We are rethinking our 30-day trial for our B2B (small business) CMS. It is a very niche service and we have about 600 active paying subscribers at this point.
In the past, I have always subscribed to the idea of making the trial as easy as possible to start as that is the conventional wisdom.
However, we get a lot of new trials and a lot of them don't pan out. We have a fairly rigorous routine of calling and getting in touch with these folks, so it does take some of our time every time a new trial signs up.
I'm considering requiring a credit card at trial sign-up and then billing them automatically after 30-days unless they cancel.
Of course this will reduce the number of people that sign up for trials, but I wonder if that is a good thing?
I notice that this is the practice of 37signals. It seems a bit sneaky to me and we have a very small niche and I don't want to be billing people that don't want to be billed, but I do see a much higher conversion rate if we do this.
I suppose an intermediate solution is to optionally allow a customer to enter a credit card at sign-up.
Any thoughts on how to evaluate this beyond just implementing it and seeing how it goes?
We made the switch from having a free and open trial to requiring a credit card and saw the results that you're expecting: Fewer trials, more qualified leads and more conversions. The most striking metric we noticed: While the number of free trial signups was cut in half, the number of conversions stayed the same. The idea that trials should be ultra easy to sign up for only applies in the B2C world. B2B sales require high touch and come with a different set of expectations, one of which is that while a free trial might be offered, it is going to come with restrictions (either in the form of a require CC#, required demonstration, etc).
I would suggest requiring a credit card for any B2B startup. It filters out unqualified leads meaning less time spent chasing leads who have zero intention of purchasing (or, worse, are going to spend lots of your time and then ask if they can pay via check/cash). There isn't any way to get a feel for the effect this will have until you do it and observe the results.
I respectfully disagree with the accepted answer. Whether B2B or B2C, asking for a credit card and automatically charging the user is just flat out wrong.
The statistics given in the answer do not really matter much. For example, I would never give my credit card to your web site even though I had every intention to be a paying customer, so I would never show up in your statistics.
Being pro-customer never hurts in the long run. There are many other ways to avoid contacting uninterested users. For example, you can measure their engagement with your product and only call people that seem to be logging in more than once, twice or whatever.
I have many examples where I quit the sign up process just because of the credit card question and I had every intention to be a customer. Just recently, I was about to sign up for a site that automatically checks grammatical erros in articles. I gave up when they asked for my credit card. It would cost them nothing if they showed me how good they are freely. I was so sold.
On the other hand, you have Fog Creek, which provided me with a free trial of their full product. I was thrilled. I happily provided my credit card number the following week and have been their customer for over three years now. Had they not done that, they would have lost me and my business which is not small by the way.
Above all statistics, not requiring a credit card for sign up sends a powerful message to the user that you are one of the good guys and trust your product.
No conversion rate beats this message.
One argument for requiring credit card for trial sign up is that it will really test how well you've achieved product/market fit. As a marketeer, I've found that everyone is very cooperative and supportive until you ask them to make some kind of monetary commit. That's when the real issues and real testing of your value proposition come out. One of my companies used to do custom engineering work. We always required a contingent PO whereby the customer was obligated to pay provided we delivered to their specifications. This would be your equivalent of a contingent PO.
The method isn't that great if you really don't want to bill people who don't want to be charged. From the consumers point of view it has the possibility to make you look dodgy.
As mentioned before, it does have the benefit of filtering out more leads but is that what you really want?
I suspect you'd be better off leaving it as a free trial and improving your automated follow-up sales process.
If you really want to go down the credit card up front method, I understand (I haven't done it myself, so I cannot say for sure) that charging them a nominal amount like $1 will improve the conversion success performance but you'll need a stronger sales pitch up front.