Build a switching cost analysis for your product

Switching Costs That Compound vs. Switching Costs That Poison

There are two kinds of switching costs: those that deepen customer value while making leaving harder (Slack's history, Figma's team files, Shopify's sales history) and those that just punish departure (export restrictions, contractual penalties). The first compounds; the second poisons the brand and eventually fuels switching. Reforge's retention research notes that the highest-retention products invest exclusively in the first category. Marty Cagan's product discovery writing makes the complementary point: stickiness is the consequence of making the product more useful, not the goal itself.

How the Build a switching cost analysis for your product Prompt Works

The prompt maps seven categories of switching costs, scores each on a 0-3 evidence scale, and gates every investment decision through a brand-risk check — the product team only invests in switching costs that rate low on brand risk. The quarter-by-quarter plan forces the three picks to be sequenced with measurable retention impact so investment is accountable.

When to Use It

• Churn is above target and "build better" is not specific enough.
• A board is asking about retention levers beyond product.
• A competitor is actively poaching your customers and you need defensive depth.
• You are a new PM inheriting a product with no retention strategy.
• CS is asking for lock-in features and you need to shape the conversation.

Common Pitfalls

• Confusing lock-in with stickiness. Data export restrictions punish departure; data accumulation rewards loyalty. One is poison, one compounds.
• Deepening contractual switching cost first. Contract terms are the laziest switching cost and do not reduce the underlying churn cause.
• Not measuring brand risk. Every switching cost investment should be scored on whether customers would describe it as useful or predatory.

Sources

• Retention, Engagement & Growth: The Silent Killer — Reforge
• Product Discovery — Silicon Valley Product Group
• The Activation Metric — Reforge
• Radical Candor — Kim Scott