What is a Customer?

A customer is an entity that buys goods or services from third parties. Accumulating a profitable and recurring group of customers is the primary goal of a business, since this group generates revenue for the business.

A company that wants to remain profitable will closely follow the satisfaction levels of its customers and change its practices to match their requirements, so that they are willing to continue placing orders. Otherwise, a company must continually expend funds to locate new customers, which is an expensive proposition.

External Customers vs. Internal Customers

An external customer is an independent third party that purchases goods or services from a seller. Conversely, an internal customer is a person or functional unit within a business that uses its goods or services.