Business Strategy
Switching Costs
The costs a customer incurs when changing from one product or supplier to another. Includes financial costs, time, effort, learning curves, and loss of accumulated benefits.
Biological Context
Switching costs parallel the costs organisms pay to change strategies or habitats: learning new foraging techniques, establishing new territories, losing accumulated local knowledge. High switching costs make organisms 'sticky' to current strategies even when alternatives might be better.
Business Application
Switching costs protect existing business relationships. Types include procedural (relearning), financial (contracts, lost loyalty points), and relational (personal connections). High switching costs justify customer acquisition investment.