strategyplaybook.aiSqwyz
Sign in
← All 124 tools
Customer · Diagnose, Choose

Switching cost analysis

Works out how hard it actually is for a customer to leave you, and whether what holds them is value or friction. The difference matters, because friction erodes and value compounds.

The printable canvas and the handoff into Claude Code are part of a paid plan. See what a plan includes. It needs the Claude desktop app on this machine, and your team and the prompt library already installed in that project — we cannot see your disk, so open it there.

Stage
01 Diagnose, 03 Choose
Works at
Business
Maturity
Scaling → Large organisation
Time
Half a day

What it is

An assessment of everything a customer would have to give up, redo or risk in order to move to a competitor. High switching costs explain retention that the proposition alone would not; they also explain the sudden collapses that happen when a competitor finds a way to absorb them.

Financial
Money directly lost by moving: unamortised investment, exit fees, new setup costs, lost discounts.
Procedural
The work of switching — migration, reconfiguration, re-integration, re-training. Often the largest cost and the least visible on either side.
Learning
Familiarity that would have to be rebuilt. Users know your system; they would be slower and worse on a new one for months.
Relational
Personal relationships and accumulated trust with your people. Real, valuable, and dangerously portable if those people leave.
Contractual
Terms, notice periods, minimum volumes. The most brittle kind — they hold customers who have already decided to go, and they poison renewal.
Risk
The perceived chance the alternative is worse. Frequently the largest barrier of all, and reducible by a competitor at almost no cost through a pilot.
The mistake people makeThere is a critical distinction between costs that exist because you are genuinely valuable and costs that exist because leaving is a nuisance. The second kind keeps customers who resent you, produces no pricing power, and disappears the moment somebody offers free migration.
What it’s forYou want to know how easily customers can leave, and what would actually hold them.
What it’s not forYou are in a market with no repeat purchase.

How you run it

  1. Walk through leaving, step by stepWhat would a customer actually have to do to move to a competitor? Every step is a switching cost; list them before valuing them.
  2. Separate the typesFinancial, procedural, relational, learning, contractual and risk. They behave differently and decay at different rates.
  3. Ask whether the cost is value or frictionCosts arising because you are genuinely embedded in their work are healthy. Costs arising from data lock-in or contract traps are resentment accruing quietly.
  4. Test it against actual churnIf switching costs are supposedly high and churn is also high, one of the two numbers is wrong and it is usually the switching costs.
  5. Work out what a competitor would attackAny well-run rival will offer to absorb one of these costs. Which one, and what would that cost them?

The prompt

Two ways to run it

Run this tool in your own Claude

The short prompt starts your partner against the library on your disk. The long one carries everything with it and needs nothing installed.

🔒 Prompt locked

Everything above is free — what this tool is, what it is for, what it is not for, and how to run it as a workshop. Three tool prompts a month are free with an account; beyond three, and for the printable canvas, it is the paid part.

See plans — from £19 a month

Your playbook

It lands in the earliest stage this tool suits. Move it on the Playbook page.

You’ll need

  • Understanding of what a customer would have to do to leave
  • Churn data, and reasons where they exist
  • An honest view of whether they stay willingly

You’ll end up with

  • Switching costs itemised by type and size
  • Whether retention rests on value or on inertia
  • What a competitor would have to remove to take them

Runs well with

Acquisition screen and synergy thesisAI opportunity mapAI risk classification and governanceAnalysis plan