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Client vs Customer: What Is the Exact Difference in SaaS? Why Is it Important?

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Oftentimes, ‘client’ and ‘customer’ are words that are used interchangeably. If you use these two words for the same thing, you are not alone. Most people and businesses do. In fact, the difference between client and customer has mystified many in the world of business and SaaS. However, there is a difference between client and customer, so we will go over the main difference between Client vs Customer and why it is important. 

After you are done reading this article, you may want to shift your business strategy slightly to account for the difference in the SaaS world between clients and customers. Here are the sub-topics we will be delving into today:

  • What is a Customer? 
  • SaaS business and Customers
  • What is a Client?
  • Why Client vs Customer Is Important?
  • Key Differences: Client and Customer

When you are all set with this article, you can surely open your company up to receiving more revenue while reducing customer churn. Let’s get right into it and look at the difference between client vs customer. 

What is a Customer? 

First and foremost, you should understand that if you have a SaaS business, the people who buy a subscription to your product are customers. This goes for every tier you offer, even Enterprise. 

A customer will choose the kind of service they want to pay for it right away. They want an immediate exchange of value for their money. All SaaS clients are customers, but not all SaaS customers are clients. Here’s what we mean. 

Customers pay money for precisely the SaaS product they need, to immediately gain value from it. They may get what they were looking for and leave after a trial period or one billing cycle. Sometimes, customers’ needs were short-lived and so they will no longer find any advantage to using your product. 

SaaS business and Customers

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SaaS businesses have customers. These are people who decide on which one of your services and subscription levels they want, based on what they need, how much they are willing to pay, and what value they will receive.

There are no complicated agreements or contracts, and all services are generally standardized. The only difference lies in the subscription level chosen. Everyone who pays for a particular subscription level to your product receives the same service, functions, and features. There is no customizable toolset design for every individual customer. 

You always want to frame everything you do in terms of having customers. This is why you focus on customer success, customer service, and customer support. You ultimately want to satisfy the needs of your customers. This will require you to keep track of various metrics and indicators, to ensure you minimize customer churn and maximize customer retention. 

Just because those who buy your product are considered customers doesn’t mean they cannot receive personalized service in some way. For example, you can provide them onboarding assistance, as well as helpful customer support.

This personal touch blurs the line between customer and client. However, as long as they are purchasing a subscription you are offering to everything that is the same for everyone, you have customers. 

What is a Client?

A client will be a more loyal customer. Where a customer essentially paid you once and never returned, a client will maintain an ongoing relationship with you and your product. A client becomes a relationship. 

This is not to say that customers don’t feel like they have any sort of relationship with a SaaS product or company. However, it will be short-lived, if anything. 

A client will invest in your product for the long-term. They want to develop a personalized and professional relationship with it and your company, to provide them with long-term value. A customer may stick around for a month, but a client can stay with you for years. 

Going deeper, a client is someone who does not focus on the immediate exchange of money for services. They are more interested in the big picture and how your product can help them continuously achieve success for the foreseeable future.

With money left in the background, the relationship feels more like a partnership, which can increase the satisfaction and dedication of both the client and your business. 

Why Client vs Customer Is Important?

client vs customer
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When you have a SaaS business, the client vs customer difference is key to your business strategy. Clients will pay for your product for a much longer time. These relationships will usually require more time and attention, which means more resources dedicated to customer success

Clients will be your most loyal customers, so it makes sense that you should strive for maximum customer retention of your clients. Customer retention usually costs five times less than customer acquisition, which emphasizes just how important it is to provide high personalization and quality service and support to your clients. 

You may even decide you provide more tailored support to your clients. This is especially true when they purchase a subscription to your Enterprise package, which will be the top-of-the-line package you offer to people.

While still being a software subscription gets a host on the cloud, your clients will receive more attention and dedication to their needs, for them to achieve the greatest success possible. 

Key Differences: Customer vs Client

  • Definition: Simply put, a client is the one who wants professional support/service from the company. Whereas, a customer refers to a person who purchases products or services from the company.
  • Relationship: As and when the customer does a single-time purchase, there binds no formal relationship or agreement with the seller. However, clients are the ones who delve in a longer relationship which may or may not end after the first purchase.
  • Time length: Generally, customers do not trust on bigger time-framed goals. Instead, they just target to grab one-time sales. To much contrary, companies that have clients always have to put their best feet forward and see the time frame too, or else the clients might churn away.

Wrapping Up 

The client vs customer enigma is hopefully clearing up for you now. At the end of the day, as long as you are providing software as a service where you use the multi-tiered subscription model, you have customers.

When you have dedicated customers, who stay with you for years and purchase the top tier of your offerings, usually called the Enterprise level, your customers will be more like clients. You can offer them their own customer success manager, to ensure you can keep your most loyal customers retained for as long as possible. 

When considering the client vs customer difference, you can now have a clearer business strategy, focusing your efforts on keeping your highest value customers for longer. This can help you achieve greater customer success and increase your revenues. 

You may also like:

User Retention and Client Retention Are Key SaaS Success Metrics – What are some of the metrics used for client retention? Read on.

The #1 client onboarding checklist – Get insights into the dos and don’ts of a client onboarding list.

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