
Kill your credit card-less free trial. - rfelix2121
http://observationdeck.net/kill-your-credit-card-less-free-trial/
======
arkitaip
This strikes me as dangerous advice that's very business centric instead of
focusing on how customers think and act. Contrary to what every business owner
wants to believe, their business isn't particularly amazing or magical and
customers have no problems abandoning them during evaluations if there's the
slightest conversion obstacle. Not letting customers try out your service
before entering credit card details? Yeah, that's a major obstacle. Better
check out the competitor's product that's easier to use.

~~~
TazeTSchnitzel
Requiring credit card details is a good way to make people distrustful of you.
In my case at least, I am extremely wary if I'm asked for them, because it
always seems that the free trial is not actually free and the site owners want
me to not come back but end up being billed unwittingly.

~~~
Ntrails
I agree wholeheartedly. Often I will auto-cancel subs immediately after sign
up to make sure paying is a conscious choice, but will discover they've
considered this as a possibility. So the 30 day free period is instantly ended
when I cancel the auto billing part way through. That may be a gripe of my
very own, however.

------
jasonkester
_" Some would even sign up, promptly forget that they signed up, then never
use the app again"_

 _"...only 1% of them actually stick around and pay you for your product."_

Those two quotes lead me to believe that you're not doing lifecycle emails.
Would those people still forget after receiving four emails from you over the
course of those 30 days with specific calls-to-action leading them back to the
site? Would only 1% of them convert if you actually sent them an email asking
them to come back to the site and enter their card details?

My experience has been a lot different to the author's. I see almost exactly
25% of my free trial customers converting to paid. And over half of those
enter their card details _on the day I send them an email asking them to_.

So if you're not doing that, I could see you getting the results you were
getting.

That said, it sounds like it would make for an interesting long-term A/B test.
I'll try to get around to doing that, and if I do I'll be sure to post the
results here.

~~~
lucian1900
Not everyone likes spamming their users.

~~~
joewee
This isn't spam, its marketing to people who opted into receiving
communications from you in exchange for a free trial of your service. As long
as you stop shortly after the trial period there is nothing wrong with it in
my opinion.

I actually really enjoy a good series of marketing communications from a
product I'm evaluating to 1) show me how others are using the product 2) point
out a product benefit I might not have notice 3) to remind me to actually use
the product during the trial

~~~
lucian1900
> in exchange for a free trial

So I pay for the trial by being spammed? What kind of logic is that? You're
telling your users "buy this product to get spammed even more!". Are you sure
you want your users' money? They aren't, at this point. Marketing must always
be opt-in.

> I actually really enjoy a good series of marketing

communications from a product I'm evaluating I suspect you are in a small
minority.

~~~
jasonkester
I suspect there are still a few users out there that consider receiving four
emails in exchange for a free month of a $50/month product to be a fair
exchange. Or at least not unfair enough to get this upset about.

Over the years, I imagine I must have sent out something like twenty thousand
of those mails for S3stat alone. Some people do indeed click the Unsubscribe
link on those mails. I've never had anybody complain that they were "spam"
though, since "hey, I hope you're enjoying the service, let me know if you
have any questions!" doesn't really trip too many people's rage filter.

Apologies if you've signed up for our trial and I sent you a thanks message. I
didn't mean anything by it.

~~~
lucian1900
Almost everything I sign up for these days ends up sending me several emails
reminding me that I have done so. Yes, I did sign up. No, I don't want to be
reminded of it all the time.

It is becoming annoying enough that I avoid signing up for things in the first
place, or at least give them an email address I can easily filter.

------
helipad
An interesting side effect of prompting credit card sign-ups is that the
visitor is engaged in getting use out of the service immediately. They're
running against a ticking clock (14 or 30 days) to get whatever service
running.

Those who don't prompt for cards are under no immediate time pressure and
therefore less likely to engage a month down the line when the specific
problem that caused them to search for you in the first place is no longer as
acute.

~~~
rfelix2121
Exactly. This is basically what I was trying to say.

------
TomAnthony
There is a strong argument that many people hear alarm bells when asked for a
credit card for a free trial. Yet, there is a valid case for wanting to
overcome people's inaction, where people just don't bother to sign up (some of
whom would actively enjoy/benefit from the product if you could persuade them
to look deeper).

I wonder if there is a model that goes someway towards addressing both of
these:

1) One month free. No credit card required.

2) Another month free (with more 'credits' or whatever), if during that first
month you supply your credit card details. You will automatically be renewed
if you don't cancel, but are free to do so (and will get reminders).

