Subscription-based business models rely on passive renewal. However, a growing phenomenon known as “subscription fatigue” leads consumers to cancel services they no longer value. This paper tests whether a simple decoy nudge—presenting the user’s current subscription price alongside two higher, less valuable alternatives at the cancellation screen—affects retention. Across three pre-registered experiments (total N = 2,104), participants using a mock streaming platform were randomized to a control (standard cancellation: “Cancel Subscription”) or treatment (“Compare Plans” decoy). Contrary to the “attraction effect” hypothesis, the decoy did not anchor users to their current plan. Instead, it increased cancellation rates by 31 percentage points (95% CI [27, 35]), driven by “comparison-induced regret”—users inferred they were overpaying relative to hypothetical value. A fourth field study with a music subscription service (N = 8,943 real users) replicated the effect. Qualitative responses showed users disliked feeling “manipulated by comparison.”
Research Notes:
Methodology: Randomized controlled trials (lab and online); field experiment (A/B testing); thematic analysis of open-ended responses.
Key Finding: A choice architecture designed to retain customers backfired; transparency may be more effective than decoys.
Practical Implication: Subscription services should avoid presenting higher-priced anchors at cancellation to prevent unintended churn.
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