Should You Require a Credit Card Upfront for a Free Trial? | Hacker News Reader

Should You Require a Credit Card Upfront for a Free Trial?

saasfoundry.io

24 pointstoumhi46 comments

Individual conversion rate isn't the whole story, either. There are people like me (and I suspect many others here) who will play with just about anything that looks interesting, whether we have an actual long-term interest or not. Asking for a credit card up front will lose most of those people. No big deal, you think? Well, those people also tend to be the ones who tell their friends about your new site, and whose friends trust them to make such recommendations.

I like that they did use real #s in addition to polemics. You're right in that they didn't capture influencers. It would be good to see metrics on that too. I do know that I refuse to try anything requiring a credit card # - I wind up forgetting too often. But my data point is just an anecdote.

That's more of a case for a free tier, then a free trial.

Personally, unless I really, really, really need whatever service you're offering, I close the window if any of the following are requested: 'phone number; credit card; "secure" password; social network logon.

I recently just changed the payment tool I was going to sign up and use because they asked for a "numbers only" password. This is not flimsy, I would surely forget any password I had to create with this restriction.

If your startup is on a competitive market, with no unique service only you provide, I would make it simple, letting the users make their choices.

Add "Full Name" to that list.

You're not getting my damn name unless there's a really good reason for it. I don't want to give you my first and last name to upload some funny cat pictures or whatever.

http://www.zephoria.org/thoughts/archives/2011/08/04/real-na...

http://infotrope.net/2011/07/25/preliminary-results-of-my-su...

We are having this very same debate internally now at https://starthq.com

I'm thinking that individual users should be put on a free trial without the CC being asked up front. However, group plans that will be paid for by IT managers will be CC up front.

The reasoning behind this is that by asking for the CC up front from managers, we will 1) make them value the service more 2) retain more of them as customers.

What do you think?

In most cases it doesn't make sense to artificially lower your signup rates like that, except if your onboarding process is very costly. If that's the case then your focus should be on lowering these costs, or focus on better acquisition (you're spending marketing dollars attracting the wrong crowd), and not on shooting yourself in the foot by adding unnecessary friction.

Putting a CC up front doesn't make your prospects value the service more, it gives them a higher barrier to cross in terms of trust. You need a well-recognized brand to be able to make it work IMO. Some people are just not comfortable giving their credit card if they don't know you.

Also, check the references I quote in the blog post, according to the studies conducted by Totango, requiring a CC upfront results in lower end-to-end conversion rates.

Check also http://www.quora.com/Conversion-Optimization/In-what-scenari... , there are good answers that elaborate on this.

Thanks! Very useful.

FWIW, I measured the very same 0.6% conversion rate for upfront CC on https://www.wisecashhq.com.

I will instead to a test for a week or two, without CC info, but with an in-person onboard when possible (unless overloaded), and most likely share that back on HN.

Thanks for sharing Thibaut :-)

What do you mean by "in-person onboard"? Chat assistance? Welcome call?

I currently offer a "one-hour free cash flow coaching session" via ScreenHero or Skype etc.

What I do in that hour largely depends on the newcomer: sometimes it will be more on the features themselves (when the user is already cash flow proficient), most of the time I underline the benefits that are not necessarily obvious and require "education" (eg: mastering cash flow translates into ability to reduce your work load, make time to build a saas product, reduce pressure, schedule purchases, take holidays, realize that you could work less - or more etc).

I can also finetune depending on the country of the new user, understand their real underlying needs etc.

I've also started a newsletter/blog to "educate" people (I don't like that world too much) https://www.wisecashhq.com/blog and it works decently, because some mention the blog during the coaching session.

So this is what I do so far :-)

I'm working more at "optimizing the funnel" than looking for coverage, because I'm in the learning phase.

It turns out that those "coaching sessions" bring a lot of value not only to the new WiseCash user, but as well for me, in terms of customer development, understanding the needs, and figuring out what I will say on my homepage later.

