Tag «switching costs»

First Mover Benefits and Drawbacks in Business

How does being the first product introducer in the market benefit you? Companies gain a competitive advantage when they introduce a new product or service to the market first. Before their competitors can achieve market recognition, first-movers gain loyalty from their customers. Whenever large companies enter a market first, they have an advantage. Amazon did …

Managing Customer Relationships Exercise Answers

Q: Explain why it is more profitable to retain existing customer relationships than to continually try to attract new ones. Research has shown that one loyal customer tends to become more profitable over time. Apart from not having to outlay the initial costs of attracting new customers, there are four factors that create incremental profits …