What is switching costs?

Switching costs are everything a customer must spend or endure to move from one product to another: migration effort, retraining, lost data or integrations, contract penalties, and the risk that the new tool disappoints. High switching costs make customers stickier even when a rival offers a better deal.

They cut both ways. Your switching costs protect your revenue and form part of your moat; a competitor’s switching costs are the barrier your sales team must lower — with migration tools, onboarding help, or import features — to win their customers.