What Is a Customer?

A customer is an individual or business that purchases another company's goods or services. Most public-facing businesses compete with other companies to attract customers, either by aggressively advertising their products or by lowering prices, in an effort to expand their customer bases.

How Customers Work

Businesses often honor the adage "the customer is always right" because happy customers are more likely to award repeat business to companies who meet or exceed their needs. Many companies closely monitor their customer relationships in order to solicit feedback on methods of improving existing product lines.

[Important: The term customer, which is an individual who purchases goods or services, is synonymous with the term consumer.]

Customers Are Consumers

The terms customer and consumer are nearly synonymous. Customers are defined as end consumers of goods or services, who traditionally make purchases with their own money or credits cards. Customers differ from purchasing agents, who use corporate capital to buy goods at wholesale for commercial or industrial use.

Customers Can Be Studied

Businesses frequently study their customers' profiles to fine-tune their marketing approaches and tailor their inventory to attract the most lucrative possible customer base. Customers are often grouped according to their demographics, such as age, race, gender, ethnicity, income level, and geographic location, which all may help businesses cultivate a snapshot of the "ideal customer," or "customer persona." This information helps companies deepen existing customer relationships and reach untapped consumer populations, in an effort to increase traffic.

Customer Service

Customer service, which strives to ensure positive experiences, is key to a successful seller/customer dynamic. Loyalty in the form of favorable online reviews, referrals, and future business can be lost or won based on a good or bad customer service experience. In recent years customer service has evolved to include real-time interactions via instant message chats, texting, and other means of communication.