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What is a Customer: Characteristics, Types and Functions

You must have heard the term customer often. However, what exactly is a customer and what is its function for business development?

Customers are always the main concern of every company. The reason is, without customers of course there will be no income. Then, without income, the company cannot survive.

Therefore, understanding customers, from their definition to their characteristics, is very important for business success. Customers are not just buyers of products or services; they are part of the business ecosystem and play an important role in the company.

A deep understanding of customer types can help companies develop more effective and efficient marketing strategies.

In this article, you will find out various aspects about customers, starting from definitions, characteristics, to types and functions in business.

Definition of Customer

Customers are individuals or organizations who buy goods or services from a company. In business, they are the most important element because they are the main source of income for the company.

The success of businesses depends largely on their ability to attract, retain and satisfy customers. Without customers, a company cannot operate and generate profits.

Customer Characteristics

After understanding what a customer is, you also need to know what the characteristics of the customer are.

Companies need to deeply understand who their customers are and what they want. This understanding includes not only knowledge of their needs and expectations, but also the unique characteristics that shape their purchasing decisions.

Here are some characteristics of customers:

Needs and Desires

Customers have certain needs and desires that they want to fulfill. Companies must be able to identify and understand these needs and desires to be able to offer appropriate products or services.

Hope

Customers have certain expectations for the products or services they buy. These expectations include quality, price and service.

If these expectations are not met, customers may look for other alternatives.

Experience

When customers interact with a product or service, it greatly influences their satisfaction. Positive experiences can increase customer loyalty, while negative experiences can cause them to switch to competitors.

Loyalty

Customer loyalty is their level of loyalty to a particular company or brand. Loyal customers tend to make repeat purchases and recommend products or services to others.

Communication

Customers often communicate with companies through various channels, such as email, telephone, social media, and face to face. Effective and responsive communication can increase customer satisfaction.

Types of Customers

Understanding different types of customers is key to designing effective business strategies. Each customer has different behaviors, needs, and preferences, which influence how they interact with a company.

The following are several types of customers commonly found in business:

New Customer

Customers who are buying products or services from the company for the first time. The company must give a good impression to ensure that these customers return to make purchases.

Loyal Customer

Customers who consistently make purchases from the company over a long period of time. They are often loyal advocates of the brand and contribute significantly to the company's revenue.

Potential Customers

Individuals or organizations who have the possibility of becoming customers in the future. Companies need to make marketing and sales efforts to attract their attention.

Passive Customer

Customers who rarely make purchases or only buy in small quantities. Even though their contribution to revenue may be small, they are still important because they can turn into loyal customers.

Former Customer

Customers who previously purchased a product or service but no longer do so. Knowing the reasons behind their decision to stop purchasing can help companies improve their services and products.

Customer Function in Business

Every business that wants to develop and survive in the long term must understand the importance of the role of customers.

Here are some customer functions for business that you need to understand:

Source of Income

Customers are the main source of company income. Without customers buying products or services, companies cannot make money and remain operational.

Feedback

Customers provide valuable feedback regarding products or services. This feedback can help companies understand their strengths and weaknesses, as well as improve and develop new products or services.

Word-of-Mouth Marketing

Satisfied customers tend to recommend products or services to others. Word of mouth marketing is one of the most effective forms of marketing and can increase a company's reputation and market share.

Product Innovation

By understanding customer needs and desires, companies can develop new products that are more innovative and in line with market demand.

Loyalty

Satisfied and loyal customers tend to make repeat purchases and form a stable customer base. Customer loyalty can also help companies survive in difficult market conditions.

After reading the description above, of course you already understand what a customer is and its benefits for business, right?

Customers are a crucial element in the business world. In a competitive business environment, the ability to properly meet customer needs is key to achieving long-term success.

Companies must always focus on customer experience, loyalty and innovation to remain relevant and competitive in the market. For this reason, a deep understanding of customer management is mandatory.

Learn more about how to maintain satisfaction and good relationships with customers through the Customer Satisfaction & Relationship program from prasmul-eli.

With a learning duration of two days, this ISO 9001:2015 certified program has the following 10 discussions: