Difference Between Internal Customers and External Customers

The main difference between Internal Clients and External Clients is that the Internal Clients are the clients that belong to the company or a part of a company, while the External Clients have no relationship with the company.

Internal customers vs. external customers

A customer is a person who receives goods, products, services or ideas, etc. from a vendor, vendor, or seller through an exchange of money or other valuable items. A customer can be of two types i.e. internal customer or external customer. An internal customer is a customer who has a direct relationship or contact with the company or organization, while an external customer is a customer who does not have any direct contact with the company.

Before the introduction of the term internal customers, external customers were simply customers. Later in 1988, Joseph M. Juran, who was a quality management writer, introduced this concept in the fourth edition of his Quality Control Manual.

Internal customers have more information about the product due to their direct contact with the company compared to the external customer. Internal customers get the product cheaply from the company. On the other hand, external customers get these products at high prices. So, internal customers make a profit from the sale of any organization’s products, while external customers make no profit.

Internal customers can act as intermediaries between the company and the consumer while; the external customer may itself be the consumer or the end user. Therefore, it means that an internal customer does not purchase the product for their own use; an outside consumer buys the items for his own use.

An increase in the number of internal customers does not have a significant effect on the profit of the company. On the other hand, an increase in the number of external customers increases the profit of the company or organization.

Internal customers negotiate with the company to obtain the items or services at a reasonable price because they know very well the true cost of manufacturing. So, they negotiate with the company to obtain the product at a reasonable price, while an external customer is not in contact with the company, so they cannot negotiate.

Comparison chart

What are internal customers ?

An internal customer is a person who is part of the company or has direct contact with the company and buys products from it. They can be employees of the company, such as managers, etc. They may not be directly involved with the company, but have a link with it and many other organizations to sell the company’s products.

These internal customers play an important role in delivering products to end users. Most of the stakeholders, shareholders and employees, etc., act as internal customers, but they can also be external regulators.

Also, an internal customer has complete details about the product due to their direct relationship with the company. They negotiate with the company to obtain the items or services at a reasonable price because they know very well the real cost of manufacturing the product. So, they negotiate with the company to get the product at a reasonable price. The company provides them with products and services, etc. at affordable prices.

Internal customers act as intermediaries between the company and the product. They get the company’s products at a low price and provide them to the end user or external consumers at a higher price than the company’s and make a profit.

examples

• Waiters and culinary staff in a restaurant.
• The shift crew, their managers, and other shift supervisors are considered internal customers by retail shift supervisors.

What are external customers ?

An external customer is a type of customer who uses and pays for items, products or services offered by a company or organization. You have no contact with the company or organization and act as an end user or consumer of a product.

In reality, an external customer is the main objective of a company or organization. A company or organization produces products or services in order to satisfy the demands of the external customer according to their needs. They buy products in exchange for money or other valuable items and provide benefits to the company. The profit of the company increases with the increase in the number of external customers.

The external customer does not know the pros and cons of the product because he is not connected with the company. They don’t even know the manufacturing cost of the product, so they can’t bargain and get the products at high rates. They pay the maximum price for the product and do not know the benefit that the company obtains. They are the end users of the product and do not make any profit from its sales.

examples

• dinner in a restaurant
• guests in a hotel
• Travelers purchasing tickets from any airline
• Buying groceries in a supermarket
• People shopping for clothes in a boutique.

Key differences

1. A person who is part of the company or has a direct contact with the company and buys products from it is known as an internal customer, while a customer who uses and pays for the items, products or services offered by a company or organization. is known as an external customer.
2. An internal customer has a relationship or direct contact with the company or organization, while an external customer is a customer who does not have any direct contact with the organization.
3. Internal customers have more information about the product due to their direct contact with the company, while an external customer has less details about the product due to the lack of relationship with the company.
4. Internal customers get the product cheaply from the company. On the contrary, an external customer obtains the products at high prices.
5. Internal customers can profit from the sale of any organization’s products on the other side; external customers have no benefit.
6. An internal customer does not purchase the product for their own use. On the other hand, an external consumer buys the items for his own use.
7. Internal customers can act as intermediaries between the company and the consumer of the products. On the other hand, an external customer may itself be the consumer or end user.
8. Internal customers negotiate with the company to obtain the items or services at a reasonable price because they know very well the true cost of manufacturing. So, they negotiate with the company to obtain the product at a reasonable price, while an external customer is not in direct contact with the company, so they cannot negotiate.
9. An increase in the number of internal customers does not have a significant effect on the profit of the company. On the other hand, an increase in the number of external customers increases the profit of the company or organization.
10. Waitstaff and culinary staff in a restaurant are an example of an internal customer. On the other hand, a dinner at a restaurant or guests at a hotel, etc., are examples of the external customer.

Final Thought

The above discussion summarizes that an internal customer is part of or has a connection to a company or organization. He acts as an intermediary between the company and the consumer and makes a profit. On the other hand, there is no direct link between the company and the external consumer, and he buys products for his personal use.