Customer: Definition and How to Study Their Behavior for Marketing

Key takeaways
* A customer is an individual or entity that purchases goods or services.
* Understanding customer behavior helps businesses improve products, tailor marketing, and increase retention.
* Exceptional customer service is a major competitive differentiator.

What is a customer?

A customer is any individual or business that buys a company’s goods or services. Customers can be external (end buyers or clients outside the organization) or internal (employees or departments that consume services or outputs within the organization). Customers differ from purchasing agents, who buy on behalf of a business for commercial or industrial use.

Why customers matter

Customers generate revenue and determine a company’s ability to survive and grow. Satisfied customers are more likely to make repeat purchases, leave positive reviews, refer others, and tolerate price or product changes. Because of this, companies invest in understanding customer needs, measuring satisfaction, and improving experiences to earn loyalty.

Studying customers

Businesses study customers to create targeted marketing, optimize inventory, and expand market reach. Common approaches include:

• Segmentation by demographics (age, income, location, gender) and psychographics (values, interests).
• Building customer personas to represent typical buyers and guide product and messaging decisions.
• Tracking behavioral data (purchase history, browsing behavior, churn signals) to personalize offers and predict demand.
• Soliciting feedback through surveys, reviews, and interviews to identify pain points and improvement opportunities.
• Applying insights across the marketing funnel to convert prospects and nurture retention.

Customer service

Customer service focuses on creating positive experiences throughout the buyer journey. Good service drives loyalty, favorable reviews, and referrals; poor service can quickly erode a customer base. Modern customer service includes real-time channels such as live chat, texting, and social media, and is often central to how brands differentiate themselves in crowded markets. Quality improvement methodologies like Six Sigma can help organizations standardize and enhance service delivery.

Customers vs. consumers

The terms are often used interchangeably, but there’s a subtle difference:
* Consumer: someone who uses or consumes a good or service.
* Customer: someone who purchases a good or service. A customer may be a consumer, or may buy on behalf of another user.

Common customer types

Businesses often encounter a variety of customer behaviors. Typical categories include:
* Prospective — potential buyers in early research stages.
* Window shoppers — browsers who may never purchase.
* Determined — focused shoppers who know what they want.
* Promotion-driven — motivated primarily by discounts and deals.
* Churned — former customers who have stopped buying.
* New — first-time purchasers needing onboarding and reassurance.
* Impulse — make spontaneous purchases with little deliberation.
* Angry — dissatisfied customers requiring careful recovery strategies.
* Loyal — repeat customers with high lifetime value.
* Brand advocates — enthusiastic fans who recommend the brand.
* Referred — customers acquired through recommendations or referral programs.
* International — buyers from other countries with different expectations and regulations.

Best type of customer

Loyal customers are typically the most valuable. They buy repeatedly, cost less to serve per purchase, and often refer others. Investing in retention and loyalty programs usually yields higher returns than focusing only on acquisition.

What customers value most

Customers prioritize:
* Product or service quality and reliability.
* Fair pricing and perceived value.
* Responsive, helpful customer service.
* Opportunities to provide feedback and see that it’s acted on.

Bottom line

Customers are a company’s most important asset. Businesses that systematically study customer behavior, deliver excellent service, and respond to feedback are better positioned to win loyalty, increase lifetime value, and sustain growth.