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Consumer vs Customer: What is the Exact Difference? Why is it Important?

Consumer vs Customer
Source: Pexels

Often the two terms, consumer vs customer are interchangeably used in the common context. In simple vocabulary, a consumer is someone who consumes a product. Similarly, a customer is the one who buys or purchases a product. Despite the exact definitions, both the terms are deemed essential in the economic ideology of consumerism.

So, what is the difference between a consumer and a customer? Nevertheless, it is true that a customer is a prime target in the world of business. But, it is finally a consumer who consumes or uses the product. He is the one who has the power to unearth the verdict. A consumer decides whether the quality of the product or service has passed the test or not. Here is a glimpse to some of the topics we shall be highlighting on:

Who is a consumer?
Who is a customer?
Key Differences: Consumer vs Customer
Why is it so important?

Before proceeding, know that the consumer and the customer may or may not be the same person. Also, the consumer has the leverage to influence the buying decisions of the customer. So what are the exact difference and why is it so important? Let’s dig in to explore.

Who is a Consumer?

The definition of a consumer could get subjective as well as tricky sometimes. In any given business, the one who consumes the service or uses the goods is said to be a consumer. Note that a customer could be a consumer at certain times, but not always.

Simply put, any entity who does not have the choice to resell the product or service and use that for his purpose is a consumer. Or in even simpler terms, every end-user in the chain of buying or using services of products is a consumer.

Let’s take an example here. Say, you are the head of the family and you purchase some milk packets from the retailer. Till the time you buy those packets, you are a customer. But when that is consumed by you and your family that is where they are the consumers.

This is when you are entitled to discern the genuine nature and quality of the product. Hence, surveys and consumer reports have a huge demand for businesses. To truly sustain in the business world, the quality of your services and the impact it leaves on the consumers makes or breaks the deal.

Who is a Customer?

Again, the definition of a customer is similar to that of a consumer, but not in entirety. He is the one who purchases a product or service followed by a monetary transaction. Note that a customer is not exactly a consumer at all times.

This can be better elaborated with this example. Say, a mother bought some candies for her kids. In this case, the mother is the customer, while her kids are the consumers. 

The common thread that unites every business is wooing the customer.

Once a customer is enticed enough and lured to buy a product, then only it can move next to the consumer in the chain. Over and above, a good marketer always tries to influence the customers first. This induces them to purchase and revert for some more. As they know that once they motivate the customers to frequent and purchase, thereby triggering sales and revenue.

Key Differences: Consumer vs Customer

Key Differences: Consumer vs Customer
Source: Pexels
  • Meaning: While a consumer is the one who consumes goods or services and is the end-user, a customer is the one who actually buys it. A consumer can be a customer but the reverse is not true.
  • Target Audience: A consumer could be anybody. Be it an individual, or a company, maybe a family or a mass. But a customer is more like a single entity or a company as a whole.
  • Selling Purposes: While a consumer does not hold the right to sell the product he got to someone else. However, a customer is eligible to do so.
  • Reason: While the reason behind a consumer purchase is consumption, exclusively, on the other hand, the reason behind a customer purchasing it could either be consumption or to sell it again to someone else.
  • Transaction: A consumer might or might not have to hold a monetary transaction for the purpose of getting the goods. Nonetheless, a consumer must undergo a transaction if he wishes to take the product or service.

Why is it so Important?

In various walks of life, there is umpteen importance of both these terms. The absence of consumers or customers in the economy chain or the country can get very difficult to monitor. Here are a few points that get us to thinking:

  1. Develops service divergenceConsumerism is a vast concept in itself. It just does not restrain itself to the food and beverage industry. Most of the tertiary services we use, be it the grooming industry, pharmacy, transport, communication, and/or educational systems are deeply wired to the development of the economy. Somewhere or the other, all of these are linked in a vicious circle.
  2. Balances the Demand-Supply graph: Economics states that the supply is directly proportional to the demand. It is essential to maintain a balance between both. Else, a dearth in any of the above will lead to enormous unemployment, recession and many such inadvertent issues can pile up.
  3. Augments Demands: All of the goods, services, or products around us are the final result of demand. Demand is the main root behind the emergence of any service or product. Different consumers have different interests in various segments of products. It is the demand that encourages the manufacturers to bring it to the market.

That’s a Wrap

It’s a given that any business XYZ, runs on the demands of a user. The stiff selection between a consumer vs customer is finally led to the type of service or product to choose upon. They are the real drivers behind the system. Or in even simple words, they are the real CEO of your company and decide what kind of profit or loss you make.

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