Trial period for SaaS: requesting a credit card is a short-sighted undertaking

With the development of the domestic SaaS market, questions about how quickly you can begin to start stimulating a customer to buy become more important. And by what methods is this done? Your attention is a translation of an article by Lincoln Murphy. Next - his thoughts on the topic.

I received an e-mail in which they asked me whether I need to request information about a credit card at the beginning of using the trial version, and what is the optimal duration of the trial period.
I decided to write about everything in this article ..

Here is this e-mail:

“Hi, Lincoln, one guy advised me to ask you if you should immediately request a credit card at the beginning of the trial period, instead of the freemium model that I am currently using. As it was said on your site, clients are psychologically inclined NOT to pay with freemium, and this is a disaster.
However, in your articles, you strongly oppose the direct request for a credit card (QC) during the passage of the trial period.
I planned to request a card immediately at the start of a 7-day period. Do you think this is a bad idea? It’s just that article on credit cards has been here for 2 years, and I thought, maybe the market has changed, etc. ”

Here is my answer ...

I’ll talk about the transition from freemium to premium in the next article, but understanding this phenomenon begins with a clear definition for myself of the difference between freemium and the trial period.

Why even offer a trial period?

And yet, why do we first offer a trial period? For our potential customers to appreciate what they will have to pay for ...
... remember, they do not yet know about your product and do not trust your company.

And we know that, especially in the B2B sector, trust plays a crucial role. For example, the belief that the description of the product meets its properties, that you will support your customers, that you will not deceive them, and so on.

Thus, how does requesting a credit card help build confidence in your product? That's right, nothing.

If something has changed over the past few years, it is that people have become LESS gullible, and not vice versa. And even less they want to get a credit card and TRY something. Why? Because they don’t need 100% of the options!

Multiply this by the fact that people are more busy and scattered every day, and requesting a credit card right away (what I call building a QC wall) distracts them, instead of directing them to become your customers.

Distraction + lack of trust = failure

Therefore, I would say that the KK-wall, especially in the B2B sphere, on the contrary, worsens the situation now even more than two years ago when I wrote the previous article on this topic.

Wait ... more - worse.

Now let's talk about the 7-day trial period.
Remember that trial period is a marketing ploy. His only task is to be long enough so that the client has a feeling that he will be able to evaluate the product and get the benefit of the service. Short, time-limited trial periods close all moves to successful interaction with the client.

My heart tells me that 7 days is not enough for your potential customers - although you can test this theory - so such a long trial period will not even make people try your SaaS product, not to mention becoming a customer.

Distraction + lack of trust + super-short trial period = huge failure

It feels like you don’t want to attract people to your SaaS at all.

If I were you, I would concentrate on how to attract as many people as possible, instead of hindering this.

Never underestimate such a business incentive as anger.

To the above advice, I can add that all people have their own views, which are based on their personal experience.
And, of course, you can always find people who share your views / have the same experience, so you can easily fall into the trap of thinking that your views / experience are true. And encourage customers to buy something.

Despite the fact that I really appreciate the experience, I also know that it can "step aside" for various reasons (for example, emotional), so I try to work based on information + maximum understanding of client behavior / psychology.

When I find myself thinking that I am too emotional about something, it is a signal that I need to go back and soberly analyze the information.

And now, what I will say: the data that I saw confirm that the initial request for a credit card leads to the registration of fewer people.
And that simply means that you will have less chance of getting paying customers for the long term. For me, this is a failure.

Contribute The

misconception is that requesting a credit card from potential customers will be something like a “contribution” or “commitment” on their part or something else. But this is not so. KK-wall is nothing but a barrier.

And this is the worst of the barriers: a barrier arising from a lack of understanding of how things work. Emotions predominate over people, for example, anger or frustration, rather than sound calculation (“I will show you free downloads!”)

However, if you do not believe me that requesting QC will not be effective, you need to conduct A / B testing ... only that part of it, where the QC is requested (or not requested!), and you will see what happens.

It’s a little dishonest for a low degree of trust to force customers to register for a trial period and pay immediately (or immediately enter a QC number; there is a slight difference between instant payment and QC introduction, right? The same action required from a client, the same barrier). Building trust is a complex process, so just changing “QC is not required” to “enter a valid QC” will clearly not be effective.

An effective way to reduce the number of registrants.

I can already foresee another counterargument ... of course, the KK-wall may not attract more people, but those that subscribe will be the right customers. They are not some rabble. They are true potential customers who will be faithful. And they won’t fool around.

Well, and those that remain after 30, 60 or 90-day trial periods, as I understand it, rabble. And those who enter QC, and then find themselves buying a product after a trial period, are not rabble (this paragraph, in general, is sarcasm).

