Customer and consumer are two words often used interchangeably, but they are not interchangeable.
Each one relates to your business in a different way, and it’s important to understand this. Read on to discover the key differences between each term and how they relate to your bottom line.
Who are consumers in business?
A consumer is anyone who uses a product or service, whether for personal or business use.
Who are customers in business?
A customer is anyone, individual or business, who purchases a product or service. The two types of customers are trade customers, who don’t use what they purchase, and final customers, who do use what they purchase. All customers are important because they are what makes a business its money.
A customer always purchases a product or service, but might not be the end user. A consumer is always the end user of a product or service, but might not have purchased it. A customer becomes a consumer if they make a purchase and use the product or service themselves.
Customers can give consumers a product as a gift, resell it in original form or as something new, or designate a product or service for use by a specific group of consumers. For example, a library purchases computers (customer) for library patrons to use (consumer).
The point at which a customer can become a consumer can be challenging to follow, so let’s go over an example. Say a coffee shop purchases coffee beans that it will later resell to people who come into the store. The coffee shop is the customer.
Someone who comes into the store to buy the coffee is a customer at point of purchase, but becomes a consumer if they drink the coffee themself. If the person who bought the coffee purchased it for someone else, they remain a customer and the consumer is whoever drinks it.
Customer vs. Consumer Key Differences
Remembering the difference between a customer and consumer is based on three key things: who, motivation and payment.
A customer is an organization or individual who purchases a product or service with the motivation to resell, gift, or use it. A customer always makes a payment.
A consumer is anyone that uses a product or service, but they don’t always pay for it.
Customer vs. Consumer Support
All businesses have customers, but not all businesses have consumers. The difference between the two is important because it helps you have the correct support practices for your specific clientele.
For example, as mentioned above, a textile wholesaler sells to other businesses (customers) that make clothing from the textiles that are used by consumers. The wholesaler needs customer service for the businesses that buy those textiles, not a support team that answers consumer questions about delivery delays.
A business that has both customers and consumers needs support practices that are specific to both audiences. For example, an enterprise business that buys software for its employees’ day-to-day job activities is both a customer and consumer. That business may have a customer success manager that deals with the enterprise side of support, like payment issues, and a regular support team that answers employee (consumer) questions about how to use your products.
Customer vs. Consumer Examples
Let’s go over some example scenarios involving customers and consumers.
- A business that purchases textiles to make clothing to resell is a customer.
- A manufacturing company buys parts to build a car. The manufacturing company is a customer.
- A chef who buys produce at the grocery store to cook at their restaurant is a customer.
- A customer purchases a bed for their dog at a pet store.
- A consumer goes to a library to use the free wifi.
- A consumer receives a birthday gift from a friend.
- An employee that uses software at their job to complete day-to-day duties is a consumer.
- Someone who gets a free sample when visiting a store is a consumer.
Customer to Consumer Examples
- A customer that buys groceries from the store to cook for themselves and their family is also a consumer.
- A customer that buys new furniture for their home is also a consumer.
- A customer who purchases a movie ticket and then watches a movie is also a consumer.
- A customer that purchases software for themselves to use at work is also a consumer.
Over To You
Your business likely sells something to someone or some entity, but whoever you sell to might not be the end user. It’s important to know the difference when engaging in customer support, as it helps you tailor your support practices to the right audience.
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