Internal Customers

Posted in Marketing and Strategy Terms, Total Reads: 3425

Definition: Internal Customers

They are people or employees within an organization who receive and utilize the goods and services produced elsewhere in the same organization as inputs to their work. For example, consider an investment firm, the investment cannot be made until the research data and analysis is obtained from another department.

So the investors are internal customers to the organization in this scenario.

To understand what an internal customer is, we have also have to understand what an external customer is. An external customer is someone who uses the output (product or services) of a company or an organisation but is not a part of the company. For example, Tata Motors gets its bearings from SKP Bearings. Here, Tata Motors is an external Customer of SKP Bearings.

On the contrary, an Internal Customer is any member of the firm or an internal part of the value chain who uses the output of another part of an organisation as its own input. For example, the sales team might require the inputs of the customer services representative so that they can place the right order.

A major difference between these two is that if the external customers do not like the product or service, they can simply move to another firm for the same. On the other hand, internal customer do not have a choice. They are bound to accept the outputs of other part of the organisation. It should be noted that higher communication helps internal customer service to flourish. It also helps the firm to serve the external customers better at the final stage of the value chain.


Hence, this concludes the definition of Internal Customers along with its overview.

Browse the definition and meaning of more terms similar to Internal Customers. The Management Dictionary covers over 7000 business concepts from 6 categories. This definition and concept has been researched & authored by our Business Concepts Team members.

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