The lady at Starbucks is always trying to give me a gold card.
She says I’m going to save a lot of money.
But would Starbucks really give out a card that makes them less money?
Of course not. It’s all calculated.
What Starbucks understands is the lock-in effect.
The lock-in effect is a strategy where your customers become dependent on your company because the cost of switching (whether real and/or perceived) is too high. Meaning that once you’re part of the club, there’s a psychological barrier that stops you from going anywhere else – leaving your market free of any competition.
Also published on Medium.