No - I probably won't get approval for my corporate card to be used for such a purpose (at least not without jumping through several hoops, having your company accounts and credit rating checked* and requiring a zero value invoice etc.) and you're not having my personal one.

I've just had this debate elsewhere over an Atlassian 'free trial'.

*Edit: And if you're a startup or in an early growth phase with no track record your 'off the peg' credit rating is going to look underwhelming, plus it doesn't matter that there's no risk in a zero value credit transaction as corporate rules dictate all potential suppliers go through the Accounts Dept. approval process - and that's set in stone by our quality processes, which are externally audited for compliance with various certified standards.

Thank you for your responses everyone, I think we have a clear consensus: no cards up front.

whenever I see a request to provide credit card details upfront before trying a service, it subconsciously screams to me: "Scam! Stay away!"

I would never give you my cc details in order to try your product. In fact this would put you firmly on my blacklist of sites never to visit again (unless you are some big well-known vendor of something I need).

Update: this has been fixed, so I'm happy now. :-)

I utterly hate, loathe and despise the scrolling and keyboard hijacking on this article. (Yes, I really do feel that strongly about it.)

I pressed Space and what happened? I got taken an entire page down, rather than not quite an entire page.

So I pressed Shift+Space to go back up and what happened? I got taken another page down, rather than back to the top.

So I pressed Ctrl+PageUp to go to the previous tab so that I could report these issues and what happened? I got taken one page up instead.

Scrolling with my laptop's trackpad isn't working smoothly at all, and quite unpleasantly. Ditto with the arrow keys. The whole experience, in fact.

Please remove this behaviour and let browsers do what their users expect.

Hey, sorry about that.

I'm using a wordpress theme that probably does a bit too much of this and I hadn't realized (I just launched the blog a couple of days ago). I've tracked down and removed the scrolling effect already and will look into other unintended hijacking.

Thanks for fixing it. Now it acts as it should and I'm happy once more :-). (It might be worth while passing such feedback as mine on to the author of the theme.)

You're welcome.

Yes, especially considering it's one of the best-selling themes on theme forest :-)

You should also consider the possibility that your potential customer does not have a CC. Here in Germany, that applies to quite a lot of people (sry, I have no numbers).

Even more so across eastern Europe. But then, if you only offer CC payments, there's no point in having a trial for users that can never become paying customers, is there?

Absolutely, but shouldn't the response to that be "I guess we better offer more payment options" instead of "let's ignore all CC-less people"?

Besides, a free trial might even be incentive enough for someone to get a CC just so they can use your app! I know it was for me when I found something I couldn't pay for otherwise.

There's ~1.5 billion credit cards out there. By definition, every startup is going to ignore pretty large segments of the addressable market (e.g. people who only speak languages not familiar to the starting team). Starting with an addressable market of 1.5 billion is not a bad thing.

Payments are complex and can be extremely localized. This is IMHO not a battle for an early-stage startup to fight. Credit cards are as close as there is to a de facto international standard; go with those to start.

Also -- in my experience, people without CCs reach out and ask for alternate arrangements if they want your service. This is an appropriate time to make sure that e.g. companies that require a complex PO process are spending enough to make it worth your time.

Thanks for the comment

> Starting with an addressable market of 1.5 billion is not a bad thing.

(On the other hand, that means ignoring, what, 3 billion adults? But of course you're right, it's unfeasible to cover every available form of payment)

Or, similarly, they don't have a credit card for corporate use.

There's no way I'm going to enter my debit card details for a trial of a product for my employer.

And if we do like the product then the Procurement department will contact you; they don't use credit cards either...

@toumhi Please turn off your inertia scrolling. I am on a Mac and inertia scrolling is already activated, but it is much smarter so that if I stop scrolling but keep my fingers on the trackpad then it doesn't use inertia scrolling. The scrolling on saasfoundry.io however just keeps going. Very annoying.

