External and Internal Customer of Insurance - Concept of Insurance, Principles of Insurance, B com | Principles of Insurance PDF Download

What Is an Internal Customer & a External Customer?

Your customers don't only include people who enter your establishment or place orders by telephone or the Internet. Customers also include those who work every day to make your operation a success: your employees. While external and internal customers may fulfill different roles, both are critical to the viability of your business.

Identification

An external customer is someone who uses your company's products or services but is not part of your organization. If you own a retail store, for example, an external customer is an individual who enters your store and buys merchandise. An internal customer is any member of your organization who relies on assistance from another to fulfill her job duties, such as a sales representative who needs assistance from a customer service representative to place an order.

External Customer Significance

External customers are essential to the success of any business, as they provide the revenue stream through their purchases that the enterprise needs to survive. Satisfied external customers often make repeat purchases as well as refer your business to other people they know. A customer who suffers through a negative experience with a business, such as being treated rudely by an employee, can also hinder a business by dissuading others from patronizing it.

Internal Customer Significance

While internal customers may not necessarily purchase the products or services offered by their employer, the internal customer relationship also plays a key role in the business's success. In the sales example, the salesperson who does not work well with customer service may have greater difficulty placing orders or obtaining answers to his external clients' questions, resulting in a poor level of service. Strained internal relationships can also adversely affect company morale.

Considerations

As a business owner, you may have a natural tendency to focus on the relationship with external customers, as they are the ones who purchase your products and services. Still, seeking ways to improve internal customer relations can lead to a healthier work environment. You can take steps to improve internal relations by training employees to think of co-workers in the same manner as external customers and provide the same high level of service. Set an example by showing appreciation for your employees' efforts and encouraging their feedback.