In this way, people get to try the product without alarm bells. They get
something in return for demonstrating their interest, by way of more free time
and you giving them access to more 'credits' (monitor more servers, look at
more profiles, whatever it is).

This helps overcome their inaction, but avoids the alarm bells. Not sure how
well it'd work but would be interesting to see.

~~~
rfelix2121
That's an interesting idea! I wonder how that would work. It's a bit more
complexity on the front end, but it's intriguing.

------
ramykhuffash
Really interesting. I'd love to see some numbers from a site/product that
actually A/B tested both options.

If I had to use my credit card to get a free trial with Buffer for example, I
would have never tried it (and eventually converted), but I guess it depends
on the product.

~~~
GarethX
There's this report from Totango - [http://www.totango.com/wp-
content/uploads/2012/11/2012-SaaS-...](http://www.totango.com/wp-
content/uploads/2012/11/2012-SaaS-Conversions-Benchmark2.pdf) (PDF)

~~~
MortenK
Really great report! It's based on 100 SaaS companies, and concludes very
differently from this blog post: Requiring credit card for signup results in
50% lower retained users after 90 days.

~~~
senko
I'm not sure the conclusions are very different. Yes, in this report, you get
more customers if you don't ask for credit-card upfront.

But, those 120 signups you get from 1000 trial signups, meaning, for each
signed up customer you need to support over 8 trials (support here means your
time and to a lesser extent, your service's resources).

For the 60 signups in the case where the credit card was asked upfront, there
were 200 free trial signups, ie a bit over 3 trials per customer.

So which is better depends on how much money (or time) you invested in getting
the 10000 interested visitors to site (prior to them signing up), and how much
money (ie. time and other resources) you need to spend to get them to become
paying customers.

~~~
MortenK
That's a good observation. I didn't consider the cost of converting signups to
paying customers though, as in my experience, the cost is little to non (when
talking the type of SaaS products in the report). But in a scenario where
there is significant cost pr acquisition, then the point is very valid.

I think jasonkester below nailed it when stating if you need to interact
individually with customers or in any other way have significant expense
supporting trials, then that's really something to address. Again, at least in
these kinds of products, obviously it does not apply to enterprise etc.

------
beloch
What you're basically saying to prospective new users is this:

"I don't trust you enough to spend bandwidth and server-resources on you
without getting your ID and credit card info. On the other hand, I expect you
trust me with your personal identification and credit card information right
off the bat."

I've had to deal with credit-card fraud in the past, so I simply don't deal
with companies that do this. I suppose the question is whether or not you're
saving enough on costs to offset losing clients who are cautious with their CC
and ID info.

~~~
rfelix2121
When I started off, I wanted every user who came to my site to convert to a
paying user. Over time, I realized that I actually didn't want for every
person who showed up to become a paying user, because I spend more time
dealing with issues that they bring with them than writing new code or adding
features.

After you've been running businesses for awhile, you start to realize that the
goal should be to get a specific type of customer (not every customer is a
good customer for you, some types are a bigger drain on support resources than
others), and the easiest way I've found to get those is to require a credit
card for the trial. That might mean that I have less users overall, but I end
up with the ones that I want.

I'm also not talking about saving on literal costs, necessarily, It's more
about opportunity cost. I could be dealing with a ton of free users, or I
could be dealing with a self-selected group of paid users and work on new
projects. As a developer, a couple of hours here and there could potentially
turn into a new product.

------
arvidjanson
To me, this more or less sounds like "I'm having trouble converting, so let's
focus on the really, really, really interested users". In some occations this
might be the right choice to make (the service you're providing have very low
margins or it's a very complex service, so overhead from support becomes
costly, or time is very limited), but in general it seems like very bad
recommendation.

More likely it's your value proposition that is weak – either your customers
don't understand what (value and/or service) you're providing, or your
onboarding is just not good enough.

If you fail to tell your visitor what you're actually offering (before they
signup) you might end up with a lot of users that sign up, just to learn what
service you're actually providing. This is obviously much more likely if
you're not requiring a credit card at signup. Try to have people understand
WHY they're signing up before they actually do. They should be convinced that
you're the right choice before entering their email.

Second: Your onboarding process is not over when the user has created their
account. Guide your users. Give them examples, feedback and inspiration. Still
having trouble getting started? Email them a week later and ask if you can
help. Keep giving them reasons to come back and eventually convert.

------
kybernetikos
Here's the thing: when there are a lot of services that do something similar,
I sign up to the free trials of lots of them at once to evaluate them. If you
require a credit card, I probably won't include your program in the initial
evaluation.

