What Is an Internal Customer?

Malcolm Tatum

An internal customer is a client who purchases products that are manufactured by the employer. The term can be applied in a number of situations, including company structures in which one department effectively purchases products from another as part of the manufacturing chain. At other times, an internal customer is simply an employee who purchased a finished good or service directly from the employer, sometimes at a price that is discounted from the pricing that is charged to other types of consumers.

An internal customer purchases products made by the employer.
An internal customer purchases products made by the employer.

The concept of an internal customer is somewhat different from that of an external customer. External customers are buyers who are not part of the company organization. For instance, if ABC company chooses to buy widgets from XYZ company, and the two companies are not subsidiaries of a larger business operation, the purchase is said to be external. Should ABC and XYZ actually be owned by JKL company and operate as subsidiaries to that parent organization, then the purchase would be considered internal.

Many different types of companies enjoy a flow of business volume from internal customers. Retail organizations often provide employees with opportunities to purchase goods at discounted prices, a move that prompts those employees to meet their needs by making purchases with the employer rather than buying from a competitor. In like manner, agents and administrative staff who work with insurance agencies may choose to take out policies with their employer rather than other agencies. Even with individuals who work with communication companies may be offered services such as DSL or audio conference services at a discount not readily available through other vendors.

One of the challenges for any business is to find ways to include internal customer care in the overall client strategy. Since the focus of many customer service and support operations is directed outward, the needs and concerns of a customer who is part of the organization can be overlooked. This can be counter-productive on a number of levels, sometimes to the point of losing business and having an adverse effect on how the employee perceives his or her contribution to the success of the company. Choosing to include components that provide incentives to each internal customer as well as afford them the opportunity to receive assistance when and as needed will often not only increase the desire to buy from within, but will also have the benefit of motivating those employees to be as productive on the job as possible.

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