Attracting and Developing the Internal and External Customer

The Entrepreneurial Perspective

One of the most important aspects of a business is the customer. There are two forms of customers that entrepreneurs must attract and retain. These are the internal and external customer. Each form of customer has their own needs and separate motivations which will attract them and retain them.

The internal customers are the employees and stakeholders of the organization. These customers include employees, shareholders, and managers (Juran, 1988). These customers are directly connected with an organization and benefit from this connection. For example, employees get payroll for performance of duties and shareholders receive dividends for investment.

The internal customer has value to the organization within their primary purpose. Employees for instance, perform jobs which make the company profit and the loss of good employees hurts the company in a variety of ways. One way in which this can be seen is in high turnover. Turnover leads to higher training expenses and burnout of other employees. Other examples of how the loss of internal employees can damage the company can be seen through the loss of stockholders. When people stop investing in a company, the company loses capital which means less money for projects or expansion. From these examples, one can see that it is imperative to attract quality internal customers as well as retain them.

With regard to the internal customer that is the employee, there are a variety of methods for attracting employees which include:

1. Networking- Asking other professionals or people that work in or around the entrepreneur. 2. Internet recruiting- Searching online job centers such as Monster.com. 3. Employee referral- Having employees make suggestions or refer an acquaintance. 4. Outsourcing- Utilizing temp firms or individuals that works on a contractual basis (Katz and Green, 2009 pg. 627).

Many of these methods are suitable for small businesses because they are cost efficient. However, attracting employees is not as difficult as developing them. In order for the employee to maintain interest and to continue being valuable to a company this entails job training. Some of the important aspects of training are that it should be ongoing, usable to the employee, and owners should think of it as an investment. Often entrepreneurs and managers will train a person and then set them to the task. While this needs to happen this is also an invitation for boredom and lack of development. Companies have many facets to what they do and there is always something for an individual to learn (Katz and Green, 2009 pg. 635). After training owners need to allow the employees to try their new skills as this will build confidence and trust. While training can be time consuming and expensive it can also develop skilled help that will stay for a long time.

In contrast to the internal customers there are external customers. External customers are the individual not connected with the organization but benefit it, i.e., consumers (Juran, 1988). External customers are attracted to the company in very different ways then internal customers. External customers are attracted to companies through customer service, product differentiation, and most importantly through public relations. Public relations strategies can garner large interest in a business and build long term relationships. There are many different public relations strategies such as sponsorship, community events, and making donations. There are also less expensive means for utilizing public relations such as writing articles or creating reading materials that are related to the business (Katz and Green, 2009 pg. 331). A great example of this type of strategy can be seen in internet marketing in which websites will often provide free services that bring customers back to the site. Public relations provide the means for entrepreneurs to build relationships with customers and build value in the business through indirect means. This approach is a powerful tool in attracting the external customer.

The importance of the internal customer and the external customer can be seen in the value that they bring to the organization. Both internal and external customers need to be carefully handled in order to cultivate long term relationships. The need for both customers to be satisfied is imperative.

References

Juran, J. M. (1988). Quality Control Handbook (4th ed.). New York, NY: McGraw- Hill.

Katz, Jerome, Green, Richard (2009). Entrepreneurial Small Business (2nd ed.). New York, NY: McGraw-Hill

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