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Business Lessons to learn from Nairaland’s recent shut down

Recently, nairaland was down for a few days and the entire Nigerian cyberspace felt the ripple. As is usual for me, the day starts with c...

Recently, nairaland was down for a few days and the entire Nigerian cyberspace felt the ripple. As is usual for me, the day starts with checking up the latest news on a few websites including nairaland. That day, I was so shocked to find that nairaland wasn’t up. After about three days offline, nairaland came back up and even though about 5months data was lost, people carried on using the service seamlessly (a few complaints here and there though).

How switching costs locked us in

Here is the interesting part – having read about the psychology of internet users and knowing that the average internet user is impatient, one would have though a three day absence was enough to blow nairaland to obscurity but NO. That didn’t happen. In fact, people were thankful for what was retrieved.

Over the years, nairaland has been a vital source of relevant “local” information. There is literally nothing you cannot find on nairaland. It is sort of like a Nigerian encyclopedia.

The massive data nairaland has built over the years ensured that its users were kept loyal. I mean where else could you get information about very important country issues. I know a friend complained about missing “His NLNG thread” so many other people have threads that they are ‘connected’ to in some way.

With all this, you and I need nairaland badly. There is no substitute and if in a fit of anger, you decide never to use nairaland again, it would only take you a few days before you retrace your steps.

What is switching cost?

Investopedia defines switching cost as
“The negative costs that a consumer incurs as a result of changing suppliers, brands or products. Although most prevalent switching costs are monetary in nature, there are also psychological, effort- and time-based switching costs”.

Typically, If a business sells you something you can't get elsewhere-at least not easily--then that business has high customer switching costs.

High switching cost examples

Facebook – Even though for year I have been saying facebook is now dry, I still go there to check up on friends’ activities. Why can’t I ignore facebook? That is the most complete database of my friends. Where else would everyone be?

PHCN – Power supply is erratic but I would never hesitate to turn of my generator and use PHCN power when available. Reason? It is way cheaper compared to the alternatives.

How we can use it to our advantage

Switching costs enable customers stay hooked on to your business whether they like it or not. Most times a monopoly enjoys this advantage but other businesses can carefully weave high switching costs into their product/service offerings. So the task here is for you to think of how you can make your clients/customers addicted to you offering.

Other lessons to learn from the shutdown

Backup your data – After the crash, I decided to comprehensively back up my data on both cloud and removable storage media. In this day and age, data is everything.

Communicate with your customers if you are having a service problem – Nairaland could have handled this better by letting us know exactly what was happening during the crisis.

I hope you have learnt one or two things from this post. Please share this post if you enjoyed it.

Thank you!

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