How to manage trial subscriptions?
I wanted the community's opinion on whether to manage the subscription ourselves or let the payment provider manage it.
I've integrated Paddle, and it allows for a trial subscription. The only concern is that potential customers might feel uncomfortable adding their credit card details while signing up.
On the other hand, it would make things easier regarding overhead; since they would be managing it, we won't need to add checks or create a job for it. Instead, we can wait for the webhook event and manage accordingly.
What is your opinion on the best approach to go about this?
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Hey Muneeb, great discussion — saw you've integrated Paddle for subscriptions. Quick question: when a subscriber cancels, do you have any way to intercept it before it goes through? Like a pause offer or discount popup? Curious how you handle churn.
That's not a valid concern IMO.
The only customers who will be "uncomfortable" adding their credit card info are freeloaders and people who are way too early in the purchase journey a.k.a. people you don't want anyway.
A trial to your product is valuable -- so treat it as such.
They shouldn't get that privilege unless they show some form of commitment.
Even if they put down a card, they can still cancel anytime.
Plus it's the standard way of doing things, e.g. Amazon Prime, Netflix, Hulu, etc. all do it this way.
I've written before on the whole "credit card upfront vs. no credit card upfront" debate before here.
Hey @simplisticallysimple,
Just went through your post, thank you for sharing!
Yes, going with this hybrid approach now, as you've mentioned in your post.
For my product, I offer a very limited experience for user's who aren't paying (and haven't provided a credit card). Basically, they can get a taste of the product and see how it works, but if they want to accomplish any real work, they need to start a paid subscription.
I use Stripe Billing for the paid subscriptions (so, similar to Paddle). I only call out to Stripe's API when the user "upgrades". Before then, the user just exists in my database.
I've experimented before with having a free trial through Stripe. The user enters their credit card, and receives 7 days of free upgraded access before the rebilling started. So, the user would go through three states: non-upgraded (limited experience), upgraded (free trial), upgraded (paying). Too many users canceled during the free trial, so I dropped it.
That's my experience for my B2C product.
Wouldn't that backfire if those non-paying users then go on to badmouth your product, based on that "very limited experience" of theirs?
I feel it's better if they either get the full experience (with credit card down), or they don't get any experience at all.
Thank you for sharing your experience!
If you don't mind sharing how many of the "limited experience" users actually converted into either "free trial" or "paying" users?
Do you think it would have been better if the limited users had full access (trial) and then upgraded themselves to paying?
My conversion rate from users who sign up (enter an email address) to upgrade (enter a credit card) is about 5%.
My guess is that giving free users more functionality will lead to fewer converting into paying customers. Especially users who only imagine themselves using the tool once: why would they pay if they got all the functionality they need for free?
Random idea: for your product, is the output a video? Maybe you could give users full access without a credit card, but if they want to actually save the final video (embed it?) they need to pay.
You could even allow them to save/embed the final video without paying, but deface it with some sort of intrusive watermark. That way, they can see that it works end-to-end, but they will pay before putting it into production.
I HADN'T THOUGHT ABOUT IT THIS WAY!
That is a really smart suggestion!
If we allow them to publish the video with the watermark they would be able indirectly advertising our product on their own websites ... haha this is genius! :D
You are right about giving free users more functionality would result in fewer conversions. The thing is in the market our product is in, every tool is providing a free account but the functionality is extremely limited.
I am personally against giving away free usage for the platform but I think eventually we would have to go for it as well.
If you go with a payment provider like Paddle to manage the trial subscriptions, it'll definitely make things easier on your end as they'll handle the credit card details and you can simply wait for the webhook event. Nothing wrong with that kind of UX for end users.
Yes you are absolutely right, was a bit hessitant at first but reading all of the comments and cases it has started to make more and more sense!
First time hacker - so just my opinion here.
Adding a credit card is such a huge friction point. I'm hoping to also use the free trial period as a period of feedback, given every customer is so valuable to me, I'd like to reduce friction as much as possible.
I'm going the route of no card up front, but with a hybrid approach of a self-managed trial period, and then passing off to my payment provider for the rest. This could also be an option for you. Best of both worlds in my mind :)
I was of the same opinion that this would be a deal breaker, but the comments here have convinced me towards a more tactical approach in handling this. So yes the hybrid approach would be better!
It sounds like you are asking a business question, disguised as a tech question.
There are many pros & cons to requiring a Credit Card to start a free trial. You should be looking at the trial conversion rate, landing page conversion rate, etc... Use those metrics to determine if requiring a card upfront makes sense for your business.
Whatever the tech requirements are should be an afterthought. If possible I'd make it easy to switch between both flows so you can AB test each scenario.
Thank you for answering both aspects of the question! :D
I hadn't considered this initially, and you are right based on these metrics we would be better able to understand and make a much wiser decision.
I will take your advice and make it so that we can easily switch between these two cases.
I will reach out to you soon with my findings :)
I handle trials on my backend, and create the stripe customer when they actually pay for the first time
Do you think it leads to an overhead in managing all user states?