Customers vs users (what’s the difference and why do I care?)

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customers vs useres

Do you know the difference between “customers” and “users”? When I was creating my requirements writing course, these terms created some confusion with the person editing my content. It got me thinking that not everyone knows the difference. So, I’ve written this article to shed some light on a concept that is actually pretty important when you’re defining your product.

In this picture, I’ve summarised the relationship between customers and users and I’ll discuss each of these below. 

Customers

A customer is the person or entity that will be giving you money. Note that I didn’t say – “giving you money for your platform or app”. This is because you may actually make money from someone that will never access your web platform or mobile app!

There are many ways to make money from an app. The most common is someone paying money to access the app or to access special features within your app. These are your direct customers. So, if you have a web platform that charges $99 a month, the person signing up to your app will be your customer.

If you make money from selling advertising space, then your customer is not the person that signed up to your app. It’s now the people or companies that are advertising with you or the ad network you subscribe to. If you sell the analytics from your app, then your customers are the people or companies buying that information. These are your indirect customers.

You may have more than one customer. If you’re creating a 2-sided marketplace of buyers and sellers and the sellers have to pay you a commission, then the seller is your customer. If you then put advertising on your website, then the people advertising on your site will also be customers.

Users

The users of your app cover a lot more ground than your customer. Users will be accessing your app for a specific purpose – and it may not be for obvious reasons. As mentioned above, your customers may or may not be one of your users.

When you’re starting out with defining your product, create a list of users for your app. Let’s start with the people that will be primary users – the ones that will sign up for your app or download it onto their phone. Then there are users that are invited by your primary users to interact with your app. If you’ve got an invitation platform, then these are the people that receive an invitation. If you’ve got a fundraising platform or event ticketing platform, then your users will also be those that give money to the primary user. These are secondary users – whose experience with your platform is just as important as the primary users.

Next, there are users that will be needed to run your app – the people that work behind the scenes. These are your operational users. There’s a good chance there will be some admin involved – people to manage the users, people to create reports, create/update content on the app, etc. There’s also going to be support people who will answer questions from your users and help them solve any problems they might have in the platform.  

The next level of users includes people that are managing the business end of your app (e.g. management users). Here you may have to be a bit more creative. If you’re primarily doing this on your own, then you’re going to be wearing lots of hats. You need to put on those different hats and think about what you might need the application to do so that you manage your business.

For example, as the owner, there’s a lot of reporting that you’ll want to look at to determine what improvements to make and how profitable your app is. You’ll also be in charge of the security of your user’s personal information, so there are security concerns. Have customers or users in the EU? What do you need to support GDPR? If you’re selling advertising space, then you need information on how users interact with your platform. As a marketer, you’ll want user information that you can use to get new customers, retain existing customers or increase the spending of existing customers. Your accountant will want sales information.      

As you can see, your list of users might actually start to get a bit long. Of course, not all users are created equal in terms of their importance in your app. However, being aware of them will help you to define a better product.

Why do you need to know this?

Your app should be driven by the needs and problems of your users. So, if you don’t know who your users are, then you won’t be able to define your product. In my last post on defining your product, I discussed how the users of the app should drive your requirements (e.g. “As a [user]…”). Knowing who your users are and knowing what they need from the app, will make it a lot easier to create a complete product.

 Your customers are just as important. Even though they might not use your app. You have to create a product that is worth them spending money on. So, understanding their goals and objectives will help you to include the features, functions and data in your product that your customers need as well.    

 

Want some help to define your customers and users? Send us your details and we’ll set you up with 30-minute discovery session to get you on the right track:


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