The word customer and consumer is used interchangeably today.What’s right? Should we, as marketing folks, understand where to use customer or consumer? Susan has some interesting take on this:
My real problem was that I’d crossed over from a world where the buyers of your services have individual names (financial services), to a world where the buyers of your goods are largely a nameless mass (most consumer products).
What’s the difference between a product and a service, really?
Here’s a nice definition for a service:
"Any act or performance offered that is essentially intangible and does not result in ownership of any thing" – Prof. Brian Engelland, MSU
You are dealing with a service when…
 Production and consumption are hard to separate. Examples: travel, investments
 Intangibles form a large part of what is being purchased. Examples: insurance, consulting
 There is no change of ownership. Customers typically rent a service, rather than owning it. Examples: credit card or loan, hotel room
 A sale that does not happen today cannot be recovered in the future. Examples: empty seats in a theatre, lost interest on a mortgage
 Customers must evaluate the purchase decision with few tangibles to go on. Examples: health care
 Output quality is variable, and depends on the performance of individuals. Examples: Hair styling, interior decorating, surgery
 Manner of dress, body language, and expressed language form part of the brand experience. Examples: air travel, retail banking
 Cycle of purchase is repeated through ‘rental payments’. There is no smooth movement through a consumption cycle, and there are frequent ‘moments of truth’. Examples: health club membership, anti-virus software rental, weight-loss groups
 Employees behavior and knowledge is central to delivery and quality. Examples: financial planning
 The memories of the experience may be as important as the experience itself. Examples: vacation travel, theme parks
 There are high degrees of customer contact during production. Examples: health care, spa services
 Competing offerings may differ in how much of the work of production is shifted to the buyer. Examples: online brokerage vs. full service, self-serve vs. full service gas station
 Suppliers assume real economic risks (exceeding the revenue potential) by choosing a given customer. Some interested customers must be rejected. Examples: credit cards, insurance, auditing
 Customers assume real economic risks (exceeding the fee paid for the service) by choosing a given supplier. Examples: mutual funds, home insurance
 Everyone calls them clients, users or customers, rather than consumers
So now you know. There you have it. Try to keep your customers and your consumers straight now, okay?