Make staying easy and leaving fair. Build habit and low search costs first, and add switching costs only as value the customer keeps.
There are two ways to keep a customer. One makes staying easier than anything else. The other makes leaving harder, and works until the customer notices.
My test for any retention mechanism: would the customer thank you for it if they understood exactly how it works? A saved shade and a one-tap reorder pass. A credit balance that vanishes on cancellation fails.
Chapters 5 to 9 are the habit plan: a first move, a plan, a cue where the product lives, and twelve weeks of spaced help. Habit is the only source of captivity that makes the customer’s life easier with no catch, which is why it comes first.
Chewy is the clearest public example of a business built on removing the search. Its Autoship program reorders on a schedule the customer sets. In fiscal 2025, Autoship customers accounted for $10.5 billion of Chewy’s $12.6 billion in net sales, 83.3%, and their sales grew 11.8% Filed. Read that carefully: the figure counts everything Autoship customers bought, not only their scheduled orders, and those customers were probably Chewy’s keenest to start with. It shows where the revenue sits, not how much Autoship caused. Still, a business whose sales come mostly from customers who never search again is hard to take customers from.
Amazon went further with the Dash Button, launched in March 2015: a physical button in the home that reordered one product with one press. It was about as pure a cut in search costs as a product can offer, and a cue that lived where the product was used. Amazon discontinued it in March 2019, saying automatic reordering, subscriptions and voice ordering had made it unnecessary. Along the way, a German court ruled that the buttons broke consumer law because they didn’t give enough information about the price at the moment of purchase Reported. One-tap reorder should still show the price.
Some switching costs are the byproduct of real value: a skin profile that took ten minutes to build, a fit history, a refill system they already own. Customers accept these because they chose them and would lose something real by leaving. Others are penalties bolted on to stop people leaving. Customers resent those, and they’re right to.
Keurig learned the difference in public. In late 2014 it launched the Keurig 2.0 brewer with technology that rejected pods it hadn’t licensed. Rival pod makers soon offered workarounds, including a clip that let unlicensed pods run Reported. In the quarter to March 28, 2015, the company reported brewer and accessory sales down 23% and pod sales up 7%, and said growth was below expectations “primarily due to the slower than expected transition to the Keurig 2.0 system” Filed. In May 2015 it said it would bring back its reusable My K-Cup filter, which the 2.0 brewers had shut out, as reported by The Washington Post Reported. Keurig’s pods already had habit and search-cost captivity. The lockout added a switching cost that took something away from people who had paid for the machine, and customers treated it as a penalty.
A switching cost the customer built is loyalty. One you imposed is a grievance with a timer on it.
This is one chapter of Used, Not Bought, which is free and readable in full on a single page with no form in front of it.