Do You Have Customers or Clients?

Most business owners and company executives use the terms "customers" and "clients" interchangeably without fully realizing that there is a meaningful difference between the two. Understanding the distinction and setting your plans accordingly can help you build and grow a more profitable business.

Let's start with the definition of each term according to the dictionary.

Customer: "a person who purchases goods or services"

Client: "a person or group that uses professional advice or services"

Examples of companies with business-to-customer relationships include Wal-Mart, Apple, and your local grocery store.

Examples of companies with business-to-client relationships include service-oriented professionals such as accountants, attorneys, advertising agencies, architects, and the like.

There are pros and cons to catering to each type.

Customers will typically do business with you based on convenience, value, and price. They're loyal as long as you meet those parameters, and they don't require as much personal interaction as clients do.

Clients, on the other hand, are looking for more. Clients are seeking professional advice on how to get something accomplished in the best way possible. They're willing to pay more for that type of expertise than a customer would, but in return for that premium, they require more attention and hand-holding. A business-to-client engagement is typically a longer-term relationship than a business-to-customer scenario.

Every business has customers. Fewer have clients.

So, is your business built around customers or clients?

There is no right or wrong answer. It matters only that you know the difference and set up your business to serve whichever type you are seeking.

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