Customer is a party that receives or consumes products. Several definitions narrow the meaning of customer to buyer, however, in case of theory of management it's wrong. E.g. In public administration customer doesn't pay for the services (some people pay taxes, but not everyone pays them). In case of enterprise we can distinguish:
- internal customer - organizational unit that in production/service process receives parts from another unit,
- external customer - receives products from the enterprise.
The idea of internal customer was created by Joseph M. Juran and presented in Quality Control Handbook. It was widely implemented in Total Quality Management and later also in other management concepts.
Importance of customer
We live in era of overproduction. There is more goods and services available than customers who want to buy them. Therefore, attracting and keeping customer is essential for each company. To attract customer organization needs good marketing, to keep him/her - also quality product is required.
10 Rules for customer attraction
- Everyone in company must be devoted to creating positive experience for the customer.
- Employees must know product they sell.
- Company must know their customers (e.g. through market research)
- Treat people with courtesy. All people.
- Never argue with a customer.
- Communicate to the customer what do you plan to do - inform about next steps in process.
- Always provide what you promise.
- Assume that customer tells the truth. When in doubts: customer is right.
- Focus on customers, not sales. Sales are the effect of you focus on customer.
- Create selling process that is easy for customer, eliminate paperwork, clicking through web-pages and waiting.
7 Rules for keeping customer
- Follow rules for customer attraction (see above).
- Keep the contact after selling the product.
- If there is a problem, inform the customer about it and about what you plan to do with it.
- Speak in customer's language, not technical.
- Know your customer and personalize communication, use customer relationship management (CRM) software.
- Let customer contact with you. Use social networking, customer forums, etc.
- Create a loyalty program.
Types customer relations
The two main types of relations are:
- B2B - business-to-business - refers to situation when one company makes transaction with another.
- B2C - business-to-customer - enterprise sells products to individual consumers.
It is important, that in most countries different legislation rules apply to those types. Usually individual customer is protected by law more than business entity. It is important difference for micro enterprises, where owner can choose between acting as business or as individual.
Other relations are:
- B2G - business-to-government (sometimes known as B2A - business-to-administration) - different from B2B because of public sector regulations, e.g. bidding requirements.
- C2C - customer-to-customer - two individuals, that don't run business, serve each other. This type gets more popular thanks to e-commerce that enables people to easily contact with each other. Before e-commerce this type of relations was limited mainly to neighbourhood. It should be noted, that in some countries extensive C2C contacts can be treated by law as B2C due to tax rules and manufacturer responsibility.
- Service Level Agreement
- Quality management principles (including: customer orientation)
- Customer satisfaction
- Juran J.M., Quality Control Handbook, New York, NY: McGraw-Hill, 1988
- More on types of customer relations (Wikipedia)
Author: Slawomir Wawak