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It all depends on the cost of switching. If the cost of switching is really high then you can screw over customers all you want and raise prices considerably
by thorwasdfasdf 7y ago
It all depends on the cost of switching. If the cost of switching is really high then you can screw over customers all you want and raise prices considerably before they move away.
However, if the cost of switching is very low, you'll find it's much harder to raise prices. In industries and products where switching costs are low, prices tend to be much much lower anyway, especially if those users are easy to reach.
- yoz-y 7y agoAccording to the article some of the difficulty is self inflicted. For example they were planning to raise the price for some time but then one of their competitor left the consumer space. It would be the best time for them to do the hike but they decided against it because it would be a nasty move.