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.
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.
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How they do it: The more files customers have saved on their Dropbox’ file hosting space and the more devices are linked to it or the more users the space is shared with, the more effort it is to switch to another service.
Learn more about Dropbox →
How they do it: By providing the most used operating system for personal computers, Microsoft has the advantage to create an environment which prefers their other software solutions such as Internet Explorer or the Office package over competing products. Also, the programs on a Microsoft operating system are ususally not compatible with other operating systems from companies such as Apple or Linux. Hence customers have a barrier to switch to another operating system as they would loose their software programs.
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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.
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How they do it: Once a customer owns a Nintendo console, the only games compatible are the ones licensed by Nintendo itself. This means that Nintendo generates additional revenue with every game sold. It is generally not possible to run 3rd party games on the console which are not certified by Nintendo.
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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.
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.
