A new study shows psychological closure can increase SaaS retention rates. Here's how.

Several days ago, I saw an an article on the Harvard Business Review from a few psychology researchers.

The study: Researchers asked nearly 2,000 U.S. participants to choose between paying more for a service now or paying a bit less in the future.

The results: Almost 86% of participants preferred to pay more upfront for at least one option.

This isn't just an interesting fact about human psychology. It also has implications that you can use to convert more paying users.

I'll explain.

Mental relief > financial relief

When we complete a goal (like paying off a mortgage), we experience mental relief. In many cases, this mental relief outweighs the potential financial benefits (such as paying a mortgage later and investing the money instead).

The reason: Research shows that unresolved goals create a mental burden.

As a result, people often choose to pay higher costs sooner and receive smaller benefits earlier if it helps them feel a sense of closure.

Boost SaaS conversion rates using this principle

Boost conversion rates: If you understand your users' current uncompleted goals, you can use them as a powerful motivator.

For example, say you have a home renovation SaaS. Through user research, you identify that people use your software around the completion of their home renovation project.

instead of selling on features and price, you could tell users that this SaaS will help them finish "the last project in your home renovation."

People are impatient the closer they get to finishing something: Researchers found that:

• While waiting for a bus to arrive, commuters at the bus stop felt more impatient when the bus was closer to arriving.

• U.S. voters became more impatient closer to the conclusion of the general election.

Waiting becomes more uncomfortable the closer you get to finishing something. So, ask yourself: In your users' journey, what goals are they on the verge of completing? Then pitch your product as the means to complete that goal sooner.

Increase onboarding rates with psychological closure

Here are a few examples to get you inspired:

Project Management SaaS

If you're building a project management SaaS, many users are likely juggling multiple tasks. To use this closure principle, highlight how your software can help them quickly finish their tasks.

For example, you could introduce a feature that reminds users of their "almost completed" tasks with a message like, "You’re just two steps away from finishing your project — let us help you wrap it up!"

Or reframe tasks they've already done as a way to "almost complete" your main onboarding process.

Email Marketing SaaS

You could have a message like: "Your campaign is almost ready to launch—let our templates and automation take you across the finish line!" Highlight places where people are closer to finishing and let that be your launchpad to them completing ever bigger goals.

CRM SaaS

The focus here can be on helping users manage and close deals faster.

You could write something like: "You’re one step away from closing the deal — our advanced follow-up automation can help you get there quicker."

Again, focus on actions people already took and reframe those actions as something that brought them "almost close" to finishing an onboarding sequence.

Hope you found this helpful!