Customer: Meaning, Types and Management | CRM

In this article we will discuss about:- 1. Meaning of Customer 2. Types of Customers 3. Management.

Meaning of Customer:

Customers are the lifeblood of any organization be it a global corporation with thousands of employees and a multi-billion turnover, or a sole trader with a handful of regular customers. A customer, also called client, buyer, or purchaser, is usually used to refer to a current or potential buyer or user of the products of an individual or organization, called the supplier, vendor or seller.

The slogans “the customer is king” or “the customer is god” or “the customer is always right” indicate the importance of customers to businesses. Only customers judge quality; all other judgments are essentially irrelevant.

If an organization cannot at least meet its customers’ expectations it will struggle. Ideally a business organization should exceed its customers’ expecta­tions, thereby maximizing the satisfaction of its customers, and also the credibil­ity of its goods and services in the eyes of its customers. Customers normally become delighted when a supplier under-promises and over-delivers. To over- promise and under-deliver makes the customers dissatisfied.

Some of the facts about customer that every organization should know are:

1. A customer is the most important person in any business.

2. A customer is not dependent upon us. Business is dependent upon him.

3. A customer is not an interruption of work. He is the sole purpose of it.

4. A customer does business a favour when he comes in. Business is not doing him a favour by waiting on him.

5. A customer is an essential part of business not an outsider.

6. A customer is not just money in the cash register. He is a human being with feelings and deserves to be treated with respect.

7. A customer is a person who comes with his needs and his wants. It is organization’s job to fill them.

8. A customer deserves the most courteous attention an organization can give him. He is the life-blood of any business.

Types of Customers:

Based on unique behavioural attributes, customers are of following types:

1. Loyal Customer.

2. Discount Customer.

3. Impulse Customer.

4. Need Based Customer.

5. Wandering Customer.

1. Loyal Customer:

Loyal customer represents not more than 20 percent of organizations customer base, but make up more than 50 percent of its sales. They are called completely satisfied customers and these keep on returning to the organization. The organization need to communicate with these customers on a regular basis through telephone, emails etc. These people are the ones who can and should influence the organization’s buying and merchandising decisions.

2. Discount Customer:

Discount customer shops form the organization’s stores frequently, but make their decisions based on the size of discount. This category helps ensure that organization’s inventory is turning over and as a result, it is a key contributor to cash flow. They are called merely satisfied customers. It is advisable for the organization to target these customers as long as they are active or in discount seasons.

3. Impulse Customer:

Impulse customer does not come for buying a particular item at the store, but come into the store on a whim. They will purchase what seems good at the time. These customers maximize the profit on each transaction.

This is the segment, which an organization would like to serve. There is nothing more exciting than assisting an impulse shopper and having them respond favourably to our recommendations. The organization wants to target its displays towards this group because they will provide organization with a significant amount of customer insight and knowledge.

4. Need Based Customer:

Need based customers have a specific intention to buy a particular type of items. When they enter the store, they will look to see if they can have that need filled quickly. If not, they will leave right away. They buy for a variety of reasons such as a specific occasion, a specific need, or an absolute price point. It is difficult to satisfy these customers. These customers are habitual of particular brand.

It is important to remember that need based customers can easily be lost to internet sales or a different retailer. To overcome this threat, positive personal interaction is required, usually from one of organization’s top salespeople. They can also become loyal customers if they are well taken care of.

5. Wandering Customer:

Wandering customers have no specific need or desire in mind when they come into the store. Rather, they want a sense of experience and/or community. For many stores, this is the largest segment in terms of traffic, while, at the same time, they make up the smallest percentage of sales. Wanderers shop merely for the interaction and experience it provides them. Since they are merely looking for interaction, they are also very likely to communicate to others the experience they had in the store.

Therefore, although wandering customers cannot be ignored, the time spent with them needs to be minimized. Though they may not represent a large percentage of organization’s immediate sales, they are a real voice for organization in the community.

Managing Customers:

Customers are the usual source of income for an organization. Customers are also an exceptional source of information, which is vital to enable a business to succeed; i.e., giving customers what they want.

Managing customers means:

1. Knowing what customers want and need which enables the organization to focus on its production and service efforts.

2. Knowing which products or customers have most growth potential which enables the organization to focus on developing highest potential.

3. Knowing which products or customers are most or least profitable which enables the organization to focus on maximizing profit.

4. Knowing which customers will be advocates and supporters which enables the organization to provide references, case studies, and to safely test new products and services.