Allison has a Masters of Arts in Political Science. She has worked in the customer service and food industry since 2013.
You experience being a customer every time you buy food from a store, pay a cell phone bill, grab a cup of coffee from a local shop, or think about purchasing a new computer. A customer is any person or organization who might have interest in buying, or has bought, products or services from a company. Each time you pay a bill or buy something from a store you are acting as their customer.
In general, there are three basic types of customers.
- Current customers
- Past customers
- Potential customers
Each customer type influences a company differently.
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Imagine that you want to eat at your favorite restaurant. Because you are currently buying something from this restaurant, you are a current customer. A current customer is someone who purchases goods or services from a particular company over a period of time.
Not all products or services are equal. Thus, how a company determines a current customer from a past customer also varies. For example, you are not going to purchase a new computer as often as you go to eat at your favorite restaurant. How your favorite spot to grab a bite to eat determines whether you are a current customer or not is going to be different then how a computer store measures whether or not you are a current customer.
Keep thinking about that favorite restaurant. How often do you go? Do the employees recognize you? In some cases, a current customer will get extra special treatment because they buy more products or services.
This special treatment often occurs because current customers are the most important customer for any company. You see, it is much cheaper for a company to keep you happy and coming back than it is for them to market to new customers. Not to mention, most of the time a happy customer markets for the company. Have you ever tried to get your friends to go to your favorite restaurant? Bringing new business is just one way current customers serve as critical customers to any company.
Have you ever changed Internet or cable providers? If you used a specific cable provider for the past three years and suddenly decide to leave them for another provider, then you become a past customer of the initial provider.
Oftentimes you become a past customer because a different company provides a better offer. A past customer is someone who purchased goods or services from a particular company sometime in the past. Imagine that the new TV provider offers you the same TV channels for half the price of your bill from your previous provider. Chances are, you would be inclined to change companies.
Although there are many reasons a customer becomes a past customer, including a better offer, the process of becoming a past customer often occurs because of a bad experience. Imagine that a specific provider overcharged for services that you did not use, gave you the wrong channels, and had insufficient customer service. These experiences might lead you to seek business from other providers.
If a company notices that they have a growing number of past customers, then they might want to evaluate why their customers are leaving and what they can do to prevent the loss.
If you are in the age range to receive credit card offers, home ownership offers, or car purchase offers, you will receive them because the company sees you as a potential customer. A potential customer is a person or company who might be interested in or might purchase products a company offers.
Potential customers tend to be the group that a company targets. This means that the company will focus a lot of their marketing tactics on potential customers.
Potential customers are important because if they become a current customer, they will help the company to grow. Furthermore, potential customers can help a company to stay profitable if they lose a small number of current customers.
Let's review. Customers are individuals or organizations that have purchased, might purchase, or have stopped purchasing from a particular company. Understanding the various types of customers, including current, past, and potential customers, can help an organization to understand how they need to market to each group in order to sell their products and/or services.
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What is a Customer? - Definition & Overview
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