Lock-in & Switching Costs
Once you depend on a system, a format or a relationship, leaving costs more than staying even when staying is worse; sellers create the dependence cheaply and early, and price it later.
An everyday example
A free integration that becomes the spine of your operations, followed by a 40% renewal increase.
What it can cost you
Terms that look fine today and cannot be refused tomorrow; a counterpart who knows your exit cost better than you do.
Warning signs
- Leaving is unthinkable and that is why the price went up.
- We negotiated the entry and never the exit.
One thing to do
Price your exit before you enter: data portability, contract terms, second sources. Negotiate hardest when switching is still cheap.
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