Switching barriers

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Switching barriers or switching costs are terms used in microeconomics, strategic management, and marketing. They may be defined as the disadvantages or expenses consumers feel they experience, along with the economic and psychological costs of switching from one alternative to another. For example, when telephone service providers also offer Internet access as a package deal they are adding value to their service. A barrier to switching is then formed as swapping internet services providers is a time-consuming effort. Switching cost or switching barriers are the expenses or cost that a consumer incurs due to the result of changing brand, suppliers, or products. Although most common switching costs are monetary in nature, there are also psychological, effort-based, and time-based switching costs. There are a range of different switching costs that fall under three main categories: procedural switching barriers, financial switching barriers, and relational switching barriers. Procedural switching barriers refer to the time and resources associated with changing to a new provider; financial switching barriers refer to the loss of financially measurable resources; and relational switching barriers look at the emotional inconvenience from the breaking of bonds and loss of identity.