Switching Blog

Even if you don’t know what switching costs (or switching barriers) are, your business might already have some in place. Switching costs are tangible reasons (both positive or negative) why customers should stick with your business. The more competitive the industry, the more important it is to have switching costs.

Traditionally, switching costs have been about punishing your customers for switching to a competitor, but right now we want to focus on positive switching costs.


The simplest example of establishing positive switching costs is by giving additional value to your customers. If you promise to include a limited time offer for bonus articles or guides, customers have a reason to stay with you. Unsubscribing from your product or service would mean an end to bonus content. Since everyone loves free stuff, it goes without saying that this improves customer relations and customer satisfaction as well.

However, just because it is free doesn’t mean you can do a lousy job of it. It is important to really put effort into your bonus content. Many people have the view that “bonus” material is all fluff and has no real value. Prove them wrong.

One great way to do this is to implement a membership program. Reward people for signing up! Give them a discount on their next purchase, or some bonus content. Make them feel special for being a part of your business! If customers can see tangible benefits for signing up with you, they will choose you over your competitors.

Tulalip Resort Casino is a good example of a strong membership program. If your account accumulates 2000 points, the member can automatically get $20 cash back, no strings attached. Just by signing up, you get 1000 points automatically, and if you visit on the month of your birthday, you also get 1000 points. Otherwise, points can be accumulated by gambling in the casino. Best of all, the card is free and gives 10% off all the restaurants in the casino. Tulalip has created a strong incentive for regular casino goers to become a member, use the casino more frequently, eat at their restaurants, and even return on their birthdays.

As thanks for being such great followers of our blog (see what we did there?), we’ve provided a handy checklist to make sure your switching costs are well established:

  • What exclusive benefits are my customers getting that they cannot get from my competitors?
  • Can I add more value to my blog posts and mailing list emails? Are they worth reading or are they just glorified ads for your own products and services?
  • Do the members of my website get any real benefit at all? If they are, are those benefits readily communicated to non-members to improve conversion?
  • Have I looked into reasons why my business has lost customers in the past? This may provide some insights into what areas you can improve on.

Don’t just write content because “everyone else is doing it.” Find out what your audience values and give it to them… before they find it somewhere else.