Premium Resources

About Internal Customers

An internal customer is the one who is affected by the product or service as it is being generated. The internal customer is sometimes forgotten in the effort to produce an item or service for the external customer. The immediate goal should be to produce the product or service in a simple and convenient manner for internal consumption. The effort to remember ‘to do’ things in a specific way, to be trained properly, to be given the proper equipment or to be given specific instructions can often be neglected.

Internal customers are often employees of the committee. Kaoru Ishikawa (1985) coined “The next operation as a customer” in order to remove the sectionalism of departments towards each other. The essential idea is to enable employees of all departments to come together to solve problems. Staff members must consider themselves as service providers. Otherwise, the staff members are in constant struggle with the line management and nothing gets done. Within a company, the staff should consider what kind of work they can perform for the line departments.

Research has shown that management practices relate to employee satisfaction, which also impacts customer satisfaction. When employees are satisfied with their treatment, given the right tools to do the job and supported by management; customers are more likely to have higher perceptions of quality and will continue to do business with the company.

Internal employee communications for customer satisfaction can be improved through the following options:

1. Company newsletters: Basic information, corporate news

2. Story Boards: A wallboard display; memos, letters, projects, etc.

3. Team meetings: Share business news or announce new events. Posting customer letters of appreciation or dissatisfaction

4. Staff meetings: Share the information. Display of goals, progress charts, etc. Quality awards from customers. To stay competitive in this environment, a constant schedule of training for the entire workforce is required. Typical employee training must focus on helping them do their job better. 

Identify External Customers

External customers are not part of the organization but are impacted by it.  Generally, external customers play a critical role by providing the major portion of company revenues.

End Users

The category of external customers includes those that purchase a product or service for their own use. In this case, they would be the “end user” of the product. Intermediate customers purchase the product or service and then resell, repackage, modify or assemble the product for sale to an end user. These “channels” can provide volume sales opportunities for a business but will have significantly different requirements than end users.

Examples of intermediate customers in other areas include:

  • Retailers

  • Distributors

  • Manufacturer’s representatives

  • Wholesalers

  • Transport companies

  • Impacted Parties

  • The third external category are those who did not purchase or use the product but are impacted by it

The impacted parties for an educational system might include:

  • Parents

  • Service companies who hire students

  • Communities

  • Vocational schools

  • City governments

  • Colleges and universities

  • Civic groups

  • Service companies who are suppliers

  • Meeting external customers needs can become a complex process

  • External Customer Identification

  • External customers may be sorted in many ways in an attempt to better understand their requirements and identify possible market niches

  • Business customers can include for-profit and not-for-profit enterprises

  • Examples of not-for-profits might include schools, hospitals, public agencies

The various customer groups could also be reviewed for:

  • High-profit margin

  • Competition in market

  • Risk of market

  • Growth in market

The consumer customer market differs from the business market as follows:

  • The consumer market has a large number of customers

  • The majority of consumer purchases are small in actual dollar amounts

  • The transaction is usually a simple purchase

  • Most consumers are not very knowledgeable about the product

  • The supplier does not share proprietary information with the consumer

In contrast, the business customer acts in the following manner:

  • There are a very small number of business customers; maybe only one

  • The amount purchased per transaction is quite large

  • The purchase is handled through specialized personnel

  • The customer may know more about the requirements than the producer

  • The supplier may allow the customer access to all sorts of information

  • It is also important to look at the market for the next two to five years and estimate how it will change and grow

  • This requires a look at all potential customers and their requirements

  • Surveys can establish a communication process serving as a tool for overall improvement

Information should be gathered on improvement efforts and some of the following factors:

  • State of the company:

What is the employee’s perception of the company?

  • State of quality efforts:

Are the quality efforts worthwhile?

  • State of the processes:

Are there improvements?

  • Reaction to policies:

What dumb things have been implemented?

  • Rating of job satisfaction:

Do l like my job, my boss, etc.?

  • Rating of company satisfaction:

Is the company a good place to work?

The voice of the customer is an expression for listening to the external customer. It is necessary to have constant contact with the customer. To some companies, complaints are the only way that they listen to their customers. It has been stated that complaints are gold because complaints let the company know how to improve, and how to beat the competition. Among the ways that a company can listen to the external customer are:

  • Immediate customer surveys

Customer follow-up surveys (6 months, 1 year, 2 years)

  • Community surveys:

A look at what the community is doing

  • Personal customer contact:

CEO spends one day per month with a customer. Customer contact reports are given to the contract employee

  • Focus groups:

1. Small and large groups

2. Customer interviews or councils

3.  Electronic mail

  • Test marketing:

 A small area is tested for use

  • Quality guarantees:

If not satisfied, we will redo the training

  • Inspectors:

Use of mystery shoppers, auditors

  • Ombudsmen:

Advocates for the customer. Use of toll-free phone numbers or suggestion boxes

Instruments to Gather Data

There are instruments or tools available to everyone for the purposes of collecting customer information.

Some of the common instruments are described below:

  • Surveys:

A properly designed questionnaire gathers data using a consistent set of standardized questions. Usually, a sample is selected for use. Interviewers can be used or it can be self-administered.

  • Focus groups:

A small group (3 to 12 typically) of individuals is assembled to explore specific topics and questions. A time period of 1 to 2 hours is normally required.

  • Face to face interviews:

Individual interviews of 30- 60 minutes in length may be used. This can be very time-consuming.

  • Satisfaction/complaint cards:

The return of a card prompts a reaction by the company. These could function as feedback forms.

  • Dissatisfaction sources:

Some methods that voice dissatisfaction include complaints, claims, refunds, recalls, returns, repeat service work, litigation, replacements, downgrades, warranty work, is-shipments, etc.

  • Competitive shopper:

Shoppers evaluate the company and competitors. CEOs may call their own offices to measure the ease of customer access.