The terms "customers" and "clients" have been frequently used interchangeably. Semantics, right? Despite their common usage and similarity, these words have different meanings and implications for your business.
We highlight 3 key differences in this blog and why it matters when making strategic decisions for your long-term success.
What’s a Customer?
Customers are individuals or businesses that purchase a product or service casually, primarily driven by the immediate need or value of the product. Businesses often have little to no personal interaction with customers, especially in business models like retail or e-commerce.
For example, a person buying a shirt from a retail store is treated as a customer because the interaction is transactional and ends with them buying a product. After the purchase, the store may not follow up unless they're running a promotional campaign.
Customers generally share common factors and traits. They often make spontaneous buying decisions based on price or immediate necessity. Their loyalty is typically low, as they may switch to competitors if a similar product is offered at a lower price.
Industries that generally serve a “customer” include:
Retail stores
Restaurant
Theme parks
What’s a Client?
On the other hand, the term "client" implies a more profound, ongoing relationship between a business and an individual or organization. Clients continuously engage with a business because they value the personalized service and custom solutions, not only the products or services offered.
Consider a law firm and its business relationships. Individuals and businesses that seek their services are considered clients because of the consultative, ongoing nature of the service provided. This relationship is usually long-term, often involving a series of interactions.
Just like customers, clients possess distinct characteristics. Their purchase decisions are mostly informed by the perceived long-term value and trust of doing business with a company. Consequently, the client's loyalty towards the business is usually high, giving the business a sustainable edge over competitors.
On the Client-based services:
Customer Vs. Clients: 3 Key Differences
In the previous examples, it's easy to spot a customer vs client. While it can get confusing, there are key differences between the two. Here's how to identify them:
1. Involvement and loyalty
While customers engage in sporadic, transactional purchases, clients maintain ongoing relationships with businesses due to their high level of involvement and loyalty. Customers leave feedback on a general note, while clients leave testimonials about their experiences.
2. Communication and customer service
Customers receive generic service, often with limited communication. In contrast, clients enjoy personalized attention and service, complete with continuous, targeted communication.
3. Purchase decisions and buying behavior
Customers make impulsive buying decisions, primarily driven by price or immediate need, while clients' purchases are deliberate, anticipating long-term value.
However, Roberta Riserbato of Hubspot says, “It's important to note that some companies can have customers and clients”.
For example, SaaS companies can often serve both. They can have customers who subscribe to their services and have "high-value” customers that turn into clients who seek custom solutions and professional services.
Shifting From Customers to Clients: Why It Matters
Understanding the difference between customers and clients isn't just semantics, it has real implications for how you communicate, how you sell, and ultimately how you create and deliver value in your business.
Identifying whether a business serves customers or clients has important implications for its marketing strategies and sales process. These simple differences could enable a business to shift from having the usual customer to a loyal client.
Here are some strategies to do that:
Identify Customers Open to Becoming Clients
These could be customers who regularly purchase from the business or those who require additional services. For example, a Fitness Gym can offer one-on-one training sessions with a coach for their customers. These customers are now clients who availed of professional services.
Offer Custom Solutions
This may involve adjusting your service or product range or adopting flexible pricing strategies. Customer management tools often offer standard pricing for regular individual customers but offer premium features and huge discounts on an enterprise level. Account managers interact directly with the decision-makers to strategize and plan.
Enhance Client Service
Companies who want to turn customers into clients do not only respond to inquiries but also anticipate their needs and exceed their expectations. Client-based companies usually assign a Client Success Manager (CSM) or a Sales Manager for their clients to personalize their interactions and cater to their needs.
Take Advantage of Client Feedback
Account managers should utilize feedback analysis to improve their relationships with clients. What’s the buyer’s perception of your sales managers? How do clients see your company in terms of providing services? Are your sales managers up to par with the expectations of the clients?
Most businesses have a transactional level of relationship with customers that come and go. But, a business looking for long-term growth and low churn rates will have Trusted Advisors catering to their clients. Learn more: 9 Ways Trusted Advisors Can Nurture B2B Relationships
Evaluate your business, are you dealing more with customers or clients? Consider implementing the strategies above to transform your one-time customers into loyal clients. It could be the key to unlocking the next stage of growth and success for your business.