ENTR customer

Definition of a Customer

• A customer is generally defined as a person or entity that purchases products or services.
    - Initial thoughts regarding customers include:
      - A customer does not necessarily have to buy a product but can simply show interest in it.
      - Customers can arise from a problem that a product aims to solve.

• Example: A person struggling to access their email could be considered a potential customer for an email management tool.

Chain of Customers

• Emphasis on the complexity of customer identification:
    - Businesses typically cater to multiple customer types rather than a singular definition.
    - A chain of customer links exists in the realm of business:
      1. Creating value.
      2. Delivering value to the customer.
      3. Capturing value.

Business Models (Types)

• Two major business models are identified:
    1. B2B (Business to Business): Selling products or services to other businesses.
    2. B2C (Business to Consumer): Selling products or services directly to consumers.
    - Hybrid businesses that engage in both models are also recognized.

• The choice of business model dictates the strategic path an entrepreneur should take.

Examples of B2B and B2C Engagement

• Coffee Cup Problem
    - Example of addressing coffee cup spills:
      - B2B: Selling improved coffee cups to large companies like Starbucks or Dunkin' Donuts.
      - B2C: Selling improved coffee cups directly to consumers like individuals or families.

• Deodorant Issue
    - Example of a deodorant problem and its potential solutions:
      - B2B: Providing a better formula to companies like Dove or Johnson & Johnson.
      - B2C: Selling improved deodorants to individual consumers.

Considerations for Entrepreneurs

• Each business model has distinct pros and cons:
    - B2B:
      - Pros: Potential for larger sales (larger contracts from corporations).
      - Cons: Fewer customers, a complex sales process (more stakeholders involved).
    - B2C:
      - Pros: Easier to sell to many individuals in a market.
      - Cons: Each sale may yield less profit compared to B2B sales.

The Sales Process and Customer Types

• Importance of understanding different types of customers:
    - Differentiating customer roles helps understand the sales process:
      1. End User: The individual or entity using the product.
          - Example: A student using a laptop or a traveler using a specific checking process through an airport.
      2. Economic Buyer: The individual or entity paying for the product.
          - Example: Someone purchasing a coffee cup for personal use or a university paying for technology.
      3. Champion: The person advocating for the purchase of the product.
          - Example: An employee supporting the acquisition of new software.

• Sometimes, the end user, economic buyer, and champion can overlap (e.g., an individual might buy their own laptop).

Customer Types in Entrepreneurial Ventures

• Importance of recognizing the complexity and overlap in customer types:
    1. Primary Customer Types:
       - End User: Directly uses the product.
       - Economic Buyer: Funds the purchase.
       - Champion: Influences the decision-making process.
    2. Secondary Customer Types:
       - Influencer: Provides information that helps the buyer make decisions but does not have direct authority.
       - Example: A restaurant critic influencing diners based on reviews.
    3. Saboteur:
       - This type can halt or impede purchasing decisions.
       - Can be an individual or a policy that prevents the sale of a product.
       - Example: University IT policies could limit the purchase of certain technologies if they do not meet security standards.

Case Examples

• Example 1: Pokemon
    - End User: Children playing the game like a five-year-old nephew.
    - Economic Buyer: Parents buying games/toys.
    - Champion: The child advocating for the purchase (e.g., telling parents about specific products).

• Example 2: Water Filtration System for Data Centers
    - End User: Facilities manager using the system to ensure efficiency.
    - Economic Buyer: The company or department financing the filtration system.
    - Champion: The sustainability officer advocating for the purchase due to regulatory or ethical business practices.

Summary of Customer Roles and Definitions

• Clearly defined roles in the decision-making unit are essential for understanding market principles:
    1. End User: The person using the service/product to solve a problem.
    2. Economic Buyer: The individual or entity that budgets for and purchases the product.
    3. Champion: The person or entity advocating for the purchase or encouraging use, potentially with influence in the decision-making unit.
    4. Influencer: Independent individuals who provide opinions that can sway purchasing decisions.
    5. Saboteur: Entities that can prevent or slow down a purchasing decision, including individuals and systemic policies.