Good afternoon
Today is our final, fifth post on Moats (MOAT)
MOAT #5 - High switching costs
Sometimes customers stay not because they love the product. They stay because switching is too difficult or too expensive. This is called switching costs.
Examples:
- Microsoft - companies have been using Windows and Office for years.
- Adobe - designers are locked into the Creative Cloud ecosystem.
- Oracle - databases are difficult and expensive to migrate.
When switching is expensive, customers stick around for a long time. This is one of the most stable moats in business.
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