What is a Customer?

Confusion about CRM terminology is exacerbated by confusion over what constitutes a “customer”. Why?

It appears that many businesses are getting confused about the meaning of the word “customer”.

Recently, I travelled on a train and was a “guest” whilst in a hospital I was referred to as a Customer, not a patient.

Interesting.

Surely a Customer is one of these two definitions (from the Oxford Dictionary):

  • a person who buys goods or services from a shop or business:
  • [with adjective] a person of a specified kind with whom one has to deal:

I have observed government departments struggle with this. One example was at a UK Farming Payment Agency paying Agricultural grants and rebates to farmers.
Farmer Giles may be a client with whom the Agency are dealing but he is an applicant (a customer?) yet if Farmer Giles wife called the Agency regarding his affairs, she cannot be a client but an agent of the client? She wasn’t the client but she is not the customer either? And what of those buying something? Neither- both are applying for something and receiving something in return. However, the Agency decided to call them all “customers”. Clear cut?
Not exactly, see my original discussion on the complexities of the Pharmaceutical Industry. CRM software is often based on the premise that a customer has a financial relationship with you. In fact, the customer database tables often were those from financial applications. The trouble now is that customer databases are full of other non trading entities. It is therefore becoming an important “up front” question for organisations to ask “Who and what is a Customer to US?”

The variety of answers across the world explains why CRM means so many different things to different people. I explained my point of view in a previous post.

For those who may be sceptical about this argument, here is a question for you:

Who are the customers for organisations such as:

1. Political Parties

2. Tourism Agencies

3. Car Manufacturers

OK, now ask yourself whether the definition of a customer holds true across all of those examples. This is why each organisation must form its own view of what a customer is.

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