Many emerging e-commerce companies, especially those
focused on business-to-consumer (B2C) e-commerce, are in
an aggressive phase of recruiting new customers in what
analysts have called a “land grab.” These firms devote a
large amount of their resources to advertising and
promotion, and increasingly to outright customer
subsidies. Essential to this strategy is that customers
experience some form of “lock-in” or switching costs to
prevent them from defecting to another provider;
otherwise firms would be unable to recover their initial
investments in acquisition. pdf
