Consumer vs Customer: What’s The Difference

If you’re a business owner, making a distinction between customers and consumers is a must. 

These two groups of individuals relate and engage with your business in completely different ways. Acknowledging these differences and having a better understanding about what each group represents can help you craft better marketing messages, improve your sales, and overall – make smart choices.

In the following sections, we dive deep into a topic that many businesses underestimate – consumer vs. customer.

Defining a Consumer

Before we dive into the key differences that define customers and consumers, let’s take a moment to cover the basics.

In essence, a consumer is the end user of a product or service. Although they may not always be responsible for purchases and spending money with your company, they’re the ones who ultimately use what you have to offer. 

Consumers can utilise your products or services for personal use or business use. They also often use goods that are provided to them by others. A great example of this is when a parent purchases a product for a child. In this case, the child is the consumer.

Naturally, a brand’s consumer base is frequently much larger than its customer base. This is due to the fact that a product or service purchased by one customer can be used by multiple consumers.

Types of Consumers 

When talking about consumers, there are several different categories that it’s important to understand.

Let’s see them below:

• Extrovert consumers: Extrovert consumers are your brand advocates, the ones that have favourite companies that they publicly share information and feedback on. They are strongly attracted to the brands they use and oftentimes identify with them.
• Inferior goods consumers: These consumers are extremely price-sensitive and use only those products that are of essential necessity. They are usually consumers with low purchasing power.
• Commercial consumers: Commercial consumers are typically other businesses or groups that consume goods in large quantities. They usually associate special needs with their purchase orders.
• Discrete consumers: Discrete or discretionary spending consumers prefer to keep their buying habits personal and incognito. In most cases, they will spend on specific products, like jewellery, electronic gadgets, or beauty.

Each one of these consumer groups acts differently on the market and has a unique way of engaging with a business. Being aware of these points of differentiation will enable you to target these consumers adequately and achieve maximum results. 

Defining a Customer

On the other hand, a customer is defined as someone who spends money for a product or service but doesn’t necessarily have to be the end consumer. 

You customers are ultimately the individuals who provide revenue for your company, playing a vital role in your business’s performance. 

Just like with consumers, there are multiple customer groups that are important to address, so you need to get to know your customers if you want to have a successful business.

The Different Types of Customers 

Not all customers are the same. 

Here are the main categories that you need to know about and their characteristics:

• Wandering customers: Customers who shop in brick-and-mortar stores but don’t have a specific target in mind. As the name suggests, they “wander” in the hopes of discovering an interesting product that they might want to spend on.
• Discount customers: Customers who purchase from retailers who specifically sell goods under the market rate. These are the customers who are always on the lookout for a good deal
• Loyal customers: For any business, the loyal customer is the most important one as they keep coming back for more, providing recurring revenue for the company. These are the completely satisfied customers that adore your products or services.
• Trade customers: A trade customer, also known as a wholesale customer, invests in products with the intention of reselling them to other businesses. The ultimate goal of trade customers is to make a profit from selling products at higher rates than the ones they purchased them for.
• Final customers: The final customer is the end customer of the purchased goods. Instead of reselling the goods, they shop for personal use.
• Need-based customers: Customers that shop based on need rather than interest. Some of the best examples of products that need-based customers shop for include food and other essentials.

Regardless of the type of customer, it’s important to note that all of these groups are the ones spending money on your brand. As such, a lot of businesses prioritise targeting customers rather than consumers.

Key Differences Between Consumers and Customers

To fully understand the customers vs consumers comparison, it’s key to point out some of the most stand apart differences between these two categories. 

So far, we noted that customers are the ones who purchase products and sometimes use them, while consumers are the end users of goods. 

However, there’s more to this differentiation. In the next sections, we explore how these groups differ in terms of buying behaviour, needs and preferences, marketing strategies, and more. 

Buying Behaviour: Consumer vs. Customer

When discussing the customer vs consumer topic, it’s fundamental to accent how these two groups of people make buying decisions.

The main difference in buying behaviour is that while customers often shop with the end goal of reselling, consumers always spend money with the intention of using the product or service. In a lot of cases, customers are the ones engaging in financial transactions with a company but won’t be the ones to take advantage of the product. 

Consumer Needs and Preferences

When it comes to consumer needs and preferences, it’s key to acknowledge that it’s always about the end user and what they value most. 

Depending on the type of product or service that you offer, these values can be related to emotions, features and functions, psychological traits, and influence. 

