Who is a Customer? – Types of Customers, a Case Study of AirBnB

The dictionary defines the term “customer” as “A person who buys goods or services from a shop or business.” As we can see, customers are the backbones of the success of any business/organization. Often, the term customer is used interchangeably with “consumer,” however, these are two distinct terms – Types of Customers. Consumers are the ones that use or consumer goods and services. A customer becomes a consumer of a product once he/she purchases it, but this might not always be the case. The customer is likely to have bought a certain product for a family member, friend, or their customers.

Few questions that we need to ask ourselves while targeting the right customers are:

1. Who is the customer?
2. What does he/she need?
3. How does my product/service satisfy this need?
4. How to reach out to him/her?
5. What are the emotions that are likely to drive them to buy a product?
6. What is likely to satisfy them and what is likely to cause stress?
7. Who is the decision-maker when it comes to buying?

Success Story of AirBnB

Let us learn more about customers from the success story of Airbnb. It was a concept that CEO and co-founder Brian Chesky and his friends Joe Gebbia and Nathan Blecharczyk accidentally stumbled upon in 2007 when Joe and Brian, who shared an apartment in San Francisco, were struggling to pay their rent. As there was a design conference in the city, all the hotels were booked and those attending the conference were desperately looking for a place to stay. So Joe and Brian bought three air beds for guests to sleep in the living room and decided to offer breakfast to their guests. They designed a website airbedandbreakfast.com and listed their offer, which was accepted by a 35-year-old woman from Boston, a 45-year-old man from Utah, and a 30-year-old Indian man for USD 80 each.

They decided to build on this concept further and today, Airbnb is an online service that helps travelers from all over the world book accommodation easily as per their budget. In addition, it also helps those who want to generate extra income from their extra bedroom or from their homes when they themselves are away on vacation connect to those seeking moderately priced accommodation. Ever since its inception in 2008, the company’s strategy has been to give its customers unique travel experiences and to create a world in which anybody can belong anywhere.

As we can see, to own and run a business of this kind successfully, one needs to continuously engage with one’s customers and/or consumers to understand their needs and show them how one’s product or service can fulfill those needs. Brian has always laid more focus on the needs and wants of his customers as compared to the ideas of his developers. He firmly believes “Build something 100 people love, not something 1 million people kind of like.” He and his team have spent an immense amount of time roaming on the streets and talking to people about what they expect from a service like his.

He collected insights from real people and this is exactly what shaped his business. Today, Airbnb is a multi-billion dollar enterprise that was reported to have listed 1.7 million homes in 2016 for travelers to stay in over 33,000 cities across the world. Today, the company’s valuation stands at USD 1.3 billion according to an article by The Telegraph.

Customers can be broadly classified into four major types as listed below:

B2B

It stands for Business-to-Business, for instance, when a company hires the services of a chartered accountant. In Airbnb’s case, it offers a platform for homeowners or realtors to list their available properties

B2C

It stands for Business-to-Customer, for instance, when a customer buys clothes from a retail store. In Airbnb’s case, it helps travellers find accommodation

C2B

It stands for Customer-to-Business, for instance, when a person sells his personal belongings to a pawn shop. In Airbnb’s case, a homeowner or realtor lists his/her property with dates of availability on the Airbnb website or app

C2C

It stands for Customer-to-Customer, for instance, when a person uses a platform such as OLX to sell his/her personal belongings to another customer. In Airbnb’s case, those listing their properties on the platform as well as those seeking accommodation are both customers of Airbnb, and they connect with each other to carry out a business transaction.

Hence, we can see that the developers of Airbnb created a business model that caters to the needs of all four major categories of customers listed above. This has been the recipe for their success. Through the success story of Airbnb, we can see that that the first most important step is to understand who a customer is. Types of Customers – The remaining steps, which include customer service, customer acquisition, and the like, fall into place in the due course.