Page 106 - 100 Great Business Ideas: From Leading Companies Around the World (100 Great Ideas)

success by planning the reusable component of their products from
the start. Where many attempts at vendor lock-in fail is viewing the
reusable component as just an add-on. It isn’t. It is the product, the
benefit for the customer, and the profit for the business.

In practice

• Consider selling the original product for a low, eye-catching

price to stimulate sales of the add-on components.

• Alternatively, consider making the “base product” expensive to

persuade customers they have made an investment in your brand
and deter them from switching to another company. The choice
depends on your product, your market, and your customers.
What would they value most?

• Offer a range of add-ons compatible with the base unit. This

element of choice helps overcome consumers’ fears that they are
“stuck” with something of diminishing utility.

• Be aware that demand for your products will be interrelated—

if demand for one decreases, demand for the partner product
will decline.

• Switching cost is not always real—it can just be imagined by the

customer. It can be enough simply to persuade your customers
that it will be inconvenient or costly to switch to a new vendor.

• Plan your vendor lock-in strategy from the start. Clearly, this

strategy works best for products that need to be regularly
replaced.

100 GREAT BUSINESS IDEAS • 99