Switching barriers

Switching barriers or switching costs are terms used in microeconomics, strategic management, and marketing. They may be defined as the disadvantages or expenses consumers feel they experience, along with the economic and psychological costs of switching from one alternative to another.[1][2] For example, when telephone service providers also offer Internet access as a package deal they are adding value to their service. A barrier to switching is then formed as swapping internet services providers is a time consuming effort.[3]

Switching cost or switching barriers are the expenses or cost that a consumer incurs due to the result of changing brand, suppliers, or products. Although most common switching cost is in monetary in nature, there are also psychological, effort based, and time based switching costs.

There are a range of different switching costs that fall under three main categories: procedural switching barriers, financial switching barriers, and relational switching barriers.[4] Procedural switching barriers refer to the time and resources associated with changing to a new provider; financial switching barriers refer to the loss of financially measurable resources; and relational switching barriers look at the emotional inconvenience from the breaking of bonds and loss of identity.[5]

  1. ^ Jones, Michael A; Mothersbaugh, David L; Beatty, Sharon E (2002-06-01). "Why customers stay: measuring the underlying dimensions of services switching costs and managing their differential strategic outcomes". Journal of Business Research. 55 (6): 441–450. doi:10.1016/S0148-2963(00)00168-5. ISSN 0148-2963.
  2. ^ Jones, Michael A.; Reynolds, Kristy E.; Mothersbaugh, David L.; Beatty, Sharon E. (2007-05-01). "The Positive and Negative Effects of Switching Costs on Relational Outcomes". Journal of Service Research. 9 (4): 335–355. doi:10.1177/1094670507299382. ISSN 1094-6705. S2CID 167831200.
  3. ^ Ranaweera, Chatura; Prabhu, Jaideep (2003-01-01). "The influence of satisfaction, trust and switching barriers on customer retention in a continuous purchasing setting". International Journal of Service Industry Management. 14 (4): 374–395. doi:10.1108/09564230310489231. ISSN 0956-4233.
  4. ^ Blut, Markus; Evanschitzky, Heiner; Backhaus, Christof; Rudd, John; Marck, Michael (2016-01-01). "Securing business-to-business relationships: The impact of switching costs". Industrial Marketing Management. 52: 82–90. doi:10.1016/j.indmarman.2015.05.010. ISSN 0019-8501.
  5. ^ Burnham, Thomas A.; Frels, Judy K.; Mahajan, Vijay (2003-04-01). "Consumer Switching Costs: A Typology, Antecedents, and Consequences". Journal of the Academy of Marketing Science. 31 (2): 109–126. doi:10.1177/0092070302250897. ISSN 0092-0703. S2CID 167501626.