Customer focus is critical to succeed with management improvement efforts. Few argue with that point, though my experience as a customer provides plenty of examples of poor systems performance on providing customer value (usability, managing the value stream well, etc.).
At times people get into discussion about what counts as a customer. Are customers only those who pay you money for a product or service? What about internal customers? What about users that don’t pay you, but use your product (bought from an intermediary)? What about users that use a service you provide for free (in order to make money in another way, perhaps advertising)? What about “internal customers” those inside your organization without any payment involved in the process?
I find it perfectly fine to think of all these as customers of slightly different flavors. What is important is providing what each needs. Calling those that actually use what you create users is fine, but I think it often just confuses people rather than adding clarity, but if it works in your organization fine.
To me the most important customer focus is on the end users: those that derive value from what your organization provides. If there is confusion between various customer groups it may be helpful to use terms like end user, but really using the term customer for a wide range or customers is fine (and modification such as internal customer to provide some clarity).
You just need to be careful to understand the different needs of the various customers. But I think the ideas translate pretty well. The Customer gemba is something you should understand. If you are focused on the end user then you need to experience the end user using the product or service. If you are focused on an internal process you need to experience the gemba for the internal customers using what you provide.
Toyota doesn’t sell cars directly to users in the USA. But those people driving the cars are where most of Toyota’s focus should be. The Toyota sales office needs to focus on the needs of dealers and perhaps fleet buyers. But most of an organizations focus should be on those using their products even if those are not the people paying the organization.
The customer focus for those paying the organization focus on the things that matter to them which could relate to predictable delivery, financing terms, warranty process, etc.. But really, to me, they are much more like internal customers than those that use your products and service to create value. They sit outside your organization but really they are just another part of the process of getting the offering to the end user.
At the same time it is import to focus on bringing in cash. Making sure those that actually pay you are pleased is important. But don’t stop your focus there. Don’t rely on others to get you feedback from end users. You need to get to that user gemba and learn. Only by knowing the real needs and desires or your end users can you innovate.
If you don’t want to call end users of systems such as Gmail customers, when they are using the service for free. That is fine. But when you are working on improving the offering you need to understand the gmail users experience (the gemba for them). Those paying to place advertising on Gmail are also customers. And paying attention to the value stream for them is important. Again you would need to understand the gemba from their perspective (which could easily include things like reporting tools to let them improve their results, the usability of the software for placing ads and such things).
There will be tradeoffs between the ideal state for users and the desire to have revenue. But this is always the case. Yes Gmail users may desire no ads. An Apple customer probably would like a free MacBook Pro. Just because you are providing customer focus doesn’t mean no other factors exist. They always do. Whether the end user is paying to use a product or service or not.
I don’t believe the difference in how you focus on making the product or service meet user needs is dependent on the payment system. How the use of the produce or service does influence the optimization of the system. But I see that as a system dynamic not a qualitatively different setup, where paying customer systems need to be seen as distinct from users that are not the ones paying. Instead it is a part of the system and like all the parts of the system they way in with the customer/internal-customer/end-user/intermediary matter is based on the way they interact with the system.
If there is too little emphasis given to end users then I would rather lesson the focus on other customers and focus on end users. And if we had short term cash flow issues I would focus on those customers that will bring
in cash fast (which might not be end users). But in general there shouldn’t be a tradeoff. We should be able to have those working on various parts of the system continually improving the parts of the system they are focused on.
Related: What job does your product or service do? – Customer Focus by Everyone – Ask customers what one thing could improve – Customer Focus and Internet Travel Search – Simple Customer Care Action: Communicate