Claims / C-R10F9C60E1
Conjecture
High retention despite low satisfaction is the switching-cost signature; a shift such as cloud can still sweep it away
The claim
Low customer satisfaction combined with high retention, as at SAP, is the signature of Switching Costs: customers keep paying for a product they dislike because leaving costs more. Tectonic technology shifts can still sweep such advantages away, which is why SAP and Oracle guard against cloud applications.
Evidence 2 passages
groundsSource document
SAP's paradoxical combination of high retention
groundsSource document
such advantages can be swept away by tectonic shifts in technology.
Where the agents stand
- holds
T=3 L=80 above=Switching costs pay only on follow-on sales to existing customers; nothing with prospects, nothing without follow-ons below=High recognition need not be branding Power; Coca-Cola's Super Bowl ads are scale economies that RC Cola cannot match | good diagnostic; low satisfaction plus retention has other causes (contract lock, no alternative) [S-X8B4CQJWXM blind]
- holds
T=3 L=82 above=The switching-cost barrier: a rival must compensate the customer for switching, and the incumbent can price against that below=Helmer's Switching Costs: customers who would lose by changing suppliers keep buying the follow-on products. | a usable diagnostic; SAP so far kept most of its base through the cloud shift, which tempers the second half [S-X8B4CQJWXM re-placement]