The impact of switching costs and brand communities on new product adoption: served-market tyranny or friendship with benefits

Abstract

Purpose The purpose of this paper is to investigate the competing effects of brand community participation, which should enhance loyalty to both the brand and to already-owned products, against switching costs, which should make consumers sensitive about the financial costs associated with new products. Design/methodology/approach Using the participation and weekly adoption data from 7,411 members in two brand communities and one product category forum over a six-month period, switching costs were computed for each member using 10 years of product release and pricing data. Findings Consistent with prior research, switching costs had a significant effect on reducing product adoption. Brand community participation also had a significant effect on overcoming switching costs. However, these main effects were qualified by an interaction, such that the most active participants were more likely to buy the new product when switching costs were higher. Originality/value Most importantly, these findings provide unique insights into financial switching costs and demonstrate ways in which brand community participation provides a way to mitigate switching costs for consumers who would most be affected by them.