Answer :
A feature of customer loyalty is that c) firms typically develop customer loyalty by increasing switching costs.
Firms generally use various techniques to enhance customer loyalty by making it costly for customers to switch to competitors. Some common methods include:
- Contract-termination costs: Exemplified by cell phone plans where customers face penalties for early termination.
- Loyalty cards: Offered by businesses like coffee chains and airlines, where customers receive rewards (like free products) for continued purchases.
- Special rates within networks: Discounts offered for communicating within the same network, seen in telecom plans, or special deals for family plans.
These strategies help ensure customers remain with a particular brand by increasing the cost or effort required to switch to a competitor, effectively creating customer loyalty.