EDIT: toumhi contacted me by email and has now fixed the issue :)

readability.com

Does not work for that article.

this annoyed me too!

Hey, I sent you an email. Not sure what's wrong here. You just scroll once and go to the bottom of the document then? Maybe some hyperactive css rules?

EDIT: OK, should be fixed now. There was a nicescroll jquery plugin in there, which was providing extra scrolling. Thanks for the heads up!

Thank you toumhi for fixing this :)

And still people ask "but why?", in wonderment, when they hear some of us surf the web with javascript generally disabled...

I think this is a dark pattern that actually works. You sign up for a free trial with a CC where they promise you can cancel anytime. Your plan is to cancel before the trial is over but you forget it and start paying. It happens to me all the time.

Basically came to say this. As an enduser, it "feels" very scummy (I 'know' for a fact you're just doing this in the hopes that I forget and you get to ding me for a month or two, moreso when there's some crap about how you don't 'want' to interrupt my service..), and I usually think twice about any service using this pattern.

Why not just let me use it for the trial period and then interrupt service until payment is received?

It "works" in the sense that you get a couple of months of payments in exchange for the customer thinking you are scummy. If you want to be scummy, it seems like there are more direct ways to get people's money.

What are these more direct ways?

Just scam them directly, is what I mean. Instead of building a product.

Cancelling is often very hard, where you have to sit on the phone on hold for 20 minutes, after you search to find the phone number. Then you have to deal with a high pressure sales pitch to stay, and you have to cancel with 30 days notice before the next billing cycle or even worse, you have to send in a certified letter. This is in the "contract."

Signing up, easy. Canceling, painful.

It works, even when you "pivot" to implementing a completely different product before billing!

How I Made $4000 Selling A Product I Didn't Have

https://news.ycombinator.com/item?id=6514305

First, every site will get a completely different result. Keep in mind that just dropping in a cc requirement into your a sign up process created around frictionless trials will probably fail. To get a person's payment details, you need to do more work upfront. You can't have 2 second landing page->signup for people who have never heard of you before. They won't give you a CC just to find out what you do.

Credit card frost has two big advantages:

1- It's easier to optimize. The conversion process is simpler and more controlled. With a fricitonless trial, improving your process of herding people into a free trial can be like pulling on a string, it gets shorter on the other end. You signed up more unengaged/uninterested people, so your trial->payment rates are lower. Obviously, this is only an advantage if you put a lot of effort into the optimization.

2- It takes advantage of some human psychological tendencies. (a) Once they make the credit card details commitment, they are much more likely to thoroughly try out the app. (2) Entering CC details is like paying for something. They get the positive psychological effect of a purchase. When people buy something they want to justify and reenforce their decision, to themselves and to others. They are yours to lose at this point. If you do a good job on #1, you will have gotten this advantage at a discount, because the friction can be much lower than actually paying. They are yours to lose at this point.

There is no canon here. There are lots of advantages and disadvantages to each strategy that apply in different measures to each case.

Why Free Plans Don’t Work [2010]

https://news.ycombinator.com/item?id=1613852 [114 comments]

A lot of lifestyle entrepreneurs have recommended getting the card for a long time.

What about this? 1 day free trial without credit card, with 29 additional free days when you enter it.

Desk.com had a variety of this (you got a free 30 days no matter cc or not) then could continue to use the free plan if you entered your CC. They had a bunch of a la carte features that they hoped to make easy to upsell to.

It depends on the service; if it can be used for malicious purposes (hosting, emailing spam etc) or it carries a liability then definitively ask for a credit card.

How about doing it in 3 stages: 1. Brief free trial (1-2 days) with no CC required. 2. Next, your typical 30 day free trial, but require a CC. 3. Paid service.

Anecdotal evidence vs Anecdotal evidence. I guess its a matter of picking your preference.

Reply on news.ycombinator.com