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What is Making your Customer to Switch Your Brand? Must Read

All brands are facing ‘hyper-competition’ and they are all focused on getting ‘customers’. No one is putting effort into ‘retaining customers’.

What is Making your Customer to Switch Your Brand? Must Read

Tuesday December 24, 2019,

6 min Read

Are your customers switching your brand?

Yes! This is the harsh and real answer to this question. It does not matter if you’re an Small Business or a big brand, customers are choosing your competition over you. In my circle of acquaintances itself, people are switching brands all the time. 

Consider below situations:

My friend Abhishek was a dedicated, Samsung user. He switched to One Plus recently. 

Last time Vishal did his entire shopping on Flipkart. Recently he did that on Amazon. 

The same phenomenon has been observed in the B2B world as well.

Allen Solly recently changed its OEM from Company A to Company B.

Honda Activa now uses new OEM for making its engine parts. 

Retailer A was previously selling only Lays but now he is selling only Too Yumm.

Abhishek used to eat McDonalds but now he has switched to Burger King.

Such changes can be observed everywhere. The reason for customers switching their service providers is that there is no or very low cost to making a switch. They don't even give 2nd though and they switch their vendor or service provider.

All brands are facing ‘hyper-competition’ and they are all focused on getting ‘customers’. No one is putting effort into ‘retaining customers’. Loyalty is no more appreciated because it is no longer quantified. The time has come where businesses should introspect and review their strategies. It should be more focused towards customer retention along with attracting new customers. When you’re getting new customers, you’re investing time and effort to bring them to your store. When a customer is loyal to you, it means the customer has invested in you.The time has come that we look at customer retention with a fresh set of eyes. Let’s ensure that switching from your brands is not so easy.

It should cost your customers high if they switch your brand or company.


Let me start explaining you with couple of example:


There was time, about a decade ago, if you changed your cell phone operator you also had to change your cell phone number. This is a good example of switching cost. If your cell phone number changed you had to inform everyone about your new number. Vital contacts could be lost. This was very risky. Hence, lot of people avoided changing cell phone service providers because the cost of switching is very high.


I have often observed that people don’t change their doctor. Changing a doctor means sharing your entire medical history again, doing all the examination again which will again cost you and after doing this also you’re not sure if you can trust the new doctor. Thus, discomfort and trust are two high a cost to pay for switching doctors.

What is ‘switching cost’?

Switching cost is the costs that is borne by the customer when they change from 1 brand to other brand, 1 supplier to other supplier, 1 service provider to other service provider. Majorly switching cost is in the form of money but it also includes psychological, effort-based, and time-based factors.

Lower the switching cost higher the chances that customer will switch the brand


Higher the switching cost lower the chances of customer switching the brand

Switching costs can be broadly divided into two types, tangible switching cost and intangible switching costs.

Tangible switching costs

Tangible means something can be touched or measured. Thus, tangible switching costs are actual physical problems caused by switching brands.

Here are a few tangible switching costs:

Loss of money:

Example: If you switch accounts from one bank to another you might incur closure costs. 

Loss of convenience

Changing your regular grocery store could mean having to travel longer to get your daily supplies.

Added Costs

Changing your internet service provider means added installation costs

and many more

Intangible Switching Cost

Intangible switching costs are more psychological in nature.

Here are a few intangible switching costs:

Learning costs or Effort Cost

If you change your operating system, then you will have to learn to adapt to the new user interface. Many people cannot adjust to new systems. Hence, they keep using their old one.

Emotional Cost

Sense of prestige is associated with the brand Raymonds. Switching from Raymonds to any other brand might cause anguish to their loyal users.


Changing a brand you’re familiar with for new one can be risky. The best example of this switching your account from a large nationalized bank to a smaller private one for higher returns. 


The time taken for choosing a new brand or company and building a relationship with them is also a very strong deterrent. This is often true for cable services. 


When it comes to financial and medical services trust is a very strong component. Working with a new brand can be stressful as there is a lot of anxiety in the customer till the brand proves it is trustworthy.

Build up your switching cost

To retain a customer is to retain your market share. Hence, it is very important for you to add a switching cost to your product or service. These costs are very effective in ensuring your customer’s loyalty. Without an effective switching cost, it is impossible in current times to hold a customer’s loyalty or your current market share. The brands that will build a loyal base will survive to see the future. Make sure your brand is one of them.

Some of the things you can do to retain customers

Keep in touch with your customer

The best way to retain a customer is to interact with them. The more you understand the customer’s needs the better you can serve them. 

Subtly remind them of the switching cost

Every time you feel that your competitors are trying to reach out to your customer remind them of the switching cost. Make sure that they are aware of all the hassles they will have to go through to change your brand or services. Always remind them of the trust they share with you. 

Customize to keep your customers

There is nothing sweeter than exclusivity. Keep customizing your product and services to customers needs. This ensures that your customers feel that they share something unique with you.

Keep an eye on the competition

Adjust your pricing policy as per the competition in the market. High-cost of products and services is the biggest reason for switching services. 

Keep your customer informed

Every time you upgrade your product or services, make sure your customer knows and reaps the benefits of these upgrades. Keep your customer very well informed about your brand and your products. Highlight your strengths and tell them why you’re better. 

Execute your loyalty program

Make sure you have a strong loyalty program and ensure that you run it. Loyalty programs are a great way to get your customer invested in you and adding up those switching costs. A great example of this is shopping points which keep attracting a customer back to the store.