The words “customer” and “consumers” are often interchangeably used and are easily confused with one another. It is high time that common folk and businesses alike learn the meaning of “customer” and “consumer”.
So when do we use “customer” and “consumer”, and for whom?
Definition Of Customer
A customer is the individual/business/organisation who buys the offering from the seller via a financial transaction or monetary exchange.
In simple terms – Customer is the buyer of the offering.
Example: A person buying a gift for someone from a gift shop – the person is a customer of the gift shop.
In general, businesses tend to focus on getting more customers as they help them grow and gain more profits. There are different ways of classifying customers based on the different segments of businesses. But for the sake of simplicity, we can classify them into two categories:
- End-Customer – They are the people who buy the product offered for their own use, in turn becoming the consumer of the specified product.
- Reseller – They are the intermediary who buys the goods for selling it to others and hence just acting as a customer and not as a consumer of the purchased product.
Role Of Customer
Customers help drive businesses and are their main focus – it is by selling to the customers that they are able to sustain themselves and run their operations. Without customers, there would be no point of businesses staying open.
Customers help in improving the quality of the products and services offered by companies and businesses. This is achieved by surveying the current customers – generally termed as Customer Relationship Management (CRM) – in order to measure and improve upon the satisfaction and expectations of the customers.
Definition Of Consumer
A consumer is an individual who is the end-user of the product or service offered by a business.
In simple terms – Consumer is the end-user who consumes the offering.
Example: Take a kid who recently got candy from his dad. Even though his dad was the customer who bought the candy, this child is the consumer who ends up consuming the product.
Role Of Consumer
While a customer may or may not consume the purchased product, service or good, a consumer on the other hand actually consumes/uses the product. This makes consumers great for businesses to judge the actual usefulness and the genuineness of their products.
Consumer behaviour is a great tool in identifying the product that is currently in demand and the ones that have gone obsolete. They are used by businesses to target their ideal audience easily, in turn helping them have the maximum impact on the company’s sales and growth.
This brings us to the fact that consumers can also be the customers – but not always.
Relationship Between Customer And Consumer
Customer and consumer can be used interchangeably – quite simply because a customer and consumer can be the same person. Buying groceries for oneself is a great example.
A person buying groceries from the supermarket for himself becomes the customer of the supermarket – they are paying for the groceries provided by the supermarket. Upon consuming the groceries, the customer also becomes the consumer.
But this is just one case where an individual can be both, the customer as well as the consumer. But they differ – hence why there are two terms, customer and consumer.
Difference Between Consumer And Customer
The buyer of goods or services is known as the Customer.
The user of goods or services is known as a Consumer.
Resale or Consumption
Consumption only; No resell
Yes; Price is paid by the customer
Not necessary; Price may or may not be paid by the consumer
Individual or Organisation
Individual or group of people
It is quite clear that customers and consumers are similar to one another. But they vary in slight context and that’s is where people generally miss out on and use them interchangeably.
Basically, a customer is the purchaser of products/goods/ services while a consumer is a person who is the user of these products/goods/services. The customer doesn’t really need to use the product to be called as such – the act of buying makes him a customer.
A customer may have bought the product for their own needs or, for the necessity of consumption or, for adding value to themselves or others. A customer could have also bought the product with the intention of reselling it to others. Meanwhile, a consumer is the one who bought the product for the purpose of consumption and personal use only.
Customer pays for the purchase of the product or service. They also may make back the money spent by reselling or from another party – in case he had bought it for another person. A consumer, on the other hand, does not necessarily pay for the product. Take the example of gifts given to children that are purchased by parents – in this case, the children are the consumers and parents are the customers of the gift shop.
Finally, a customer may be an individual or an organisation or a business – buyers of products. A consumer can be an individual or a group of people or a family – users of products they may or may not have purchased.
Go On, Tell Us What You Think!
Did we miss something? Come on! Tell us what you think about our article on Customer vs. Consumer in the comments section.
Started out to become a developer but felt at home in the home of startups. The journey started from a single novel. Been an entrepreneur since schooling days. Interested in coding, reading and movies.
So which between the two is more important to an organization? A consumer or a customer?
A CONSUMER CAN BE DEFINED AS END USER OF PRODUCTS WHILE A CUSTOMER CAN BE SAID AS THE ONE WHO PURCHASES GOODS AND SERVICES
Great detailed content
I was just hired at a coffee shop. I was curious whether which term would be used. If a customer buys the coffee, then consumes it. Does that make them a consumer? They wouldn’t resale a cup of coffee but since they bought it, does that make them the customer or a consumer?
You will be dealing with them as a customer. That makes them a customer to you (the employee) and your coffee shop (the company).
They are consumers of the product that you sell.
While reporting about them, you would most likely be calling them “customers” (which is correct) rather than “consumers”.
It’s a fine line between the two and the article was written to educate others to use the right term at the right instances 🙂
Both are just not the opposite of one another. They do have their similarities as well as differences.
All the best!
An addendum to Bharath’s response:
If a customer (that’s any entity – individual or organisation – that makes a purchase or hire of goods or services from your company) bought bags of raw coffee grinds for example and you captured their details in your data system, including their EORI or VAT registration number, then in your reporting, that customer could be considered a non-consumer (reseller) but only if the recipient of the goods was not the organisation or individual representing that organisation.
Even so, it’s difficult to accurately gauge the intent the customer has for the goods unless the customer conveys them directly to you at point-of-sale (for example, if the customer was a business who agreed upon a drop-ship contract).
Most likely, though, your customers in the high-street shop will all be consumers.