A Conceptual Model for Customer Lock-in Effect in Electronic Business

In today´s world of e-commerce, it is evident for many businesses that the value of an existing customer equals the total value of several potential ones. Accordingly, current customer retention is a critical action for staying competitive in market. By presenting a conceptual model, this study demonstrates barriers which prevent current customers from switching seller and consequently lock them in. An e-business (Pay line) as a case study was analyzed. This business which is an e-payment system was studied in order to identify its strategies for locking customers in. As a final result of this research, monetary, temporal, habitual, emotional and legal barriers are identified as the main five switching barriers. Researches show that creating emotional lock-in effect has a higher durability compared to the rest of barriers. Customer satisfaction, trust-building and loyalty programs are instances of customer orientation which gets current customers locked in and ultimately leads to business sustainability.