To minimize the threat of substitute products or services, some businesses will create switching costs. What is a switching cost?
A) The price of the product or service is so high that a customer cannot afford to purchase another
B) Once you leave the first business for a competitor, you lose your ability to switch back to the first business
C) A non-refundable fine levied against the customer for switching to a competitor
D) Costs that make customers reluctant to switch to another project or service supplier

Question

Quizplus · Accepted Answer

Switching costs are costs that make it difficult or unattractive for customers to switch to another product or service supplier. This can include things like the time and effort it takes to learn how to use a new product or service, the cost of switching to a different provider, or the risk of losing access to important features or data. By creating these costs, businesses can reduce the threat of substitute products or services, and make it more likely that customers will continue to use their offerings. Options A, B, and C do not accurately reflect the concept of switching costs.

To Minimize the Threat of Substitute Products or Services, Some