"THIS is what you lose..."
Loss aversion is one of the most powerful tools for reducing churn. This hack demonstrates how Canva prevents users from unsubscribing.
Hi, it’s Andreas, and I’m back with Growth—my newsletter exploring the funnels and growth tactics of today’s top startups.
In this issue of Growth Bites, I’ll share a simple yet highly effective hack from Canva and how it prevents users from unsubscribing.
Let’s dive in.
Are you struggling with churn?
It can be one of the most challenging problems a SaaS startup faces, especially since acquiring a new customer is 5 to 7 times as costly as retaining an existing one.
Fortunately, there are a few levers we can pull in our growth strategy to reduce it.
One example of this is a clever hack from Canva.
The Hack
Let’s assume you have a premium Canva account.
At some point, you decide to unsubscribe from the service.
When you click the unsubscribe button, the following popup appears:
What Canva is using in the red-marked area is a concept called loss aversion - they're highlighting what you’ll lose, both financially and in terms of features.
This is what stopped me (and probably many others) from unsubscribing.
I use Canva from time to time for my newsletter, and I took this screenshot after using it for three weeks. My monthly subscription cost me €12, but in that time, I used content worth €68 - making it well worth the investment.
The Result
With loss aversion, you trigger a deep psychological effect in people → the fear of losing something.
And according to statistics we are roughly 2.5 times more sensitive to losses than we are to gains of similar size.
By using this in your marketing, especially to highlight what users will lose before unsubscribing, you can make them think twice.
I’m pretty sure this helps Canva significantly in reducing churn.
Takeaway
Loss aversion in marketing can take many forms.
Such as:
Amazon’s “ends counter”.
Or these tactics used when you want to book your next holiday.
But to find out where you can use it and what works best for your startup, ask yourself:
What do people lose when they unsubscribe from your service?
OR
What do they miss out on by not subscribing or paying?
Then, place this message at the point in the customer journey where it makes the most impact.
That’s why I love Canvas example. Putting it before unsubscribing is super powerful.
And the more detailed in terms of numbers, or even monetary value you can be, the stronger the effect will be.
Playing with psychology in your growth strategy is powerful - but it can also be shady, so stay on the good side.
That’s it for today. See you next week! 👋🏼
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Loss aversion plays huge role in our hunter-gatherer brains. We are scared losing something. Any companies who can leverage this will win easily!
Solid advice to lead on benefit reminders and retain existing customers at intact profitability levels, rather than jumping straight into discounted deal when someone wants to cancel.