Customer Lock-in

Customer Lock-In means a customer has no superior alternative to his current product that both provides better performance and overcomes switching costs and pain of change, so the customer can not make an economically rational choice to switch to a competitor

This happens when no competitive product can achieve a Q-PMF score that is greater than the incumbent product Q-PMF score plus a change threshold of additional Delta-V.

Achieving customer lock in is extremely advantageous and thus desirable for a firm as it “enforces” loyalty which eliminates much customer churn and thus increases Life Time Value (LTV) and lowers new Customer Acquisition Costs (CAC) thereby increasing EBITDA.

As we say “Lock-In is In.”

Posted in: Glossary