Customer

In the worlds of sales, commerce, and economics, a customer is the recipient of a good, service, product, or idea. This person obtains these items from a seller, vendor, or supplier. This usually happens through a financial transaction. This is an exchange involving money or some other valuable consideration.

While people often use the terms buyer or purchaser, there are subtle differences in how we name these roles. Understanding these roles helps us see how modern economies function.

Terminology often depends on the type of relationship being formed. Generally, the term customer describes someone purchasing goods or services. For example, grocery stores, banks, and restaurants usually use the word customer. In contrast, the term client often refers to those receiving personalized advice or solutions. Law firms, film studios, and healthcare providers tend to prefer the word client. The word client comes from the Latin word "clientes," meaning "to incline" or "to bend." Unlike regular customers who may buy based on price, long-term clients often buy based on trust and experience.

When customers return habitually, they create customs that support sustained commerce. This repetition allows a seller to develop statistical models. These models help optimize production processes, which are the ways goods or services are made. They also help optimize supply chains. A supply chain manages the location and ownership changes of goods. An "end customer" is the specific person at the end of this chain. They are the ones who ultimately utilize the goods or services.

In the 21st century, experts categorize customers into several distinct types. One type is the entrepreneur or trader, also called a commercial intermediary. This person is a dealer who buys goods specifically for re-sale. Another type is the end user, or ultimate customer. This person does not re-sell the items but is the actual consumer. It is important to note that a customer and a consumer are different. A customer purchases the goods, while a consumer actually uses them. An intermediate customer is a person who buys goods but is not a consumer at all.

There are also specific categories for large organizations. Entities like government bodies, manufacturers, and medical institutions are often called industrial customers. They are also known as business-to-business customers. These groups either use the services themselves or incorporate them into other finished products. To distinguish between groups of people, Six Sigma consultants use specific labels. A customer is someone who has actively dealt with a business recently. A "not-customer" is a past customer or someone who chooses a competitor. A "non-customer" is someone active in a completely different market segment entirely.

Some experts also discuss the concept of the "internal customer." This idea was popularized by Joseph M. Juran in 1988. An internal customer is someone directly connected to an organization, such as an employee or stakeholder. They use the output of one part of a company as the input for another. Many organizations believe that satisfying internal customers is a prerequisite for satisfying external customers. However, this concept is not accepted by every management expert. Some argue that the term "colleague" is a more accurate way to describe internal relationships.

Famous thinkers have offered strong arguments against the idea of internal customers. Peter Drucker believed that a customer must have the power to say "no." He argued that customers have the choice to accept or reject an offer. In a company, employees are in a line of subordination. They must follow company processes and cannot choose which colleague to work with. Drucker believed that inside an organization, there are only cost centers. He famously stated that the only profit center is a customer whose check has not bounced. Similarly, W. Edwards Deming advised managers to break down barriers so departments work as a team rather than as separate suppliers and customers.