Asking for credit card upfront for free trials. Good or bad?
Basically what the title says. Is it bad or good to ask for credit card information upfront?
I am inclined to say it is a good idea because it is rare that you will get people to convert to paid tier by telling them via email that their trial period has ended.
Let me know what you think. It would be cool if you could back up your opinion with some numbers.
I think it depends on the stage your product is in:
Don't ask for credit card upfront if you didn't achieve product-market fit yet. You'll want to have as much leads/customers as possible to talk to and learn from. Every customer who bounces on your signup form is a learning opportunity lost.
Be careful to not count these signups without credit card as validation. If that is your goal, try to ask for real money.
When you reach product-market fit you it is about two considerations in my opinion:
Ask credit card upfront if you are working on your product alone or with a small team. This way you only get signups who are serious and worth your time. You'll make sure your support is not overloaded with requests from people who might not even convert to paying customers.
Drop the credit card requirement if you have enough capacity to follow up on all leads and have enough manpower to address increased support requests from free trials. In the end you'll reach more potential leads which can lead to an increased amount of revenue if following up and supporting adequately.
Answer: In 2019... No card. Recent data from a test I ran on ~1k trial signups A/B split. 10 years ago - the opposite. 5 years ago - probably still the opposite.
Better answer: Test it yourself. Every case is different. Every product is different.
Best answer: It doesn't matter. Spend 0 more seconds making this decision. Pick whatever is easiest for you to launch and go.
If it's rare that someone will convert after your free trial, then you have bigger problems than whether or not to ask for credit card up front or not. You haven't achieved product market fit.
If you have a product that people really want or need. If you are solving a real problem for them, then you should be taking any opportunity possible to show them that your solution actually works and solves the customer problem. Once you have shown that, they will happily convert, and you will get more sales by not asking for a CC up front.
If you require CC up front in order to get revenue because people simply forget to cancel, then you don't have a real business.
I'm not sure what numbers you would want to see here, as what numbers you will get depend on your level of product market fit.:
Now, there are other very good reasons to require a credit card. It can be a great filter if you actually want to reduce the number of sign ups. For example if you want to be able to provide more personalized service, or you are in a stage that you cannot handle the number of signups you may get without requiring a CC. You may have a service where it would be easy for a customer to sign up and get significant value using multiple "burner" email addresses and multiple trial subscriptions (You'll want to block prepaid cards in this case, too, btw).
Of course, it's good. Just mention everything in T&C & you're done. Conversation rate is too low when you're directly asking them to buy something while it's decent if you're giving them trial at first. Major people prefer to test the services now a days rather than directly buying them. However, be aware to block useless VCCs otherwise people will use fake VCCs such as this https://cardgenerator.io/ offers random VCCs. But you can block such cards & only allow genuine ones with money in them.
This article here [https://stripe.com/atlas/guides/saas-pricing] will give you your answer definitively i.e. from people who really know what they are talking about and can back it up with hard numbers, not just an opinion.
You can just search the article for "credit card", or better yet, read the whole thing. It's well worth the 33 minutes it will take to read. And while you are on the Stripe Atlas site, invest another 20 minutes and read this too [https://stripe.com/atlas/guides/business-of-saas].
Either way, you'll have an authoritative and actionable answer.
Is your product something people need and know ahead of time they'd be willing to pay for it? Then, yes, have them enter a credit card ahead of time, next to some testimonials from past customers.
If your product is sticky, but needs some exposure to get there — i.e. a team chat app, a social app, a planning app, etc. — then definitely offer a generous free trial without asking for a credit card upfront. Once they've bought in and become dependent, they'll upgrade when they need to. For this kind of app, the trick is to give them enough breathing room that they're getting tons of value before they need to make a purchase decision.
Don't ask card details upfront unless your operations are really expensive per user.
People won't give card details to some random sites. Try to build trust from product.
As @Wouter said, it depends on the stage of your product. If you are looking for feedback then don't ask your users to reach their wallet, pull out the card and enter the CC info. Just make it easy for them to sign up quick.
I have 2 SaaS websites, one is brand new and I am not asking for CC upfront. The other one is 2 years old and I ask for CC upfront.
I've noticed sometimes customer don't cancel their subscription during trial period and when they get charged they either come back yelling for refund or file dispute with their bank. In case of refund, you may end up losing 2.9% + .30 cents. Whereas, for dispute you will end up paying $15 dispute fees + the subscription amount.
Good Luck!
On the one hand, it's great for separating the actual potential buyers from the window-shoppers, but it results in a far higher conversion of trial customers.
On the other hand it decreases the chances of onboarding.
I think it depends on your product.
I think it's the best idea we've ever applied 😉. Strongly recommend it.
It simply adds another barrier to the on-boarding process and more than likely will increase user drop-off.
With that being said if you want to be sure, simply a/b test the theory. Send 50% of site traffic to a sign-up page that requires a user to enter their credit card details and the other 50% to one that does not.
You can keep inclining but there are researches saying the opposite: https://www.invespcro.com/blog/saas-customer-acquisition/
As a user, I can say I don't trust service if it asks for a credit card before I try it. I don't know it, why should I share my private data? If I like it I will definitely pay, but if I don't I'm kind of already gave my data and must stay with it. :-( It's ridiculous.
If your service is good and people really need it, you definitely don't have to tell them about trial expiration - they will know on their own.
People are always guarded against website that ask for credit information up front. I think it kinds of dampen your subscription rate.
That said, nomadlist manage to get heathly sign ups even though they for cc info up front.
from what I learned, they added the paywall to ward off spam users. But by then they had a good amount of active users, adding the paying option just lessened the headaches
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