Understanding the actual meaning of specific business and marketing terms can be tricky for those new to the business world—and even those who aren't.
Let’s look at the terms customers and consumers. While often used interchangeably, these terms can represent entirely different people but can also describe the same person. That’s why it’s crucial to learn the ins and outs of both terms.
Differentiating between your customers and consumers can benefit you as a business owner, so read on to find out how!
What Makes Someone a Customer?
A customer is anyone who buys a specific product or service. Customers are the individuals who purchase a product or service, but they’re not always the ones who consume it.
For example, when you purchase food for your family at a supermarket, you’re performing the shopping and paying for the groceries, so you are a customer. Your family that uses the groceries but was not part of the buying and paying process are consumers, not customers. That said, if you also used the groceries you bought, then you are both a customer and a consumer.
What Makes Someone a Consumer?
A consumer is someone who consumes — or uses — a specific product or service. A consumer may or may not be a customer, meaning the consumer is not always the individual who made the actual purchase.
Many consumers, like children, may not have actual buying power as a customer. Despite a consumer’s potential inability to purchase items or services, they can still heavily influence buying decisions and are a critical part of the marketing and sales process.
How Are Customers & Consumers Different?
Though the difference between customers and consumers may seem somewhat irrelevant, marketing strategy is rather critical. The tricky part is that sometimes customers and consumers are the same people, and sometimes they are not.
When creating a marketing plan, it is important to have a firm grasp of who is purchasing your goods or services and who is actually consuming them.
Some industries have customers and consumers that are one and the same. For example, clothing retailers have a higher percentage of customers who are also consumers because many people prefer to personally purchase clothes for themselves.
Then there are industries, especially those that deal in items that are typically purchased as gifts, that see very few customers who are also consumers due to the nature of their business. For instance, a bakery specializing in custom cakes for celebrations will find that the people purchasing their cakes are not typically those consuming them.
Differentiating between your customers and consumers is essential when you are developing a targeted marketing campaign. For example, toy companies need to appeal directly to children (consumers). However, their marketing strategy cannot completely ignore details that their parents (customers) are concerned about, like safety and cost. Although the child’s interest may entice a sale, a parent’s willingness to purchase the item is equally, if not more, important.
Why Does Targeting Customers & Consumers Matter?
As a business owner, targeting the right people to purchase your products or services is vital to your business’s success. If you’re attempting to do this without understanding the difference between customers and consumers, you may target the wrong audience. And if you’re targeting the wrong audience, you could be failing to retain customers — or even convert them in the first place.
Let’s turn to the toy industry again to further illustrate how the distinction between customers and consumers can be extremely important to sales and marketing strategies. In this case, the children, the consumers, are typically not able to purchase a product without their parents, the customers. The parent ultimately makes the purchase, but the child can heavily influence the parent’s decision to buy. That said, the parent must also deem the toy safe and of good value in order to purchase it in the first place.
Therefore, all marketing campaigns must appeal to both parents and children. Ignoring either side of the customer/consumer equation for toy companies could negatively impact the success of their marketing and sales initiatives.
How Do I Know If Customers or Consumers Are Driving Sales?
The only way to know whether customers, consumers, or a mix of the two is driving sales is to examine both groups and examine their habits. Depending upon your industry or even niche within an industry, you may have to do some investigating.
To start, ask yourself if the person who actually makes the payment for the product or service is the same person who will use or consume it. More often than not, there is some customer-consumer overlap.
Next, determine the extent of consumer-customer overlap and the percentage of your sales that can be attributed to each group. If customers and consumers make up two distinct groups for your business type, like the toy industry, you will want to develop a marketing strategy that distinctly appeals to both groups.
Understanding the difference between purchasing and consuming your product or service puts you in a better position to target the right audience, grow your business, and increase your sales.
Discover How EZ Texting Can Help You Target the Right Audience
Now that you’re an expert on the distinction between customers and consumers, it’s time to market your business effectively. EZ texting is the perfect resource to help you target your audience, retain clients, and create personalized messages that connect your customers and consumers to your brand.
Take advantage of EZ Texting’s SMS marketing services today and watch your business reach more customers and delight more consumers. Consider exploring our no-risk free trial to see if EZ Texting is the right fit for you.
