High switching cost refers to
A) a service charge that discourages customers from switching service providers.
B) a strategy employed by companies to prevent customers from renegotiating service contracts.
C) an illegal tactic that prevents customers from leaving by charging a prohibitive service termination fee.
D) a strategy employed by companies to lock in customers by making it difficult or expensive to switch to another product.
E) a strategy used by telecom providers to retain customers.

Question

Quizplus · Accepted Answer

High switching cost refers to a strategy employed by companies to lock in customers by making it difficult or expensive to switch to another product. This can be achieved through various means such as requiring long term contracts, charging high termination fees, or using proprietary technology that is incompatible with other products on the market. The goal is to make it so inconvenient for customers to switch that they end up staying with the product or service even if they are not completely satisfied. This is often seen in industries such as telecommunications, where providers offer discounts for bundled services or charge high fees for cancelling contracts early.

High Switching Cost Refers to