What are switching costs?

Switching costs are the costs the customer pays when it switches brands. There are high switching costs and low switching costs. For example, something like switching your phone carrier would be considered a high switching cost because you might have to pay out the rest of your contract, you might have to call a customer service agent or go into the store to end the contract, and you have to sign up for a new carrier and that might require going into the store. The time, money, and effort that would go into switching phone carriers means that it has high switching costs.