What’s a Customer Chain and Why Is It important?


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customers, you have no business being in business. Everyone
has customers. Businesses have customers: the businessperson or consumer
who uses the end product or service they produce.
Government agencies have customers: the citizens and
residents they serve. Nonprofits have customers: the people
whose needs they serve. Yet if you ask the people in most
organizations who their customers are, you’ll receive a
convoluted answer. Why is that?

The Answer to “Who are Your Customers?” Seems to Depend
on Whom You Ask and What Role They Play in Your Organization

The brand manager for a car brand will describe a specific group
of end-consumers as his target customers—34- to 48-year old soccer
moms in upper middle-class suburban neighborhoods. But, if you ask
the sales rep at a car manufacturer to describe his customers, he is
likely to talk about the businesspeople who own the largest
dealerships. The product line marketing manager for that same brand
may spend most of his time working on incentives and collateral for
the salespeople at the car dealerships.

An insurance provider’s VP of Sales may describe his independent
agents as his customers. The product line marketer who prepares
collateral for a new insurance product is focused on making it easy
for the insurance agents to introduce that product to his clients. A
Web merchandiser may be responsible for developing Web content
targeted for end-users who are searching for affordable car insurance
in their states.

Many smart people within well-respected companies consider their
wholesalers, distributors, agents, brokers, or retailers to be their
customers because these are the people with whom they interact on a
daily basis. Dealers, agents, brokers, retailers, distributors, and
wholesalers are not, strictly speaking, “customers.” They are channel
partners who help you reach and serve your end-customers. Certainly,
keeping wholesalers, distributors, and retailers happy and attending to
their needs is critical.

However, the real customer for any business is the end
consumer of the product or service it produces
—the person or
company who uses or consumes that product, not the ones who
distribute the product to the user or even, necessarily, the
ones who pay for it.

When asked who his customers are, the head of government agency
may answer that it’s the taxpayers, of course. But, when you then ask
about the services the agency provides and to whom they’re provided,
you quickly learn that the government agency that’s responsible for
children’s welfare views at-risk children as their end-customers. The
agency responsible for public health worries about the health of all
of the people in their jurisdiction, including passers through and
illegal immigrants—not just legal citizens and/or taxpayers.

If you ask the marketing director of a not-for-profit who his
customers are, you’ll usually get a great description of his ideal
donors. But when you ask the executive director of the same
not-for-profit who her customers are, you’ll get a compelling
description of a specific target audience, a detailed account of the
situation in which those people find themselves (and why), and a
rundown of the services these people need that his not-for-profit

Surely, keeping taxpayers and donors informed and on board is
vital. Yet the real end-customers of government organizations and of
not-for-profits are the people for whom they provide services, not the
people who pay them to do so. So an end-customer is often not the
person who pays for something. It’s the person who is the raison
of the organization.

People in Different Roles Interact with Customers at
Different Links in Your Customer Chain

A lot of the confusion that abounds in most organizations about
who the end-customer is and for whom we need to optimize our
business processes has to do with the many different levels of
customers, partners, and stakeholders we serve.

The Customer Chain: It’s Customers All the Way Down

We used to refer to demand chains and supply chains. Now that
we’re designing complex customer-centric ecosystems; not just value
chains, we’re experimenting with the idea of a customer chain. The
end-customer is at the top of the chain. There are different kinds of
customers and partners all the way down the chain. As you design or
improve your ecosystem, you’ll want to streamline the scenarios for
the customers at each level of the customer chain. But you should
always start with (or at least bear in mind) the critical needs of your

Ronni Marshak offers a simple way to wrap your mind around a
customer chain: follow the route to market a bag of potato chips!

the Customer Chain

Start with the
End-Customers, but Make Sure You’re Making It Easy for Every
Stakeholder Between You and Them
By Ronni T. Marshak, Sr. VP and Sr. Consultant, April 8,

Republished with author's permission from original post.

Patricia Seybold
With 30 years of experience consulting to customer-centric executives in technology-aggressive businesses across many industries, Patricia Seybold is a visionary thought leader with the unique ability to spot the impact that technology enablement and customer behavior will have on business trends very early. Seybold provides customer-centric executives within Fortune 1 companies with strategic insights, technology guidance, and best practices.


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