Economic concept
Switching cost
The time, risk or money involved in changing supplier.
All conceptsWhy do products from brands we trust sometimes get worse?
A trusted name is an asset built from past quality, but the product sold today is produced by current incentives and current operations. If managers can reduce cost before customers detect the change, yesterday's reputation can temporarily protect today's weaker offer. That pattern is possible, not universal: many brand changes improve products, and perceived decline can also reflect nostalgia or a changed recipe preference.
See it at workWhy does a free app often get worse after it becomes dominant?
A free app often subsidizes adoption because users, data and complementary businesses make the network more valuable. After the market tips, the objective can shift from attracting users to monetizing attention, access or business dependence. More ads or friction are not inevitable: a dominant platform still faces regulation, reputation risk, multi-homing and potential technological disruption.
See it at workWhy do companies offer better deals to new customers than loyal ones?
In markets with repeat contracts, firms can discount aggressively to acquire a customer whose future payments have value. Once the customer has learned the service, stored data or accepted automatic renewal, switching requires attention and effort. Regulators have documented this loyalty penalty in several UK financial and telecom markets, but it is not universal and some rules now constrain it.