Who Is the Customer?

Discovering who the customer is can be a worthwhile investigation. Sometimes even external customers are not obvious. In business-to-business commerce, the people who use a product or service may not be the same people that make the purchasing decision. Many times committees or purchasing agents are the decision-makers for large purchases such as computers or telecom services.

Julian is a senior purchasing agent for a major pharmaceutical manufacturer. He makes purchasing decisions on information technology hardware and service contracts. His decisions are based on proposals, bids, and the criteria that are established by the people that use the equipment and services he is charged with buying. Usually the vendor companies and salespeople are constantly in touch with Julian when a contract is being renewed or new purchases are being made. Between purchases or renewals these same vendors and salespeople do not do anything to create loyalty with Julian. They spend their time developing relationships with the folks that use their services or equipment. If all things are equal, Julian chooses the vendor with the lowest cost that meets the bid specifications. But all things are never really equal. They only appear equal because the salesperson or account executive has not spent time in learning what the customer values and then demonstrating the unique advantages of their solution. Most importantly, purchasing agents and committee members are also influenced by the principles that create loyalty. Effectively communicating with these decision-makers on a regular basis will create a relationship of loyalty that becomes one of the reasons why all things are not equal.

Steve and his family own and operate the Happy Times Carnival out of Kansas City, Missouri. Steve inherited the business from his father. When Steve's father ran the business the family traveled from town to town for nine months every year. While the carnival was operating in one town Steve's father would race ahead to the next town to try to find a place to set up. Occasionally, Steve's father could make arrangements to set up at the same shopping center or parking lot every year, but for the majority of their engagements every town was a new venue. Steve's father was solely concerned with having his customers come back several times during a five-day engagement. The value of customer loyalty beyond each engagement was not part of his thinking. Steve's father made a living, but never reached his potential.

Today Steve and his family provide a turnkey carnival for churches, businesses, and shopping centers. Their services include rides, games, and concessionaires. Their external customers are the patrons of the carnival: the little kid with a quarter in his hand wanting to ride on the carousel. By the time they return to a town again the next year, the little boy (their external customer) is a year older and doesn't have any interest in riding on the carousel. Steve and his family are certainly interested in providing a safe and fun environment for their external customers, but they are even more interested in their true customer, the business, church, or school that hired them. By applying the five principles that create loyalty, Steve's family business has grown and prospered beyond what Steve's father could have ever imagined.

The point here is not to define every person with whom you come into contact as a customer; however, it is important to identify internal and external customers. You can maximize the value of every business relationship by expanding your definition of "customer" to include everyone you want to deal with on a repeat basis as a "customer." It is the prerogative of every business, business owner, entrepreneur, and everyone else who is in business to enjoy the benefits of loyal internal and external customers. Each of the five principles is applicable to every business. And although every business won't use the same activities to create loyalty, every business can develop specific activities that support the five principles.