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‘Customers’ vs ‘Consumers’ — What These Words Might Symbolize

It’s more than just two words. It hints at what companies expect from you.

Images courtesy of Pexels.com

End-user ownership is on a decline. To illustrate shortly, we’re going to talk about a banana. First, a quick story.

One of my favorite shows in college was Kiefer Sutherland’s 24. Quite popular at the time, it featured a then-novel feature in storytelling. One storyline took place over an entire season spanning twenty-four real-time hours.

It sounds silly to type that sentence now. Finding a television series these days that doesn’t follow the same model of one overarching story taking 12 episodes or more to tell is difficult. But back then, it felt new.

Except for perhaps one season, I adored that show. I bought the DVDs as soon as each season ended and shared them with my college dorm wing. I lent them out to family and friends, many of whom quickly succumbed to my addiction involving the grim-spoken Jack Bauer and his many oh-so-very bad days. We would get together each week for the Jack Bauer Power Hour.

Good times. But let’s fast forward to today.

I have a young child in the house, à propos, I am a Disney+ subscriber. My wife and I quite enjoyed the WandaVision series. But there’s no chance of sharing the show with family. For now, there’s simply no way to own a copy. You still can’t even buy season one of the Mandalorian on physical media. Maybe someday, but certainly not now.

Mostly, that’s because Disney wants you to have a Disney+ subscription. Not hard logic there. So the choice is quite limited. Pay and get in or miss out.

This is a growing symptom of how content and products are now being marketed to the end-user, and beyond that, the role expected of the end-user. Have you noticed what most shoppers are called these days? There’s a word being used far more often I want us to consider:

Consumer.

Not customer.

On a surface level, the words consumer and customer may not seem that different. Most modern marketing certainly doesn’t seem to think so. I mean, when car-shopping, it’s a good idea to look up articles on Consumer Reports. Not the other thing.

To tell them apart, let’s talk about that banana.

Our story starts with someone growing our banana. Multiple parties will purchase it. Producers sell the banana to the distributors, who in turn sell it to the grocery stores. Eventually, someone wanders into the store off the street, buys the banana, and the banana will soon after meet its demise.

The distributors and the grocery stores are the defined customers in our example. They sell and resell the banana, adding in some profit with each transaction until the banana hits the shelves.

Then our consumer wanders in and buys the banana. As mentioned, it’s shortly thereafter curtains for our poor banana and the process ends. In this case, the product is physically destroyed. No value remains.

Notice where this example ends. At the bottom, after preceding profits are tacked on, is our consumer holding both the banana and the bill.

Keep that picture in mind. We’ll use it later.

A customer is a person or entity that purchases goods or products. This is typically done with the intent to resell. Here, the concept of exchange is very important. Value changes hands. At higher levels, we commonly call this trade. Both sides of this equation require giving and taking. Negotiation and compromise.

A consumer, however, is different. A purchase does not necessarily have to take place for a consumer (though obviously, in our example he walks in and buys our doomed banana). However, as hinted at in the name, the product or service is used by this person and is consumed, leaving no value in the end. No ownership.

I’d like to propose a slightly different way to look at this process, now that we have some official definitions in order. If your part in this process is to own something, with the potential to sell it again later, you are a customer. If your part is to be stuck at the bottom of this chain of products being sold and resold with ever-increasing profits tacked on, you are the consumer.

Customers conduct trade and exchange value. Consumers destroy value.

This is about words. Words carry power.

Sticks and stones may break my bones, but words will never hurt me.

This aging adage is grossly inaccurate. Ask anyone who was ever given a nickname against their will how they feel about words. Try throwing terms like boomer or millennial or leftist or rightist or snowflake or insurgent around in casual conversation, and then talk about how words never hurt.

This is the (dark?) age of social media. Words are condemning and dividing. The court of public opinion is a living, breathing monster, and so much power can be conveyed simply by giving someone or something a name.

Are the people that stormed the Capitol in January 2021 protestors, thugs, rioters, or insurgents? As of this writing, the jury is still out. Each word carries a very different and difficult meaning with drastically varying penalties attached. When is a shooting classified as manslaughter, mass murder, or domestic terrorism?

See the difference in our words?

Indeed, what we label people and things has become an entire branch of politics. Even the word labeling itself carries weight to it. Words are powerful because words are how we convey thought. George Orwell wrote about newspeak for a reason.

So let’s pull this back to our idea of ownership and the person left holding the banana. Why should we care whether companies call us customers or consumers? Is this discussion just an exercise in splitting hairs?

