What is an Internal Customer?

internal customers definition

The Difference Between Internal and External Customers


Several years ago, I was asked a very simple question: “Who is your customer?”   Perhaps I was naïve, or maybe just ignorant, but I replied to the simple question with an equally simple answer: “The people who pay our company money for our products and services.”  He clearly expected my response, because the executive I happened to be talking to quickly asked me a follow-up question.

“Do you talk to customers?” he asked.

“No” I said “I just work in Finance.“

He smiled. “Ok, so you actually have internal customers.”

“Great” I thought to myself, “Internal customers – a new management fad.”  It was the first time I heard the term ‘internal customers.’

Years later, I find myself sitting in Beijing Capital Airport, on the way home after spending two weeks working across the table from a man named Mr. Qu, who is a customer of mine (in the traditional sense).

What are Internal Customers?

So what is an internal customer?  Over the past two weeks, while negotiating with Mr. Qu, I’ve also been sending messages to a few of my key stakeholders back home to keep them informed of progress.  In my final message before heading to the airport, I wrote “In short, agreement signed, $3.2M secured.”  These key stakeholders are my internal customers.

Internal Customer = Key Stakeholders

Unlike external customers, your internal customers don’t depend on the product or service as your external customers do.  Rather, internal customers rely on your personal effort, attention to detail and standards of quality.  In short, your internal customer is the person or group of people within your organization who depends on the work you do.

RELATED: What Your Customers Really Want

In my case, my internal customers include three executives, who expect me to make the project successful.  One of them, who happens to be my boss, expects me to use the project as a vehicle for developing some of our junior employees.  Another, who is responsible for sales, expects me to achieve the highest gross margin possible and to build confidence with the customer to win future business.  And the third is responsible for programs, and expects that I follow our internal processes and procedures to make sure we minimize risk to our company.  While each has their specific interests in mind, all of them expect the project to be a success, and so does Mr. Qu.

“Your internal customer is the person or group within your organization who depends on the work you do.”


In a generic sense, an internal customer may be the person at the next workstation who needs you to do your work correctly in order to perform their operation.  An internal customer may be another team or department that relies on you to provide a service to help them do their job.  And, as in my case, an internal customer may simply be an executive in your firm who expects you to get a job done, and to provide real and accurate information as needed.  Here are some examples of who your internal customer might be:

 what is internal customer


The Difference Between Internal and External Customers

So what’s the difference between an internal and external customer?  With the exception of a financial transaction for a product or service, not much.

RELATED: What Are You Saying to Your Customer?

Spending two weeks with Mr. Qu (whose company is paying my firm a large sum of money), while keeping in contact with my internal customers back home, taught me what it really means to know who your customer is.  Regardless of whether you’re talking about internal or external customers, ALL customers expect the same basic things.

what are internal customers

Here are 4 basic things that all customers expect from us:

1. All Customers Expect Answers and Information:  Mr. Qu looks me right in the eye and asks some fairly difficult questions.  Nothing awkward or intimidating, just really good, insightful questions.  When dealing with customers, it’s our responsibility to have answers.  And if we can’t answer right then and there, our responsibility is to go get the answers and information.  After all, the customer is paying us, so it’s fair that they should expect answers.  Internal customers also expect answers, just on different things, which may include things like payment status, budgetary spend and risk assessments.

2.  All Customers Expect Competence and Integrity: When we signed this particular contract about a year ago, one of the last things Mr. Qu said to me before I left was “Don’t send the wrong people to China.”  They were paying us a handsome sum, and expected to get the value they were paying for.  Similarly, my internal customers expect me and my team to get the job done the right way.

3. All Customers Expect Us to Solve Problems: If our customers have to solve all the problems, why do they need us?  Mr. Qu expects me to solve problems and to address issues that arise in a timely manner.  Internal customers also expect us to solve problems and issues, be it a budget gap, a technical problem or a staffing issue.

4. Customers Expect Us to Meet Our Commitments and Get Results: During my meetings with Mr. Qu, we discussed dates and related commitments.  He ultimately expects work to be done in a timely manner and at a level of quality that is acceptable.  My internal customers also expect me to meet commitments on things like schedules and financial forecasting.  All customers expect us to perform as promised.

So, ultimately, internal customers are really just like external customers – they just happen to be within our organization and have a different list of specific interests.  But just like Mr. Qu and the end users of our product or service who happen to pay us money, your internal customers still expect us to meet commitments, to solve problems and to get results.


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