Switching costs are everything a customer must give up to move from your product to another one: money, time, retraining, lost data, and risk. They are the reason customers stay with a product they only rate as adequate. You raise them with integrations, stored history, and long-term contracts.
You find switching costs by asking a customer what would happen on the day they cancel. The answer usually includes work nobody wants to do: exporting data, learning new software, re-training staff, renegotiating a contract, and accepting the risk that the new option is worse.
An example. A restaurant runs your point-of-sale system. Moving to a competitor means new hardware at 2,400 euros and training for 12 staff, two hours each at 18 euros an hour, which is 432 euros. The total is 2,832 euros, plus two slow days during the change. A rival that saves the restaurant 30 euros a month needs 2,832 divided by 30, so about 94 months, before the switch pays for itself. That is nearly eight years, and the restaurant stays.
Founders usually think about this from one side only. They work hard to make signing up easy, then build nothing that makes leaving costly. Integrations, stored history, saved templates, and team accounts all add weight over time, and each one is a normal feature customers want anyway.
There is a limit worth knowing. Switching costs cut both ways: the same friction that keeps your customers also keeps your competitor's customers away from you. If everyone in your market already runs a competing system, your acquisition cost includes paying down their switching cost through migration help, free months, or setup done for them.
High switching costs are no reason to stop improving. Customers who stay because leaving hurts will leave the moment it stops hurting.
