Your product’s value to the customer is your benefit-to-cost ratio, also known as return on investment (ROI). Whenever you can provide more benefit through your product, or provide your product at lower cost, you make your product more attractive to prospective new customers and to existing customers.
Most product managers are aware of how to increase the benefit their product provides, but few consider the cost component of their value proposition. One of the most significant costs associated with products is the switching cost, also known as adoption cost.
In this article, we’ll dive deep into the definition of switching cost, and the different flavors of switching costs. Then in our next article, we’ll create a framework around switching costs to enable you to drive a stronger value proposition through your product.
Clement Kao has published 60+ product management best practice articles at Product Manager HQ (PMHQ). Furthermore, he provides product management advice within the PMHQ Slack community, which serves 8,000+ members. Clement also curates the weekly PMHQ newsletter, serving 27,000+ subscribers.