External customers use a company’s products or services but are not part of the company. An external customer is an individual who enters the store and buys merchandise. Internal customers are members of an organization who depend on the assistance of one another to accomplish their job responsibilities. For example, a sales representative requires support from customer representatives to place an order.
A customer is a person or an organization that uses an output from another person or organization. A grocery shopper who is an external customer buys goods from the market. In the supermarket, internal customers include the manager who depends on information from the accountant to make decisions or the stock person who needs to receive materials from the warehouse to put goods on the shelf.
Both external and internal customers are important to the success of a business or organization. Through their purchases, external customers provide the revenue stream that a business needs to survive. Satisfied external customers make repeat purchases and refer the business to other potential customers. On the other hand, customers who suffer as a result of negative experience with a business, such as rude treatment by an employee, can hamper a business by dissuading other people from patronizing it. An internal customer who does not work well with other elements of the company may have difficulty placing orders or obtaining answers to his external customers' questions, leading to poor service.