I don’t think so, and let’s investigate why by asking what power is conveyed by using one word over the other? Well, the obvious answer is intent.

If a company refers to its buyers as consumers, what are they expecting of these buyers? That company would expect those consumers to purchase a product (typically at the asking price) and consume it, leaving no ownership over what remains. Leaving nothing saleable. No value.

For example, my wife and I are absolutely consumers of Disney+ content as we have no ownership over anything. The money is consumed every year by our subscription, as is our time. At the end of the year, we have nothing left to own. If we cancel our subscription, all of the content we had easy access to is gone.

Unlike my DVDs of 24, I don’t have episodes of WandaVision on physical media to lend or resell once I’m done with them. No ownership. No residual value.

Now expand this idea to buying — or worse yet — leasing a car. One you hopefully researched on, say, Consumer Reports.

We mentioned earlier that the word customers carries a different connotation. Another term we threw around was the idea of trade. About having the power of negotiation and preserving value. In the automotive industry, do manufacturers and dealers want you to be a customer or a consumer?

How much actual negotiation power will car dealers allow a buyer? Answering this might shine a light on the matter.

So you car-shop. You find and fall in love with a car. You’re ready to buy. The salesperson takes you inside to show you the numbers so you can make your buying decision (and no, don’t think I missed the irony just now of linking to Consumer Reports).

You sit down. Your salesperson walks out from the back office and will tell you that he has good news. He slaps the four-square down on the table, then promptly breezes over the price of the car and your trade. His training tells him to immediately draw every ounce of your attention to that monthly payment, and for a reason.

Dealers won’t want to talk about price. Word tracks are constructed and memorized to control your thinking. Your salesperson is trained to try and diffuse your objections about price, then quickly get you to talk about the monthly payment again.

That’s all they want to talk about. Not the sales price, not your trade value. Payments.

That’s the number they want to tweak. Lowering your monthly bill is as easy as kicking your loan maturation date out another year. Changing your payment doesn’t change your car’s price, but it sure can change the total amount you’ll be paying ultimately for the vehicle.

But if the buyer isn’t paying attention, it might even look like the dealership is helping. This tactic can result in a lower payment. It can look easier to “own”. This way, car dealers can look like heroes… if the buyer forgets to think about what the numbers mean, anyway.

Does any of that sound like negotiation to you?

Customers seek to spend in order to own what they purchase. Those looking to approach a situation with ownership in mind approach buying with an alternative mindset. Someone looking to own their car will negotiate and nitpick their deal with the price in mind, not payments. They seek value.

Compare this to a lease, where the car’s depreciation is built into the deal as the basis. This is a consumer in every traditional sense of the word, as the buyer more or less consumes the value of the product and is left with absolutely no ownership.

The goal with a lease is payments, never ownership.

When a car salesperson looks at you, what do you want them to see? A consumer or a customer?

While I chose to focus on car sales here, the model extends much further. End-user ownership is on a decline because payments are so profitable. Why let the consumer own anything when we can rent everything to them for a monthly fee?

The absolute big one these days is streaming media. We rent our television through a staggering amount of on-demand streaming services. At least broadcast television was free and it was perfectly legal to record shows for personal use. At least then you had something. Streaming media is a different beast these days.

But the list keeps going. Software subscriptions. Music and radio memberships. Video games. Product boxes. It’s possible these days to subscribe to a car. I’m not kidding. Even your treadmill will come with a subscription service.

Stop paying any of those monthly fees, and everything you had just goes away, leaving the consumer with nothing but a lighter wallet.

Maybe consumer is just a word. Or maybe this is an intentional shift in business expectations. While the average customer can’t do anything about marketing strategies aimed at them, they can at least approach most situations with the correct mindset.

Consumers are statistics. Customers are people.

- H. Stanley Marcus, Chairman, Neiman Marcus

Be people. A customer. Not a sales figure.

Consumers pay what’s on the sticker without question. Their job is to sit and consume. It’s in their very name. They destroy value and are left with no ownership.

Customers look for deals. Customers negotiate and conduct trade. When you walk into a car dealership, be a customer looking to buy a car and not a consumer being sold a car. Offer $550 cash for that television next time instead of just paying the $600 sticker. The worst the shop can say is ‘no’. Look to buy when it’s feasible and don’t be satisfied with renting.

Negotiate where you can. Approach spending with ownership in mind where possible. Reduce the situations where you’re left at the end of a product chain with nothing to show for your expenditures except a lighter wallet.

Own things. Preserve value.

Don’t always be the one left standing with the bill and the banana.

Programmer by day and a writer by night. Somehow finding the balance in between.

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