If you’re trying to move customers onto annual plans, one extra question might be all it takes. New research from Wharton marketing professor Marissa Sharif shows that asking customers to either confirm their initial choice or switch to a yearly subscription boosted the likelihood of customers choosing the latter.
The impact is similar to what companies can achieve by defaulting users into annual plans, which typically bring in more revenue and keep customers for longer. Based on experiments in real businesses and lab tests, the paper — published in the Journal of Consumer Research — calls this tactic a “confirmation nudge.”
The study was co-authored by Kellen Mrkva of Baylor University, Shannon Duncan of the University of Alberta, and Stanley Zuo of Ancestry, a genealogy company that helps people trace their family history.
Sharif said: “The biggest practical takeaway is that confirmation nudges are a surprisingly powerful but very lightweight intervention. They can be pretty easy and inexpensive to implement.”
That small change alone can alter what people choose. In lab tests, the share of customers choosing the annual subscription over the monthly plan rose from about a third to nearly half. And in a separate test with a learning app for children, the same nudge boosted the share of customers choosing the annual deal by more than 8 percentage points.
“Confirmation nudges are a surprisingly powerful but very lightweight intervention.”— Marissa Sharif
How Do Confirmation Nudges Work?
The researchers suggest the nudge works by shifting attention. Customers tend to focus on what they’ve already chosen and ignore the alternative. The prompt disrupts that pattern.
“These nudges work best when they help people reconsider an option that is actually good for them,” said Sharif. “In the paper, effects were stronger when the nudged option was desirable and when people were more likely to benefit financially from it. The effect largely disappeared when the nudged option was clearly inferior.”
Even then, there is a trade-off. The researchers say confirmation nudges can push more customers toward the nudged option, while also leading more to abandon the purchase.
For example: In an experiment with a jewelry retailer, asking shoppers to confirm or rethink their purchase led more of them to add a service plan. The share rose from about 19% to nearly 32%.
But slightly more customers also made no purchase at all, and revenue per visitor was $0.64 lower. So when does it actually pay off?
Whether it works comes down to the math. For the learning app company, it did. Customers who chose annual plans generated more than twice as much revenue over time — enough to outweigh the customers who dropped out. In the jeweler’s case, it didn’t. The jewelry itself was more expensive than the service plan, so lost purchases mattered more than the extra add-ons.
“I would recommend that firms consider where to add this nudge such that it minimizes friction, and is less likely to derail the core purchase,” Sharif said. “For example, post-purchase confirmation nudges may be one particularly promising option because they may preserve the choice-shifting upside while reducing abandonment.”
In other words, ask the question after the sale, not before. That still gives customers a chance to switch — without interrupting the purchase. Early evidence suggests this can lift revenue without increasing cancellations, though the paper said it still needs more testing.
More broadly, how firms ask the question matters, too. Prompts that push customers to switch subscriptions — such as “Do you want to upgrade to the premium plan?” — are more effective than those that focus on staying put, like “Do you want to proceed without upgrading?” The reason is simple: They draw attention to the alternative.
“Use confirmation nudges in win-win contexts, where the nudged option is genuinely beneficial for consumers.”— Marissa Sharif
Nudge Customers in Win-Win Situations
However, there are hard limits to what confirmation nudges can achieve. The researchers say the tactic is less effective when the alternative is clearly worse. If one option is better, asking people to reconsider is less likely to change what they pick.
Separately, how people feel about these prompts is more mixed. The researchers asked nearly 2,000 people what they thought of them. They were more likely to say the confirmation nudges were helpful than harmful, but also more likely to see them as manipulative. The prompts did not change the overall customer experience, but made people feel slightly worse about the company.
“The takeaway is not to use them indiscriminately,” said Sharif. “Our recommendation is to use confirmation nudges in win-win contexts, where the nudged option is genuinely beneficial for consumers. That is also where they work best: We find stronger effects when consumers stand to benefit and weaker effects when the nudged option is clearly undesirable.”
