Yes, a customer is also a stakeholder because a customer has a stake or vested interest in the outcome of your company.
Your customer is acquiring a product or service from you and so they are counting on you to deliver as promised. So to that extent, your success is their success.
While all customers are stakeholders, not all stakeholders are customers.
Keep reading to discover the overlaps and distinctions between customers and stakeholders and examples of each.
What is a Customer?
A Customer is an individual or an entity that acquires your product or service with the intention of using it or having it be used for some purpose.
Customers may or may not pay for the product. And they may or may not be direct users of the product. But they can still be customers.
Additionally, customers can be internal to your company or they can be external.
In short, customers can be classified along different axes:
- Paying Customers Vs Non-paying Customers
- Customers as Users Vs Customers as Non-Users
- Internal Customers Vs External Customers
We’ll look at these three classifications shortly. But first, let’s define a stakeholder.
What is a Stakeholder?
A Stakeholder is any individual or entity that has a stake in the functioning of your business.
Customers clearly have a stake in your business because they are relying on you to deliver them a product or a service. And so Customers are Stakeholders!
But there are other types of Stakeholders too. We will cover these later in the article.
Different Types of Customers
Paying Vs Non-Paying Customers
A Paying Customer will have purchased your product either directly from you or from a reseller. Regardless of how they purchased your product, it is your product that they have purchased and that makes them your customer.
Non-Paying Customers are those who have acquired your product for free. So a customer who has downloaded a free version of a software is a non-paying customer. A customer who has acquired a product through a product giveaway is a non-paying customer.
Businesses often start by acquiring non-paying customers with the intention of converting them into paying customers down the road.
Users Vs Non-Users
If a customer, paying or non-paying, uses the product they have acquired from you, then they are a customer and a user.
But if the customer has acquired the product for someone else, then the customer is a non-user but still a customer because they acquired the product from you. The person they give the product to use becomes the user but this user is not a customer because they are not the ones who acquired the product from you.
An example: A father buys a model plane for his son. The father is the customer. He will be interested in knowing whether the plane is good value for money and if his son will be happy with it. The son is the user and all he cares about is whether the plane works. So customers and users can be different people with different motivations.
External Vs Internal Customers
Businesses often have both Internal Customers and External Customers.
External Customers are the most obvious ones. These are the customers who purchase your product or service and keep your business afloat.
Internal customers are those who are in the same organization but who use an internal product or service.
For example, a company might have a training department that develops and delivers training to employees. A Business Unit in that company, which would like its employees trained, will be an Internal Customer of the training department.
Similarly, an employee might have a problem with their computer. They call the IT Department for help. Now the employee is an Internal Customer of the IT Department.
Different Types of Stakeholders
A Stakeholder is a much broader term than a Customer and so virtually anyone who has an interest in the success of a company can be seen as a Stakeholder in that company.
Here are some examples of Business Stakeholders:
- Users (of your product or service)
- Employees (and their families)
- Local Community
- ‘Customer’ and ‘Stakeholder’ are distinct terms.
- A Customer acquires a product or service from a business with the intention of using it directly or indirectly.
- A Stakeholder is any individual or entity that has a vested interest in a company.
- A Customer is a Stakeholder but not all Stakeholders are Customers.
- ‘Stakeholder’ is a broad term and includes others in a company’s environment like suppliers, distributors, employees and investors.