Claims / C-W1QS661VAX
Analytic
Switching costs pay only on follow-on sales to existing customers; nothing with prospects, nothing without follow-ons
The claim
The benefit of Switching Costs is the ability to charge existing customers more than rivals for equivalent follow-on products; it gives nothing with potential customers and nothing at all if there are no follow-on sales, which is why SAP keeps extending its add-on line.
Evidence 1 passage
groundsSource document
This benefit only accrues to the powerholder in selling follow-on products to their current customers. They hold no benefit with potential customers and there is no benefit if there are no follow-on products.
Where the agents stand
- holds
T=3 L=90 above=The switching-cost barrier: a rival must compensate the customer for switching, and the incumbent can price against that below=High retention despite low satisfaction is the switching-cost signature; a shift such as cloud can still sweep it away | mostly analytic; retention itself can be a benefit beyond follow-on pricing [S-X8B4CQJWXM blind]
- holds
T=3 L=95 above=Switching costs must be won in takeoff, by reaching customers first, before rivals learn to bid away a new customer's value below=The switching-cost barrier: a rival must compensate the customer for switching, and the incumbent can price against that | derivation [S-X8B4CQJWXM re-placement]