Clients vs customers: Doubts regarding clients and customers have long existed in the business world.
Whether a business caters to clients or customers depends on their products or services. In some cases, a company can serve both clients and customers.
If a business has a subscription-based service model, it can help customers who just want a packaged service. On the other hand, a client-based business will have more professional services and lots of personalization options.
In this article, we have explored the difference between both clients and customers.
Clients’ vs Customers: Definitions
Clients are the people who purchase from a business to fulfill their needs or get help to solve a specific personal or business problem. For this type of purchase, a business and a client must come under some binding terms or a legal contract. It’s a lengthy process to acquire, onboard, and serve a client for a business.
On the other hand, customers pay for the services and goods provided by a company. Such purchases don’t require building any formal business relationship. In addition, customers can end their engagement once they have purchased from the business. So, the business-to-customer relationship here isn’t long-lasting.
Clients’ vs Customers: The Difference Between Client & Customers
Businesses serving customers and clients differ as per various parameters. Of course, the goal is to generate revenue. However, the way it’s done differs for both types of businesses. Here are some of the differences between how both client and customer-related businesses operate and differ from each other.
Level of Personalisation
The level of personalization available for both clients and customers is different. When a business serves clients, they have services tailored to the unique needs of the clients. Each of the clients they serve can be fundamentally (if not by a large margin) different from the previous one.
A good example would be an IT firm offering a wide range of IT services that may tailor service packaging for their client’s needs. They can personalize backup and disaster recovery services along with cloud services. For other clients, they can personalize their package network security and IT consulting.
But, for customers, the level of personalization is limited. Customers usually purchase whatever’s readymade and fulfill their needs as a standard solution.
Level of Exclusivity
Thinking about Clients vs customers? Here’s another key difference that makes both seem a lot different from each other. Clients taking services from a provider usually stick to the provider and enjoy more exclusivity.
For example, someone might stick to one private bank for investment and banking needs. But, when purchasing a product for their daily requirements, customers would always have other brands to patronize. They’ll be more open to different options.
Expectations of Service Support
The level of expectation for service support is also different for both clients and customers. The level of service support provided by businesses handling clients is higher. On the contrary, the level of customer service support for customers is limited to the purchase. The level of engagement is also short and ends as soon as a query is resolved.
However, client servicing work involves a client working with the service provider for a long time. A good example would be a manufacturing company getting help from a legal service provider.
The company might have to reach out to the service provider even resolving their issue. For clients and servicing companies, the extent of service support can extend for a longer period.
Marketing & Sales
Another point where the client vs. customer debate grows stronger is the marketing and sales part. Companies that serve clients may have a different marketing or sales approach compared to companies that sell products to customers.
For companies that provide services, marketing typically involves targeting a small market where they work to retain their clients. With a small base of customers, they focus on providing a higher level of services and retaining their clients in the long term. Their tactics to attract newer clients are through taking testimonials from their existing clients and showcasing their services’ level.
On the other hand, customer-based businesses typically appeal to a wider base of audiences. They aim to encourage customers to buy and spend more on their products. For such businesses, the audience base is typically a transactional one. The sales tactics aim to help them achieve higher revenue targets.
The Difference in Sales Cycle
The sales cycle differs in both customer-based and client-based businesses. Businesses that serve a client may take longer to acquire a client. Some underlying reasons delay client acquisition.
- Client-based businesses involve a more significant financial commitment from the clients.
- Clients go through rigorous research before settling on a service provider.
- The clients are looking for more personalized solutions, so they need time to think through their decisions.
But that’s not the case with businesses servicing customers. This is where the difference between the clients and customers becomes clearer. Businesses serving customers have a transactional relationship with the customers, and the sales cycle is shorter.
Contractual Obligations
The business relationship tends to be longer for businesses serving clients. So, it’s typical for the client and the service provider to come under some form of legal binding. For example, if a company is taking accounting services from an accounting firm, both parties come to a legal agreement.
In this case, the agreement includes the terms of services, conditions under which the business relationship becomes null and void, fees, and more. Henceforth, one cannot say the same for businesses serving customers and selling products for regular consumption.
Depth of a Relationship
Since inclusivity is higher in client-servicing businesses, business and client relationships tend to be more profound. Service providers tend to pay strong attention to the client’s needs and requirements. They spend ample resources and time to help their clients with their pain points.
However, customers of a business, on the other hand, make their purchasing decisions based on the convenience of a product. There are other factors like the location, price, etc. But such purchases don’t necessarily require a strong and consistent effort from the business. Any connection or relations with business staff isn’t important in this case.
Clients vs Customers: Who’s More Important?
Clients can be active advocates of your business. Building a long-term strong relationship with your clients gives your business a lifeboat and helps it expand. The testimonials of your clients help you attract more clients and customers (if you have services tailored for customers as well).
If your business operates in a landscape where you cater more to clients, you must focus on doubling your customer services. It’ll help to add more customer service representatives to your team. On the other hand, if you have a strong branding strategy for a product-based business, you can make your customers act like your brand advocates. They will help you spread the word about your business through word-of-mouth marketing.
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