16 Questions
What is the simplest definition of a customer?
Someone who purchases a good or service for themselves
What is the main difference between a customer and a consumer?
A customer is a purchaser of a good or service, while a consumer is a user
What term is used in the context of business-to-business transactions/interactions (B2B)?
Client
Who is referred to as a client in a service organization?
A customer who receives services
What is an external customer?
A customer who pays for a service and can find another service provider if unhappy
What is important for a successful business to do?
Know their customers
Why is market research important for a business?
To know the customers and their needs
What should businesses direct their marketing efforts towards?
Towards both the customer and the consumer
Who are internal customers?
Employees who provide services to each other within an organization
Why are internal customers important to an organization?
Because they can affect the satisfaction of external customers
What is a customer relationship?
The ongoing relationship between a customer and an organization
How is a customer relationship measured?
By the satisfaction of the customer through the purchase cycle and after receipt of goods/services
Why is customer loyalty important to an organization?
Because it leads to repeat business and loyal customers
What is the result of an organization not having loyal customers?
The organization will not thrive and may result in once-off purchases
What is an example of an internal customer?
An individual who receives services from their colleagues
What is the purpose of building a customer relationship?
To ensure repeat business and loyal customers
Study Notes
Defining the Customer
- A customer is someone who purchases a good or service, for themselves or for somebody else.
- Customers can make one or more purchases.
- Some customers are loyal to certain brands/stores, while others choose to shop around.
- A successful business is one that knows its customer to meet and anticipate their needs.
- Market research is crucial to understand a business' potential customer base and their needs and expectations.
Customer vs Consumer vs Client
- A customer is the purchaser of a good/service.
- A consumer is the user of a good/service, often targeted by marketing efforts.
- A client is used in the context of business-to-business transactions/interactions (B2B) and in service organizations providing legal, healthcare, consulting, etc. services.
- Note: Customers who buy services are not commonly referred to as consumers.
Internal Customer
- An external customer is a customer who pays for a service and can switch to another service provider if unhappy.
- An internal customer is internal to an organization, doesn't usually pay for the service, and doesn't have a choice of changing their service provider.
- Internal customers are employees who provide services to each other and are internal customers and internal service providers.
- Examples of internal customers include individuals who receive services from colleagues, franchisees, or business partners.
- Internal customers are important because their dissatisfaction can be passed on to external customers, resulting in negative outcomes for the business.
The Customer Relationship
- A customer relationship is the ongoing relationship formed between the customer and organization over time.
- This relationship is built through customer engagement via marketing, sales, technical help, customer service, and after-sales service.
- A customer relationship is measured by the customer's satisfaction throughout the purchase cycle and after receipt of goods/services.
- Key elements of a successful organization include having loyal customers who repeatedly bring business to the organization.
- Customer loyalty is crucial, as it results in repeat business, rather than one-off purchases.
Learn about the definition of a customer, building customer satisfaction, and exceeding customer expectations in this introductory module.
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