Internal and External Customers

This lesson will consider the internal and external customer, how marketing is used to build and nurture customer relationships, and will begin to build your knowledge on the customer loyalty.

So let’s begin by looking at external customers and internal customers. For the purposes of an introduction to marketing, the more generic terms for the different types and characteristics of people with which an organisation develops relationships would include: customers, users, connected stakeholders, and other stakeholders. We will now look at how we differentiate between the internal and external customer.

Internal Customers

Internal customers are those colleagues and departments within your own organisation. Again in previous lessons we looked at internal functions and how marketing can be used internally for the flow of internal services and communication. Sometimes you are the customer and sometimes you are the service provider. We considered how marketing connected internally with how marketing interacts with research and development, production/operations/logistics, human resources, IT and customer service. There are of course many other internal parts of the business.

External Customers

External customers are more likely to be customers, users, and stakeholders. Customers are those that exchange money for goods and services and consumers are those that actually use the product (and as we said they may or may not be the same person). So a user is the same as a consumer. According to Blythe (2011), stakeholders are people who are impacted by corporate activities. An obvious stakeholder might be a shareholder since they have voting rights at annual general meetings. A less obvious stakeholder would be the person that owns the land next to your factory, or the family that is supported by the father that works in your warehouse. So stakeholders would include ‘publics’ such as shareholders, customers, staff and the local community. A connected stakeholder is one with the direct association with your business, and this would be a supplier or a shareholder. Obviously other stakeholders would not have the same strength of connection, for example in the case of the local community.

Example – Starbucks Coffee

We going to look at Starbucks coffee as an example of a company that has both internal and external customers, and we should be able to apply some of the terminology that we introduced above. The internal customers will be the people that work within the business of Starbucks. The internal customers will be everyone from the Board of Directors of the company, to the supervisors and team members that serve coffee at the customer interface. So information and communication will flow from the board of directors to the people on the ground, and data and feedback from customers can flow from the people in the coffee shops back to the internal customers in the marketing department. External customers and consumers will be the everyday public that come in to the coffee shop and buy coffee for themselves and their friends. Of course the user will be the consumer of the product, whether that is the purchaser or not. The connected stakeholder would be the coffee suppliers from around the world, and the pension schemes that own shares in the business. Other stakeholders will include other businesses which are based around the Starbucks stores, as well as those impacted by the environment around coffee plantations (which is something that Starbucks is very keen to deal with since it has an ethical purchasing policy).