Introduction to customers, consumers and clients

This section looks in more detail at what we mean by ‘customers’ and how they are different from ‘consumers’ and ‘clients’. It considers all external and internal stakeholders as customers, consumers or clients of a marketing activity. So, an internal stakeholder might be the consumer of a service performed by another department in the same organisation. This is the case when staff of an organisation are consumers of the stationery and other equipment purchased by the purchasing department. The key differences discussed in this reading are between those stakeholders who buy a product or service (the customers) and those who use it (the consumers). Customers and consumers may be the same or different people. Note what distinguishes a customer from a client and the different kind of relationship each has with a service provider. In your own work context, when are you a consumer, a customer and a client? Who are your consumers, customers and clients?

Customers, consumers and clients- An understanding of marketing requires a clear understanding of the terms customer, consumer and client. The customer is the person buying from an organisation. The customer can also be another organisation, for example, when a bookstore buys from a book publisher. The customer will also be the consumer if the person or organisation uses what has been bought. This is not the case with the bookstore: there the bookstore is the customer of the publishing company and a person buying a book from the bookstore is likely to be the consumer. Here are two simple examples that highlight the distinction: You choose, buy and eat an ice cream. Here you are the customer and consumer. Your child chooses and eats an ice cream but you pay for it. Here your child is the consumer and you are the customer. The second example is of interest because marketing activity is likely to be focused on the consumer rather than the customer. Consumers and customers may not share the same view, and marketers often use the influence that consumers (in this case, children) have over customers (in this case, parents). For example, marketers advertise tempting toys or food items during breaks in children’s television programmes or by placing sweets within reach of small children in supermarkets. They are thus attempting to use children’s ‘pester power’ to persuade parents to buy the goods in question. As a result they are often criticised for addressing the wants of children without much consideration of the expectations of their parents, the customers. When we look at purchases made by organisations, in most cases, customers and consumers are not the same. Many purchasing decisions in organisations are made by purchasing departments. As a manager you may be allowed to take decisions to buy items costing up to a certain amount of money. An exception might be for products used in many parts of the organisation and which are supplied by another department, for example, ink for printers and printer paper. For these and more expensive items, many managers are required to use the equipment and materials which someone else in the organisation has chosen – and these buyers may or may not respond to managers’ needs or wants. We will look in more detail at the buying behaviour of individuals and organisations later. Customers and clients Now we turn to the difference between customers and clients. The term ‘client’ is generally associated with the provision of professional services (such as accountancy and legal services). In these contexts, the specific service being provided is normally discussed and agreed between client and provider. While the client has more influence over the specification of the product or service being provided, the service provider – the marketer in this context – is often in a position to advise the client as to what his or her needs and wants actually are, and then charge fees for delivering services that meet these needs. You should immediately recognise that the power balance between the marketer and the person being provided with a product or service can be quite different according to whether the person is a customer or a client. In recent years it has become customary to use the terms customer or client for the recipients of public and not-for-profit services. Before then, these recipients were called passengers, patients, students and so on. These more traditional terms had the advantage of indicating to service providers the needs and expectations of these service recipients. It is argued that calling everybody a customer reduces every service to a commercial transaction – and many people would be unhappy to think that their relationship with their doctor or teacher is nothing more than a commercial transaction. This is partly an issue of terminology and becomes less problematic if we recognise that many aspects of marketing are useful and appropriate in not-for-profit contexts. In the not-for-profit context we might consider the example of a doctor in the UK National Health Service (NHS) wanting a patient’s blood sample tested. Here, the patient is the doctor’s client and the doctor then becomes the customer of the blood testing laboratory. The laboratory must deliver a prompt service to satisfy the expectations of the doctor as a customer and the patient as a client. When we look at internal stakeholders, an interesting feature is that ‘consumers’ often have no decision over what they consume. For example, in an organisation’s wage and salary payment system there is usually no choice of products or suppliers if an employee wants to be paid. There are exceptions, however. For example, all IT systems within an organisation may be provided by the IT department but the internal customer or consumer may be able to influence the design. In addition, while we can see clearly who is paying for a family’s ice creams, holiday or car, in internal marketing contexts it is often not as clear who is paying and how much is being paid for the services or goods supplied. If you are a budget holder, you will know what items are charged to your budget. But if you are not the budget holder you may have little or no idea of what internal services actually cost.