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Here is the link for a screenshot of the paragraph sir
https://i.imgur.com/5rcYERC.jpg
It’s the last sentence that I’m finding hard to understand.
“Businesses should try to build in switching costs, that is, real costs or impediments that mean that buyers prefer to stay with existing suppliers”
All help is appreciated.
Thank youA switching cost is a cost that will be borne by the person switching. This acts as a deterrent to switching.
For example, when mobile phones first became available in the UK, if a customer wanted to change contract from one network to another, they had to give up their old phone number and get a new one from the new operator. That was an obvious switching cost because of the inconvenience. Legislation now means that numbers are transferable, so that switching cost has gone.
Switching costs can also be created by providing excellent service as switching supplier means you are risking poorer service (at least until the new supplier learns how to provide excellent service).
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