Out of the trap: Conversion funnel business model, customer switching costs, and industry profitability
研究发现，高顾客转换成本下企业采用转化漏斗商业模式会导致行业价格战和利润下降；而降低转换成本反而可能提高行业价格和盈利能力，基于全球电信运营商数据验证了这一反直觉结论。
Abstract Research Summary Across many industries, firms employ a conversion funnel business model to attract customers with basic and affordable products, generate lock‐in, and then sell them more advanced and expensive products. We argue that this business model, coupled with high customer switching costs, results in a market outcome characterized by aggressive pricing and reduced profits. A sudden reduction in customer switching costs disrupts the conversion funnel and can eventually increase industrywide prices and profitability, an outcome that contradicts conventional wisdom in strategy research. We develop a stylized model to formalize our ideas and provide supportive evidence using a difference‐in‐differences methodology with staggered treatment for a large, global sample of mobile telecommunications operators. Managerial Summary Industry changes that lower customer frictions can surprisingly be beneficial for companies. Building on the telecommunications industry, we document how a reduction in customer switching costs following mobile number portability increases the profitability of mobile operators. We explain this finding based on a change in companies' business model. When switching costs are high, companies adopt a funnel business model designed to convert customers from basic to advanced products. While advantageous for a single company, when strategic interactions are accounted for, the diffusion of this business model has a depressive effect on average market prices and profitability. A reduction in customer switching costs breaks the funnel and decouples product pricing decisions that, counterintuitively, can lead to higher industrywide prices and greater profitability.