So yes, if you require a credit card, you're getting fewer people with a
higher likelihood of conversion, but you're also missing out on a lot of
people who are doing comparisons of services. How many of those people you
convert is likely to be a function of how good you are compared to the other
options.

If you are offering something unique or have amazing word of mouth, this
probably won't matter. If on the other hand you think your product is one of
the best solutions to the problem out there, you're probably losing more
customers than you want by demanding credit card details.

In the case of the OP, doing something that on the face of it anyone who
needed that service could hack together a script to do roughly the same thing
within a relatively short period of time, I would have thought that it would
be very important to remove as many barriers to trying the thing as possible
(but yes, there's no need to let the free user have access to checking more
than 2 sites).

~~~
rfelix2121
For website monitoring, a big part of the reason that people buy is trust, not
necessarily ease of signing up. When you're running a commodity business at
scale, you'll also find that more and more users will sign up for free
accounts repeatedly over time instead of paying you money, which is yet
another reason to require credit cards for free trials.

When you're doing most things yourself, like me, the goal is to get a specific
type of customer (not every customer is a good customer for you, some types
are a bigger drain on support resources than others), and the easiest way I've
found to get those is to require a credit card for the trial. That might mean
that I have less users overall, but I end up with the ones that I want.

~~~
kybernetikos
I see. I'd assumed that you were competing primarily on ease of use and
pleasant UX, which if that were the case, you'd want potential customers to
see what you are doing.

If it's actually about trust, it sounds like word of mouth is actually more
important to you. It just seems a shame that you'd be extremely unlikely to
get my business (assuming I were looking for such a service) simply because I
wouldn't be able to evaluate your service without handing over data that I'm
loathe to spread around, particularly for services I might not actually want.

[By the way, another model that might work for website checking as well as
restricting the number of sites is delaying the notifications on the free
account after the first week. Anyone who really wants the service almost
certainly needs the notification immediately. It also gives you another excuse
to email them 'by the way, your premium notification speed add on is expiring,
upgrade to a full account to keep your instant notifications....]

------
belorn
A bit annoying article. The phenomenon that article describes is not about
credit cards, but instead of the psychology behind actively unsubscribing vs
passively unsubscribing at the end of a free trial.

Most people has a tendency to inaction. If you give users two services of
equal worth, but in one you need to unsubscribe to get rid of it and the other
the default action of doing nothing results in unsubscribe, more people are
going to end up paying the first one because they forgot or did not care
enough to go and unsubscribe. Scammers who sends false bills use the same
concept, as they simply hope some people will just automatically pay and not
think or even read what the bill is.

In the end, using a credit card trial where the user need to actively
unsubscribe at the end of the trial will give you more users who dislike your
product or simply isnt using it at all. However, hopefully its enough of a
barrier so people who wish to have a "viral" product can't use it.

~~~
rfelix2121
You can fix this by not automatically charging at the end of a trial, and
sending an email instead to ask if they still want to keep the account, and
closing the account or charging them based on their action at that time. I
didn't say anything about automatically charging anyone necessarily. This is
more about using credit card entry as a barrier to entry that gets you more of
the type of users that you want (ones who are interested in your product and
likely to pay you).

Also, if someone gets charged at the end of a trial because your code is set
to auto-bill them and they forgot, it's not like you can't refund them. Not
doing so would do more harm than good. You only want to bill people who are
actually using your product.

You definitely shouldn't use this as a tactic if you want to have a viral
product. This is specifically about web apps.

------
gnu8
You can make a lot of money if you bill people who are no longer interested in
your product and forgot about it a month ago. Sometimes they'll pay you for
years without realizing that you provide no useful or necessary service of any
kind!

~~~
glennsayers
Maybe I'm just not ruthless enough for business, but this does not seem like a
great way to make money. I'd rather make less through honest customers who
like my product, then screw over those who don't.

------
chrisvineup
It would seem that no one has addressed the idea that maybe the product
doesn't hold enough value to the user to continue after a trial, I really
don't think these sorts of metrics are applicable unless both the business
model and the product are virually idential to his.

There are too many factors to consider, what is the product? being the most
important, how is it sold to me, what is the closing process?

What this post says to me is: we want our users credit card details because
there is a likelyhood they will forget to cancel their trial and we will at
least screw them out of one month subs.

------
joewee
Until now I've always charged a very low trial fee. Say, $1 for the first 30
days of service then auto bill after the 30 day $1 trial.

Never thought it was a good idea to request credit card for free trial, though
I haven't tested it.

Now I am testing a free trial that is action based, so the first 3 actions are
free, but anything beyond that requires a full subscription. The reason is
because the product I'm selling the primary concern potential customers have
is "how would I use this" so we give them time have an a-ha moment but not
enough to get a tremendous amount of use from it.

