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Customer or Client? And why it matters!

Do you view the people who engage your services as customers or clients? The two terms are often used interchangeably, and to many people, they are indeed the same. In reality, however, they are very different and I believe it is important that advice firms recognize and understand those differences.

The one characteristic that both clients and customers share is that they are real people. People with a specific problem (or problems) that they are looking for your help in resolving. But that’s where the similarity ends.

The nature of the ‘customer’ relationship tends to be ‘transaction’ rather than ‘relationship’ based. For example, I am a customer of both Tesco and Waitrose, but a client of neither. My weekly shop is transactional.

The ‘client’ relationship on the other hand is characterized by;

  • An ongoing relationship
  • Some level of ongoing service
  • Regular communication and/or contact
  • Keeping in touch
  • Taking a genuine interest in them as an individual

In the financial services sector we work hard to build long term relationships and look holistically at all the individuals financial planning needs and establishing what is really important to them rather than just dealing with a single issue.

But even then there are only two levers you can pull to establish a real relationship. They are

  1. What you say
  2. What you do

Clearly these must be aligned and have the client’s interests at the centre. And, when it comes down to it, it doesn’t matter whether you see the individual as a client of yours… it’s whether that individual sees themselves as your client in their mind.


  1. Francis Klonowski Says:

    I thought you’d be interested in a recent telephone conversation I had with a major life office’s “Customer Services” department. [Perhaps a clue to their attitude in that title??].
    The young man kept referring to the client as “your customer”.
    After a while I said “Client, please”.
    “Client. He’s my client, not a customer. I don’t run a shop”
    “Well, he’s a customer of ours”.
    Enough said. Rail companies used to call us “passengers” but now we seem to be “customers” – and look where those companies are now in service terms.

  2. Steve Says:

    Good point, well made Francis. I think the fact that the provider sees your ‘client’ as their ‘customer’ underlines the different nature of your respective relationships. Your’s is long term… their’s is transactional and always will be. It’s always good to hear from the coal face. Thanks for sharing your story.

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