A customer is anyone who is purchasing a product from a second business/source. A formal definition is: someone who pays for goods or services. It could be an individual, group, government, or even non-for profit organization.

Now, there are two types of customers. One if the reason why a company is in business. They sell their goods or services to an outside third party. This is called an external customer. For example, you are in the business of selling marketing research to a third person company. Your goal is to conduct market research, and provide final report to your external customer. It is the consultant who will actually sell the product and deliver the final report to the consumer.

Now, there are also internal customers. These are people who work within the organization in different departments. For example, in the market research firm, there are people who program the surveys, tabulate the results, create powerpoints. These are called internal customers. The data analyst is the internal customer of the consultant. The raw data that the analyst produces will never go to the external customer.

The measure of customer satisfaction should be consistent between both types of customers. If internal customers are satisfied, then they will be likely to produce a good products that will then be sold to the external customers. If the internal groups are satisfied, then the company will function smoothly and efficiently. However, in reality, external customer satisfaction seems to be the core goal of most firms. Companies work extremely hard to please their external customers. A satisfied external customer could translate into a long-term customer.

Internal customer satisfaction is often bypassed, because some firms believe that their employees should work hard and produce a good product since that is their job, and they earn a living to do this. Perhaps if more companies actually focused more on internal satisfaction, there will be less turnover, less employee leave and more efficient workers.