What Are Internal Customers? Their Meaning and Importance

Vũ Khôi

Author at Wotech Electronics Blog

Internal customers are an important customer group for any business. Caring for internal customers helps a business grow and can spread its products to many consumers. However, first we need to understand the concept of internal customers and the importance of this customer group.

The Concepts of Internal and External Customers

What Are Internal Customers?

Internal customers are the individuals, employees, or departments of your business. They can also be people from the companies that distribute and supply your products. In short, you can understand internal customers as the people who interact with and understand your product best.

That is why they are also your most loyal customers. This makes caring for this customer group extremely important.

What Are External Customers?

External customers are individuals who do not belong to the business. They are often called by another name: end-users. Fundamentally, the ultimate goal of any business is the external customer. To put it briefly and simply, you can understand that this customer group:

• Is 100% unconnected to your business

• Knows nothing about the product process or anything related to production

• Knows nothing about the profit the company earns from the product

• Uses the product for themselves

So it can be understood that this customer group is very large — which means the company's profits rise along with the growth of external customers. Every product a business produces must be made as well as possible, because the external customer is the end-user, the one who brings profit to the business.

>>>> See more: What Is Customer Segmentation? What Is It For? How Should You Segment?

The Main Differences Between External and Internal Customers

The Importance of Internal Customers in a Business

Revenue Benefits

Compared with external customers, internal customers are the first point of contact — the bridge. They are the people who understand the strengths as well as the weaknesses of the product. Therefore, taking good care of internal customers can also help your business grow.

Vingroup can be taken as an example to help you understand internal customers more easily.

Vinpearl is a major arm of the Vingroup conglomerate. Employees working at Vin receive annual vacation rewards at various Vinpearl resorts. This turns them into an intermediate communication channel to external customers. They experience Vingroup's services and products directly — and naturally, if their experience is good, they will absolutely recommend it to their friends and family. This is one of Vin's smart strategies for using internal customers.

The same goes for VinFast: they offer discount and installment policies for their employees. Once again, Vin's employees become internal customers of the business. They use Vin's products and carry those products out into the market. You can see this clearly: in 2020, VinFast captured 7.21% of the car market in Vietnam in less than a year.

Human Resource Benefits

Employees are the human resource — and at the same time, the internal customers — of a business. Taking good care of internal customers, i.e. employees, not only reduces staff turnover but also motivates them in their work.

As the illustration above shows, salary and benefits are very important in the manufacturing industry. If your business does not handle this issue well, it can seriously damage your human resources. This also means that manufacturing-industry employees work mainly based on the salary and benefits the business provides. So caring for your internal customers and your employees will help your business grow in many different ways.

How Do You Care for Internal Customers?

The question arises: "Are internal customers really that important?" The answer is yes — however, they will not matter as much as external customers, who are the long-term users and the main source of your profits. That said, internal customers are the test that tells you whether your product is genuinely good. This group's experience will help you improve the product before taking it to market. So, how do you care for this customer group? Take a look at some suggestions below!

Reasonable Employee Compensation Policies

Employee policy is one of the most important factors of a business — and also one of the issues that gives businesses headaches. Good compensation policies like salary and bonuses are one part, but you can also give gifts or offer discount policies and introduce your products. This not only makes your employees feel more comfortable but also serves as a bridge helping you reach more external customers.

A typical example of this is Samsung's policy in Vietnam. Their salary, bonus, and facility policies are excellent — shuttle bus support, very good food and accommodation, plus high income and benefits. However, what really earns Samsung the trust of its employees is the discount policy. They give discounts to all employees when using Samsung products — up to 60% depending on the product.

And you can see that Samsung employees all use Samsung products and love the place where they work dearly. There's hardly any reason they wouldn't recommend their company's products to the outside, right?

So consider your employee compensation policy if you have not yet appreciated the importance of this customer group!

A Dynamic, Creative Working Environment

Currently, the largest age group in Vietnam's population pyramid is 25–35. This means the main working-age group is 25 to 35 years old. Therefore, a dynamic, creative working environment suits this age group best.

At this age, beyond income, they also ask: is the working environment here fun and dynamic? Does working here help them grow and learn a lot? Since their drive for advancement is very high, the working environment becomes extremely important.

Their satisfaction with the job means they are willing to introduce the company's products to more people.

Here are a few tips you can refer to for building an effective, dynamic working environment:

• Be an inspiring manager

• Promote equal relationships among employees

• Use eye-catching interior decoration

• Arrange the office workspace creatively

• Build an open corporate culture of "speaking up – opening up"

• Allow freedom to personalize individual workspaces

Specific, Clear Job Assignments

The most important thing at work is clarity — not only with employees, but even when you work with partners and distributors. Clarity in work is essential.

For employees: when they feel you are straightforward and easy to work with, they will not hesitate to share their work difficulties. This is especially important for employees who work directly with the product. Suppose you assign them a task that is not specific — they cannot frankly tell you this, and their turnover rate will be very high. This matters even more if you have employees whose job is quality checking. They might tell you nothing about the product and simply leave.

The same applies to business partners. The groups that supply and distribute your products also need clarity when working. Because if you are not clear, you will not only lose your supply source — you may also be unaware of product problems.

Use Management Software

Using management software like SimCRM not only helps you manage your employees but also helps you manage the workload. From there, you can grasp which employees are working effectively or not. This not only makes it easier for you to decide on salaries and bonuses but also gives employees opportunities for advancement.

For example, the SimCRM customer management software has several modules that can help you manage your business better, namely:

• HR management module: stores employee information, contracts, and benefits.

• Work management module: tracks activities and work progress.

From there, you can provide timely solutions for employees, reduce turnover, and have grounds for raising salaries or cutting staff.

Your Company's Internal Customers Are Your Customers Too

From the information above, you surely now understand how important internal customers are. Using internal customer strategies well will bring many benefits to your business. You can grasp your product's strengths and weaknesses. From there, you can improve your product to better quality. And these customers are also an intermediary channel to your external customers.

So the internal customers of your business are your customers too.

If you have any questions that need answering, comment below! SimCRM will do its best to resolve your questions.

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