Lock-in 27#
Customers are locked into a vendor's world of products and services. Using another vendor is impossible without incurring substantial switching costs, and thus protecting the company from losing customers. This lock-in is either generated by technological mechanisms or substantial interdependencies of products or services.
Examples: Iconic Cases
How they do it: Lego parts allow individual recombination of the parts. However this recombination is only possible with other official Lego parts and no other toys. This leads to a lock-in for customers, as the size of an existing Lego collection determines also the value of new Lego products, as the recombination possibilities are increasing.
Learn more about Lego →
How they do it: Gillette pioneered the system of single-use razorblades as consumables. By being the only manufacturer of razor blades compatible with its razors, customers have no choice but to buy Gilette’s razorblades once they own the razor.
Learn more about Gillette →
How they do it: Through their Google Playstore, the company offers both content and apps for its customers. However, these can only be used on the respective environments and not be transferred to other environments. Hence, once the customer is used to the service and has purchased a lot of content or apps, the switching costs are very high.
Learn more about Google →
How they do it: In the beginning customers set up their initial cloud computing structure on AWS by using the free ”credits”. With an increased use of the product, the switching cost to a different solution increase as well.
Learn more about Amazon Web Services →
How they do it: LinkedIn has several mechanisms in place to keep the communication and exchange between users on their platform. One example is that it is not possible to send email adresses in initial contact requests for free users. In addition, the platform’s value to the individual user grows with its network, increasing the barrier to switch to another network.
Learn more about LinkedIn →
Below, the top industries for the pattern "Lock-in" are displayed, in order to get insights into how this pattern is applied across different industries. We've collected data from 5 firms using this pattern.
Top Industries
18% of firms using pattern
14% of firms using pattern
14% of firms using pattern
All Industries
Below, the pattern "Lock-in" is analyzed based on co-occurrence, in order to get insights into how this business model pattern is applied in combination with other patterns within the firms we studied.
Top Co-Occurrences
8 pattern co-occurrences
6 pattern co-occurrences
6 pattern co-occurrences