------
nirvdrum
For those requiring a credit card for trials, how are you tracking
metrics/conversions? Since the conversion happens when the trial ends, which
is an event disconnected from your customer's browsers session, none of the
JavaScript/cookie-based 3rd party software will be able to be capture that
event. Some do have a backend API you can call if you can identify the user
(e.g., KissMetrics & MixPanel both have this), but others do not (e.g.,
AdWords and Optimizely).

~~~
rfelix2121
I'm writing an app specifically to help with this. You can sign up on the
bottom of the original blog post. :)

~~~
nirvdrum
Thanks. I read the article, but completely blocked out that blue box. There's
so much hawking of eBooks and such that I skip over that stuff now.

------
ronaldx
I would be more likely to sign up for full price. "Free trial - just add
credit card" is a massive alarm bell for me.

In my experience, this type of free trial often means you want my credit card
details so that you can make it as awkward as possible for me to cancel and
maybe place dubious charges when I'm not looking.

That experience makes it difficult for me to sign up for a similar free trial.

~~~
rfelix2121
I'm sorry that you feel that way. I definitely understand the feeling of being
burned, but I've never had issues with something like this, as a user myself
of services with a free trial that requires a credit card.

Things like Twitter and Hacker News, where you can broadcast your displeasure
of a company's terrible tactics would make it difficult for a company to keep
signing up new users if people are complaining about it. The only companies
that I see getting away with stuff like this are huge companies who don't care
about their customers anyway, like Tivo.

All of my apps have a prominent link in the user settings panel that lets a
user cancel their account/billing with one click.

------
thejteam
The biggest problem with requiring a credit card with a free trial is that
unscrupulous people also use the same tactic. Rightly or wrongly, the pattern
"requires credit card for trial == scam" is etched into some people's minds.
In order to overcome this, the company would have to be well known and well
respected, at least within their niche.

~~~
rfelix2121
That is definitely true. Personally, I feel fairly secure in putting my credit
card info into web apps for free trials because of protection offered by the
credit card company. If I have problems with charges that I don't want on the
card, I can call them up and reverse them.

I see how some people's knee jerk reaction upon seeing that a credit card is
required for a free trial would be to just close the tab and find a
competitor, though.

------
nfm
Like almost everything, there's no simple answer as to whether requiring a
credit card to start a free trial will be net positive.

This is very dependent on your product, market segment, trial length, pricing,
and many other variables. You need to test this out for yourself.

------
rtpg
Amazon does this neat thing with Prime where if you stop right after a
billing, if you haven't "used" the service they reimburse you fully. Was a
pleasant surprise (Amazon's customer service is world-class)

------
spindritf
Your advertised feed[1] seems to be missing. Returns an empty document.

[1] <http://observationdeck.net/feed/>

~~~
rfelix2121
Sorry about that. It's fixed now. Apparently this happened:
<https://twitter.com/rfelix/status/341487193224798208>

------
jorgenblindheim
Does anyone know any good articles about trial vs. non-trial for premium
subscriptions?

------
lucb1e
Just know that I won't be using your product. And most of my friends have no
credit card either.

Besides not being able to sign up, I also wouldn't want to. From what I heard
about how credit cards work (as opposed to debit cards, which I think is the
right term for the cards that we commonly use here), I'd never sign up for a
free trial and give the developer (and any potential hackers) the permission
to withdraw arbitrary amounts from my credit card. I sign up for so many
things and try out so many demos, it'd be a _major_ security risk. I even
prefer not to give out my real name anywhere, let alone bank account details.

But then again, if you think this system works for you, go ahead and use it.
If it makes you richer, who am I to say you shouldn't.

~~~
relix
Then you're not the target market. If you have no credit card, it's very, very
hard as a global website (i.e. not localized to the Netherlands) to accept
money from you. So if that's the case, then they don't even want you as a
customer, because you have no way of paying them.Giving you a free trial is
then counterproductive.

~~~
vbuterin
It's actually really easy.... ( <http://bitpay.com> )

~~~
relix
No it's not, that just moves the difficulty from merchant to client. Actually
getting bitcoins is not easy, takes a long time, etc. It adds friction,
support overhead, risk, latency, for very little pay-off.

We're talking about subscriptions here, so the customer would have to send
bitcoins every month. He would have to first get bitcoins, then those few days
later actually remember wanting to use the service, send the service the coins
he paid for a few days back, wait half an hour, again. All that, for those
maybe 1 out of 10K leads that would even know what bitcoin is.

