Leadership Skills

Customers and Consumers

Identifying an organization's customers and consumers may be more complex than you realize. Most people use these two words interchangeably, but there is a difference.

• Customers purchase products and services
• Consumers use products and services

An easy way to distinguish between the two terms is to think of a child who wants a new toy. The child would be the consumer (user) of the toy, and the parent would be the customer (the one who paid money) for that new toy.

External customers and consumers

The external customers and consumers are those who purchase and use the products and services provided by an organization. These are the people who are targeted for marketing and new research. Because these individuals are outside the day-to-day work environment, they do not individually contribute to the culture; however, organizational polices and procedures related to customer service will have an impact on employees’ attitudes. Attitudes will likely impact the workplace culture.

Internal customers and consumers

Besides the obvious person-on-the-street or customer who purchases products or services, there may also be internal consumers. For example:

• Within organizations there are typically accounting departments who process accounts receivable and payable—they have consumers internally and externally.
• Human resource departments hire employees for all departments, and in that way, they provide products and services to those departments.
• If technology is used within an organization, the information technology staff provide products and services.
• If an organization has vendors or distributors, those are also considered internal customers because they are part of the internal process rather than purchasing products or services produced by the organization.

The interplay and interaction between people within the organization is important to the workplace culture. Here are some examples to consider:

• A vending machine attendant.
• The custodian.
• The receptionist.
• A person stopping by about a posted job.
• The chair of the Board of Directors.

For each of the examples above, consider how each of these individuals would be treated by employees. Are employees welcoming or distant to the individuals? Would gender, race, education level, or nationality matter? Would appearance, dress, and grooming matter?  If there are differences, what does that say about an organization’s culture?