Based on the location of customers on the loyalty ladder against the supplier's cost-to-serve, explain the four types of customers created: most valuable customer, partner, switcher, and undesirable customer

Question

What will be an ideal response?

Answer 1

Switchers: These customers view the supplier's product as a commodity and are likely to switch suppliers if they are unable to get lower prices. They do not have preference for any specific supplier. Yet, these customers can be very important for suppliers because they demand large volumes.
Undesirable customers: Created when suppliers mismanage switchers.

Partners: Customers that are expensive to serve, but the returns usually justify the effort. These customers typically want turnkey solutions from suppliers because they have consciously chosen not to develop in-house expertise or make investments that would reduce their need for the supplier's value-added services. They typically view the supplier as a value-adding partner and look for a long-term commitment.

Most valuable customers: Are as loyal as partners and significantly more inexpensive to serve than partners. This is as a result of the supplier becoming more efficient at serving these customers and reducing their costs of their cost-to-serve without decreasing the customer benefits.