Why you need to identify your primary customer

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"I'm sure he's stealing," said the manager. "But I can't fire him."

I was working for a parking management company at the time, and visiting with the manager of a busy hospital location. We watched as the cashier in question served a steady stream of cars.

The manager explained that he suspected the cashier was stealing a small amount of cash each shift. He lacked hard evidence, so he wanted to investigate further. Our client, the hospital's facility manager, said no. 

The cashier was well-known for his friendliness. He was popular with patients, visitors, and employees alike. People would line up at his gate, even when the line was shorter at another exit. He had even been featured in a story about customer service on a local television news program.

Our client felt the cashier was good for public relations and was willing to overlook a small amount of theft.

In the parking business, it's easy to assume the people parking in their cars are the customer. And they are. But the primary customer is the building owner or property manager who hires the parking company.

Understanding this fact led the manager to avoid investigating the cashier. His boss supported the choice. Why risk losing the parking contract by angering the facility manager? After all, if the cashier was indeed stealing, it was the hospital’s money that was being stolen.

Do you know your primary customer?

This post can help you identify them. You’ll also discover why it’s a vital exercise, and how knowing your primary customer can lead to unexpected decisions such as letting a suspected thief keep on stealing.

A person uses a magnifying glass to examine wooden blocks cut out to look like people.

Who is a customer?

A customer is anyone you serve. It could be someone who buys your products or services, but there are many other groups who could be considered a customer as well.

Here are just a few examples from the hospital parking operation:

  • Hospital leaders (our client)

  • Service providers whose employees work at the hospital

  • Delivery drivers

Think about the people you serve. The list might include groups that aren't traditionally considered to be customers, but fall under the definition of someone you serve:

  • Vendors

  • Contractors

  • Coworkers

In some businesses, like hotels or nonprofits, identifying your customers is even more complicated.

The parking company I worked for served hospitals, office buildings, hotels, stadiums, airports, and other venues with paid parking. Here's an example of our customer list:

A table listing various parking company customers

Without doing this exercise, the parking manager would be tempted to focus on maximizing revenue, but our hospital client prioritized service over revenue.

It was located next to a large university. The hospital’s parking lots and garages would become full of students if it didn’t charge a nominal fee, which would make parking more difficult for patients, visitors, and employees. So it hired the parking company to charge for parking.

Most employees had monthly passes. Patients and visitors could get validated or reduced-rate parking. The average fee collected was just $2.

That’s why the long line of happy customers was far more important to our client than the $10 or so that might be missing from the cashier’s till each day.

Remember, the manager suspected the theft but had no proof.

One challenge was our client insisted the parking lot’s exit gate be kept in the raised position during busy times. This allowed cars to exit much more quickly, but it prevented the parking manager from getting an accurate count of cars that exited. The normal procedure was to note the number of times the gate was raised and lowered and compare that to the amount of fees collected at the end of the day. This was impossible to do when the gate stayed in the up position.

Creating your own customer list is a useful exercise that will help you better understand the different groups you serve. This short training video walks you through the steps.

Who is your primary customer?

The primary customer ultimately pays the bills and drives your business. This is a type of customer, not to be confused with target customers or customer segments.

For example, let's say you manage a museum. You might have several target segments that you try to attract:

  • General public

  • School groups

  • Tour groups

Each segment might include several sub-segments with different needs. For instance, the general public could be further divided into different groups:

  • Members

  • Locals who visit occasionally

  • Vacationers from out of town

You could probably slice and dice these groups even more, but you get the idea. Overall, visitors are the museum's primary customer because that's who the museum exists to serve.

There are other customers the museum has to care for. Here are just a few:

  • Referral partners such as hotels, tour organizers, and schools.

  • Donors who help fund the museum.

  • Members of the press who write stories about new exhibits.

All of these groups are important, but it's critical for museum employees to know that visitors are the primary customer.

There are two reasons why.

Focus

Your customer experience vision should focus on your primary customer. This is a shared definition of an outstanding experience that gets everyone on the same page.

At a museum, the vision influences all sorts of decisions including the layout, the curation of exhibits, the way exhibits are displayed, the recruitment of volunteers, and the way employees and volunteers interact with visitors.

A museum that creates an amazing experience for visitors will likely keep referral partners, donors, and the press quite happy as well. On the other hand, a poor experience will make it more difficult to attract partners, donors, or good press.

Prioritization

You sometimes need to prioritize the needs of one customer group over another.

Imagine a generous donor wants to fund a new museum exhibit. The exhibit is of personal interest to the donor, but would have limited appeal to the museum's visitors. Building the exhibit would also require another exhibit to be removed, potentially one that visitors really liked.

Taking a donation could be tempting, but in this case it would hurt the primary customer.

How can you identify your primary customer?

The best way to identify your primary customer is to think about the person or group of people who is most essential to your business. Without them, your business would not exist.

This is easy in some businesses. In a retail clothing store, that would be the people who buy your clothes. At a bank, it would be customers who deposit and borrow money.

It can be trickier in other industries.

A florist might take orders through a national service and deliver the floral arrangements to local recipients. Who is the primary customer, the national service or the local recipients?

The answer depends on which group is the ultimate economic driver.

It might be the national service if the vast majority of the florist's business comes through this partnership. Perhaps it's an exclusive relationship.

On the other hand, the primary customer would be the recipients if the florist also has its own local customers that it serves directly. The florist might supply local restaurants, hotels, and other businesses in addition to serving walk-in customers and taking delivery orders direct from the consumer.

Try to identify the group of customers who are most essential to your business. These are the people your business is naturally built around, and without whom your business would not exist.

Next Steps

Customer-focused organizations focus on their primary customer. Other customer groups are seen as vital to keeping that primary customer happy.

Once you identify your primary customer, the next step is to create a customer experience vision that focuses on what you do for them. You can use my step-by-step guide.

Learn more about creating a customer-focused culture from The Service Culture Handbook. It contains all the lessons and tools you need to get your employees obsessed with service. Book Authority named it one of the 100 best customer experience books of all time.