Please ask for a credit card to start a free trial
I've done all sorts of business models in a few startups now and by far the most successful and profitable is asking for a card to start a trial
you
- validate user interest and see if your platform is worth paying for
- attract only users genuinely interested in the product
- save money serving requests to free people who will never convert
- dont have to send millions of emails and build hundreds of features to make free users upgrade or put their card in
lets be honest - you're a startup. if you're on indiehackers, you're probably not funded either - so why waste money you don't have and prevent yourself getting from revenue asap?
sure - a huge company with deal sizes in the $200k per year that already has $50 million in revenue and $200 million in funding doesn't ask for a card - and what's that got to do with your small saas business?
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I have 10x the number of trial users than paid users, and I channel those trial users for a couple of things:
All of those things I wouldn't consider asking my paid users. My paid users are paying customers and they deserve high quality software with none of the hassle. My trial users have more time than money.
I think this very much depends on the product and the target market. We recently did a launch and we had a lot of drop-offs between people signing up and people having to put in their card details. I can't say all, but many of them were definitely our target market. I spoke to a few and they said things like they were worried they wouldn't get time to try it and would forget to cancel if they hadn't. I think people just want to go in a have a play. We are going to turn off the card requirement for the lowest package.
We have another product where we're actually going to turn on card requirements as it's more for larger/enterprise customers and I think it's more appropriate to do it for that product. The costs involved to let people try it are also higher so I think that's a factor too.
As a user, I almost never sign up for trials with a credit card. Your product should convert people. As a user, I have no idea if they will remind you about the trial ending or if it is easy to cancel. Did you know for New York Times, you have to actually call or email them to cancel your subscription. Paid trials are only good if the service you are providing actually costs money to deliver (Netflix for example).
Today, even Google asks for credit card upfront if you want to build an app with Google Maps, or other Google enterprise services.
You probably noticed recently that on many websites who previously had Google Maps widgets or apps, a message -this is only for development purposes only- appear instead of the actual map tiles.
This is because they changed their system and if you want to use Google Maps in an app on your website, you have to create a subscription, add your credit card. You dont know exactly when you will be charged or for what amount of traffic. They say that you are given X credits for free for the first 6 months or something. It is very unclear. I added my credit card and after 1 year I didnt paid anything to them, with an app on a website with about 5000-10000 visitors a month.
I think the logic behind this is that they want people to commit to paying before they can use it, despite the fact that most users wont actually pay anything because they do not reach a certain traffic thereshold.
If they were given non commited trials, a lot of people would have put the app on their website and forget about it, ending up in a lot of websites displaying the error message.
If you set up the credit card before, you add the app only if you plan to use it, and if you decide it is not worth you remove it to prevent further charges.
Same logic might apply to any SaaS. Yes, I understand you might lose potential paying customers because of this ( there is no magic formula ). On the other hand, you might lose paying customers because they forget that they have set-up the trial, or they delay the moment of testing, thinking that when they remember again they could ask for an extension. A lot of resources ( especially time ), have to be wasted to convince the users to come back to use the trial and to set up a subscription. If you convince them to set up the subscription beforehand, there will be an urge to really use the trial and test the service, so a decision can be made before the end of the trial.
I think this strategy work best when there is a version of the product that can be used free forever. In this way, the potential paying customer already knows and use the product, he knows it is good and useful, and should have no fear of setting up a subscription to access premium features.
In that case, you're not the ideal / target customer for a brand who asks for card details.
I reviewed two startups today where they complained about low trial conversion rates. I suggested same thing to them. To make users commit to the subscription before they start their trial.
Having a high user base also have great advantages, but in some stages of the startup it is just not working as expected.
If you want to start with a creditcard I highly recommend N26. It is totally free (only have experience with it in Europe) and you get acces in like 3 working days. Used it for my Shopify trial to start dropshipping. Made a few $k and then suspended the account, never paid for anything. Fees are also not too high