Do you see how strange this sounds? It is clear that they did not like your product, so they did not stay and they did not pay you. But you do not see it. And you can’t handle it. So you blame them.

You blame them even after you received their QC ... and you blame them when you do not request a QC.

Stop blaming customers, but rather take a look at your product. Look at you. It will bring much more benefit!

Conversion Magic: Improve your Adaptation Period and Customer Engagement

The reality is this: with a credit card request or without it, exactly what happens after the initial registration is important. This is what makes people go on a paid basis. If you understand this, then you realize that the presence of the KK wall or its absence is far from the main thing.

KK-wall without a proper post-registration process will not have the best effect on your conversion rate. That's why I constantly see SaaS companies with a KK wall, the conversion rate of which is 10-20%. But for those who have high-level post-registration processes (adaptation period, etc.), this level is 85% and higher.

And what happens if your conversion rate is 85% and you remove the KK wall? The ratio will fall? Maybe ... but it's a factor ... but the total number of customers will increase with the speed of light.

But credit cards will help keep customers, right?

So, if KK-walls do not let clients pass, then will they delay the existing ones? Not.
As I just said, I often see 80-90% of SaaS companies with KK wall failing to switch to a paid base. This is terrible and clearly shows that KK - this "contribution to the cause" that you crave so much - is not at all important.

In fact, completely different things make customers stay, for example, impressions, customer involvement in the process, investments (time, resources, data, etc.), and not a credit card request.

And in this situation, if someone says that he put the KK-wall and got a higher conversion rate (remember that I talked about the coefficient and real numbers), then they almost always did something more than just put the KK the wall.

This “bigger” includes an improved adaptation process, and UI, and UX, and CX, and BS, and everything that focuses on improving the well-being of your customers, their success, etc.

I think that companies are more successful when they work in this way: “So, we got their credit card, it's time to get down to business.” And they are feverishly doing everything to delay the client.

The pain of active failures It

really hurts when someone gives you a credit card number, uses your product, and then refuses it until the end of the trial period, because he did not like what he saw.
This is not the same feeling as with a trial period without a credit card, when customers stop using the product and leave ... When they give their QC, they need to actively cancel everything, and it hurts.

And it should be painful ... but it should also be obvious that the mere presence of a credit card does not guarantee that they will become paid customers.

Thus, it is not the KK-wall that attracts customers ... but the seller who made his product quality and took care of those customers who gave their credit cards.

In other words, the key to retaining customers in the first 90 days is to create a quality product and work actively with customers, rather than requesting a credit card.

Why do I care so much for the first 90 days? Because if you immediately request a credit card, then you will have several customers switching to a paid basis, simply because they forgot to unregister. It may even take several billing cycles. Therefore, I do not consider the client as a client until he paid for the first 90 days. It is at this time that potential customers are at risk.

Of course, the context is all about successfully working with clients, so if your client understands the value of the product, then he is less likely to be at risk.

Exceptions to the rules

As you understand, I don't say anything just like that, and I understand that there are exceptions to any rule. For example, email marketing is highly prone to abuse.
Some companies have a $ 1 trial period, while others, such as GetResponse, offer a 30-day trial period without requesting a credit card. How?

They understand that “abuse” shows where the product is “valuable”, so if they can get people into GetResponse during the trial period (install everything, import lists, download widgets, send some test messages, etc.), then when customers want to send more letters, they will pay.

Therefore, even with a high probability of abuse (potential) in email marketing, not a single trial period with a QC wall will help.
An example of a service that publishes press releases, where the benefits are immediately obtained, and they do not request a trial period, I described in this article on LinkedIn.

I provided an example of how to allow a potential client to install everything for free without asking for a credit card, but as soon as he is ready to send messages, it would not hurt to take money from him.

The PRESENT value of the duration of the trial period

Now, with regard to the 7-day period, again, I believe that it may be too short. I don’t know for sure, you probably have to find out for sure. But what else is your job - to encourage customers to switch to a paid basis as quickly as possible, regardless of the length of the trial period. If you have a 30-day trial period, this does not mean that customers cannot switch to a paid basis until 31 days (although this is typical).

Customers think that they have 30 days to evaluate the product, but you should evaluate the time differently: you have 3 days to get them to use the product, and 7 days to make paid users out of them.

You do this through an accelerated adaptation process, quickly enthralling users, forcing them to understand the value of the product as quickly as possible and then offering them to buy the product.

Thus, I helped one SaaS company with a 30-day trial period change the time it took for customers to switch from a paid basis from 42 days to 3. And using creative discounts, I helped them increase the average number of people who tried a trial period by 33%.

I hope you find this useful.