Redefining "Customer" in the Social, Public, and Healthcare Sectors
In the pursuit of value creation, organisations across sectors often use the term "customer" broadly. However, this one-size-fits-all approach overlooks the nuances of non-traditional business settings.
Language matters. And customer is an overused in one sense and a charged word in another sense. For example, in the social sector you can use the world clients, patients, beneficiaries etc. In the public sector, you can use citizens, beneficiaries, users, patients, and even consumers.
Drucker said:
Not long ago, the word “customer” was rarely heard in the social sector. Nonprofit leaders would say, ‘We don’t have customers. That’s a marketing term. We have clients . . . recipients . . . patients. We have audience members. We have students.”
In all these scenarios, we have to focus on the relevant question that Drucker asks, “Who must be satisfied for the organisation to achieve results?”.
That is the fundamental question, and the most important is “who must be satisfied?”. It is actually more challenging and complex in these sectors to clearly define who must be satisfied. This is significant because this determines your value creation trajectory.
Drucker suggested what I consider the best formulation for this challenge. He proposed two kinds of customers: primary customer and supporting customers.
Drucker's Customer Framework: Primary and Supporting Customers
Drucker offers a valuable framework to navigate this complexity:
Primary Customer: The person whose life is directly changed by your organisation's work. Focusing on the primary customer is essential for achieving true impact.
Supporting Customers: Individuals or groups who play a vital role in supporting your organisation and its mission. They may include volunteers, partners, funders, or even employees.
And the way I see it is that supporting customers at the heart want the primary customers’ life to be changed; they are aligned with the organisation, however, may have other goals of their own. Whether you see this as the concentric circles or the pyramid, the logic is the same.
Let’s look at some examples.
Healthcare: The patient is obviously the primary customer. However, if you are a GP or a Hospital, working with the family of the primary customer is critical. For one, they are critical for the long term of success of the patient, the primary customer and in their own they have other concerns, challenges and support that are needed. Understanding the distinction and providing value to both sets of customers creates an opportunity for a wholistic health care.
Clinical Trials: In healthcare, if we delve into clinical trials (just because I have spent time working on it in previous lives), you can see that the trial participant is the primary customer. If you are a site management organisation working with a range of clinical trial sites, the GP/Nurse becomes an important supporting customer and they must see value in the offer.
NFPs: If you are working in child protection and taking care of children in care. The supporting customers are the child protection agency, as an example. And in numerous ways, their value creation needs are different from the primary customer; the child.
The Challenge of Fundraising: Imagine you are raising money for a specific cause - climate change, cancer research, schools in the developing world. These opportunities require you to really understand who is your primary customer and who is your supporting customer.
Is the school the primary customer or the person who is donating? This is a tricky situation. The school and the students, are ofcourse the primary benefactors, and there is a logical case to be made that they are the people who need to be supported and cared for and whose lives are changed. I can make the case the other way around to that if you are not actually delivering any programs or activities and only fundraising, then in that scenario, the person who donates becomes your primary customer.
Understanding the distinction between primary and supporting customers is crucial for organisations across various sectors to create value and achieve their goals. By prioritising the needs of those whose lives are directly changed by their work, while engaging and satisfying supporting customers, organisations can develop targeted and effective strategies. Drucker's insights remind us that language matters, and by using the right terminology and understanding customer relationships, we can unlock the full potential of our organisations and drive positive change.
Readers Pointers:
Reflect on your organisation's mission and identify your primary and supporting customers.
Evaluate your current strategies and consider how they align with the needs of your primary and supporting customers.
Share this article with your colleagues and start a discussion on how you can better serve your customers and create value in your sector.