=Applying the Internal Marketing Concept Within Large Organizations: As Applied to a Credit Union|first1=Patriya|last1=Tansuhaj|first2=Donna|last2=Randall|first3=Jim|last3=McCullough|volume=6|issue=2|year=1991|publisher=Taylor & Francis|pages=193–202}}
* [https://web.archive.org/web/20130202004458/http://www.pidesc.com/forget-demographics-target-communities-instead/ Forget Demographics. Target Communities Instead (Marketing)]
== External links ==
{{Sister project links|s=no}}{{Authority control}}
[[Category:Sales]]
[[Category:Supply chain management]]