How Do You Define a Customer?

by Leanne Hoagland-Smith

Can you define the word customer? What does it mean to be a customer for your business?

Do you consider customers as people who just buy your products or services?

Are there different types of customers? If you cannot answer these questions, then how in the world can you develop customer loyalty?

Over the years, I have come to define customers as:

"Individuals engaged in transactions for mutual benefit or gain."

In this way, the definition extends beyond paying customers - to people who conduct transactions that result in some benefit or gain.

Much is written about both external customers (clients) and internal customers (employees) especially with the 21st century business focus on customer loyalty through improved customer service.

Research continues to reveal that companies with high levels of loyal customers experience far greater growth both in sales and profits.

Over the years from my corporate to my consulting experiences, I have come to identify customers whether internal or external as one of these 3 types:

Explorers - These individuals, as clients, buy what you sell, explore to buy more and are the sources for innovation. Employees who are explorers do their job with focus and then explore to see how they can help others. Explorers are loyal and will rave about your business to everyone they meet.

Vacationers - As clients, they patronize your business, but will travel next door if the price is better. Vacationers as employees will do their work, but can be easily distracted. They will hardly ever go beyond what they are supposed to do. Whether the vacationers are clients or employees, their loyalty can be quickly switched to your competition.

Prisoners - Now, these folks truly do not want to be in your business. Possibly, your business is geographically close to them or you are the only distributor for a specific product or service.

Given a choice, they would not purchase from you even if you gave it to them for free. And when they do purchase from you they make incredible demands. If they are employees, prisoners barely do their work and are constantly complaining. Prisoners have no loyalty and will quickly share their displeasure with 6 to 10 other individuals.

Customer Service Coaching Tip: Take action by looking at your customers both external and internal. Identify any prisoners and determine how you can fire them even if they are paying customers.

Then set goals within your customer loyalty growth action plan to begin to convert a percentage of your vacationers into explorers. Track the results from that action plan.

You should realize both an increase in profitability and a decrease in operating costs.

About the Author