For example, the need for a product in the consumer’s mind, in most cases, derives from a problem that needs a solution. An example is when a consumer purchases a smartphone device to exploit functionalities like calling, texting, using advanced camera features, connectivity, and more. 

In regards to consumer preferences, it’s crucial to consider the personal choices that are driven by much more than needs. These are related to tastes and desires. Using the example from above, a consumer may choose to invest in a smartphone because of its sleek design, brand, or other factors. 

Customer Loyalty and Retention

In order to ensure that revenue targets are met, companies must ensure that customers continue purchasing over and over again. 

This is where customer loyalty and retention come in.

One of the most important tasks of brands is to create customer loyalty program by establishing an emotional connection with the individual. Some of the driving factors behind customer loyalty are trust, brand recognition and satisfaction, quality service, and others. 

Marketing Strategies for Consumers

Needless to say, to attract both consumers and customers, brands need to implement a strategic marketing strategy and make consistent marketing efforts. 

The tricky part is that companies may not always be aware of who their consumers are. Remember, these individuals won’t always be the ones engaging in transactions with your brand. 

Having this in mind, marketing strategies for consumers usually concentrate on brand awareness campaigns that promote the experience, satisfaction, and effectiveness of a product. A great example is when toy companies run TV ads in the middle of children’s shows. 

Marketing Strategies for Customers

On the other hand, how you market your products to your customers will directly impact sales.

As such, it’s crucial that you target the right audience. 

The most popular marketing strategies for customers include advertising on social media channels, email, blog articles, and more. Overall, creating good content is at the core of targeting your ideal customers, educating them on the benefits of your products, and encouraging them to buy. 

Note that when marketing to customers, it’s essential to appeal to emphasise pricing. 

Examples from Different Industries

Let’s look at a few real-life examples of how consumers and customers act differently in specific industries. 

For example, when it comes to grocery shopping, the consumer may be an elderly parent who eats the food, while the customer is the one who buys the groceries at the store. 

Meanwhile, in the food and beverage industry, a customer might be a restaurant or supermarket that buys goods in wholesale quantities from a supplier and then resells them to consumers. 

In the technology industry, a customer can be a retail electronics store investing in laptops from a wholesaler with the aim of reselling them from their personal store. On the other hand, the consumer would be the individual who buys a laptop from the electronics store. 

In the automobile space, a customer could be a car dealership, while a consumer would be the person buying a car for personal use. 

Tips for Engaging Both Consumers and Customers

Being able to engage both consumers and customers as a business is vitally important for your performance. 

To achieve this, we offer a set of proven tips to implement:

• Be aware of each group’s needs: When attracting consumers, make sure that you concentrate on what matters most to the end user. This includes convenience, features, quality, and emotional connection. On the other hand, when targeting customers, focus on things like pricing, logistics, and stock maintenance.
• Provide payment flexibility and convenience: No matter whether you’re dealing with consumers or customers, make sure that you can accept payments in the most secure, convenient, and reliable way. This includes setting up payment solutions that support credit card payments, mobile wallets, tap-to-pay, and more. For B2B buyers, you may want to also think about invoicing, instalment plans, bulk discounts, and other perks.
• Use personalisation whenever possible: Don’t underestimate the power of personalisation. When dealing with consumers and customers, analyse their purchasing history, shopping preferences, and behaviours. This will allow you to engage with them on a more personal level, forming lasting relationships.
• Make the purchase experience as seamless as possible: For consumers, make sure their experience with your brand is smooth and intuitive. For customers, rely on automated systems and tools for procurement, payments, online ordering, and more.

These tips can undoubtedly help businesses connect with both consumers and customers on a deeper level, guaranteeing recurring sales and repeat business.

Conclusion

Although the terms “customer” and “consumer” are often used interchangeably, they ultimately represent two entirely different groups of people.

Understanding these foundational differences between the two can help you make better-informed decisions and win long-term business for your company.

Frequently Asked Questions

Can someone be a customer and consumer at the same time?

Yes, you can come across individuals who are both a customer and a consumer. This happens if the person buying the product is also the same person consuming it.

Are clients the same as customers?

No, clients and customers represent different things. Customers usually shop for standard products or services, like clothing and restaurant meals. On the other hand, clients often need personalised, professional services like legal advice, consulting, and marketing.

Why is it important for businesses to differentiate between customers and consumers?

Understanding the difference helps businesses tailor their strategies. For example, a company selling baby products may target marketing efforts toward the parents (customers) while designing the product for the baby (consumer).