Customers vs. Clients

 What is the difference between a “Customer” and a “Client”?  Does your company serve customers, clients, or both? How does your staff define the people you serve? 

Generally, a customer has no formal relationship with a business and the transaction is often a “one-off” transaction completed at the point of sale. A client typically has a longer-term and more formal relationship, often governed by binding terms and conditions or contracts. A client’s product or service may also require multiple steps to complete and is generally more complex than customer transactions. 

You may think you serve clients due to the appearance of an ongoing business relationship or a complex service offering. However, the switching costs for a client to move to your competitor may be so low and so easy that your clients may in fact only be customers. These clients likely have far less allegiance to your firm than you realize. 

To mitigate the risk of losing hard-won clients, companies should actively define the entire client value proposition and keep it front and center across the business.  Regular communication with clients on all aspects of the value proposition will enable your clients to place more value on working with your firm. For example, if you provide a transaction service there are many things to wrap around your core offering to add more value to the client including:

·       Customer service

·       Advanced technology

·       Transaction reporting

·       Market intelligence

·       Competitive pricing

·       24 x 7 accessibility

·       Annual client conference

·       Client user groups

·       Etc.

Beyond the range of "hard" values a service provides it is important to also stress the intangible values like reliability, stress-free, convenience, flexibility, user-friendly etc.