What Is a Customer?

[article]
Summary:

When we communicate, the words sound familiar so we think we understand each other. But understanding fizzles when we attribute different meanings to the words we use. In this column, Naomi Karten illustrates how differences in the way departments and companies define their terms can cause confusion, flawed conclusions, and faulty decisions. Naomi asks us to question the meanings of terms before starting a project to ensure that we understand what's called for.

A traditional definition of a customer is someone who purchases products or services from another. Simple enough. But when you're responsible for systems that analyze and report customer data, this definition falls short. And it is not an adequate definition when you're the end-user making business decisions based on reports generated by those systems.

I was reminded of these facts by a Wall Street Journal article that began, "The Securities and Exchange Commission's probe into how telecommunications and cable companies count their customers highlights the varying and sometimes inconsistent standards companies use to keep track of that most fundamental asset."

For example, at one time cable companies differed as to whether a household with both analog and digital cable services counted as one customer or two. Companies in the wireless sector may differ as to how long prepaid customers are counted as customers if they haven't made a call in a long time or they've run out of minutes. According to the article, one familiar online service once counted thousands of people as subscribers who didn't even know they had accounts. It appears these accounts were part of a bulk subscription program given to employers, some who never actually offered the accounts to their employees.

Count on It!
Such differences in counting methods may matter most to those who investigate evidence of abuse. But this multiplicity of criteria for what constitutes a customer raises the question, "Do you know how many customers the company you work for has?"

More often than not, the correct answer is another question: "What do you mean by customers?" That's because the definition of a customer is likely to vary not only from one company to another, but also from one department to another within a given company. For example, the definition may (or may not) include lapsed customers, customers in default of payment, customers who returned the goods, and customers whose last purchase was more than three years ago. Therefore, in preparing specs that concern "customers," you'd certainly want to ask some questions, such as, "According to whom?"

According to Whom?
Of course, it's not just software professionals who need to be aware of multiple definitions, but also the users of the resulting analyses and reports. Back when I was an IT manager, the company classified its customers into three main categories. Two of the categories were distinct from each other. Customers in the third category had attributes in common with the other two.

Predictably, certain business departments treated this third category of customers as part of the first category and others treated it as part of the second. Meetings involving representatives from these different departments often turned into shoot-'em-outs over which department's customer reports had the correct information. On numerous occasions, my department was summarily accused of having created faulty reporting systems.

The truth, as we repeatedly had to remind them, was that both sets of reports were correct. The "discrepancies" merely reflected differences in the way these departments classified the third category of customers. And the way each department classified its customer data was appropriate to its specific function.

As a result, we had to make sure we accurately understood the needs and expectations of both the requester and the ultimate users of the system when defining requirements. And whenever someone asked for a report of some subset of customers, we began by asking, "What do you mean by customer?"

About the author

Naomi Karten's picture Naomi Karten

Naomi Karten is a highly experienced speaker and seminar leader who draws from her psychology and IT backgrounds to help organizations improve customer satisfaction, manage change, and strengthen teamwork. She has delivered seminars and keynotes to more than 100,000 people internationally. Naomi's newest books are Presentation Skills for Technical Professionals and Changing How You Manage and Communicate Change. Her other books and ebooks include Managing Expectations, Communication Gaps and How to Close Them, and How to Survive, Excel and Advance as an Introvert. Readers have described her newsletter, Perceptions & Realities, as lively, informative, and a breath of fresh air. She is a regular columnist for StickyMinds.com. When not working, Naomi's passion is skiing deep powder. Contact her at naomi@nkarten.com or via her Web site, www.nkarten.com.

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