Management Glossary

  Search Results: switching cost
switching cost
The cost that a customer will incur to change from one supplier to another. If, for example, a manufacturer would have to completely retool its factory to use parts from a different supplier, that manufacturer has high switching costs for those parts.

Customers who face high swithcing costs tend to be very loyal. Thus, raising switching costs may be a very profitably business strategy. An example might be a company that develops and gives away a sophisticated ordering system that greatly reduce its customers' administrative costs, but which can only be used to order from the company that developed the software.
Contributed by: ManagerWise Staff

Click on a letter to find terms starting with that letter:
0-9|A|B|C|D|E|F|G|H|I|J|K|L|M|N|O|P|Q|R|S|T|U|V|W|X|Y|Z\

You can also click here to see a list of all of the words in the glossary with links to the definitions.

Or, search the glossary:

Match: any word     all words

Help the Glossary Grow!

Click here
to add a definition. We credit contributors of accepted definitions with, at your option, an e-mail and/or Web link.