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Estd 4.22.2023
Based on our saas pricing book, Price to Scale, requiring a credit card or even charging a nominal fee during a free trial can be an effective way to signal that you’re attracting more serious prospects. Here are the key points:
• Requiring a credit card helps weed out non-serious users. As discussed in our book, companies like Aftership have adopted a trial fee (or require credit card details) because it boosts conversion rates. It does so by ensuring that trial sign-ups represent prospects who are more engaged and willing to invest, even minimally.
• Free trials with no credit card can indeed maximize the sheer number of sign-ups. However, the trade-off is that conversion rates (the percentage of trial users who become paying customers) are historically low, often between 2% to 6%. This means that while you might see more interest on the front end, not all of these users will be serious buyers.
• Ultimately, the decision depends on your target market and overall strategy. If your goal is to ensure that the users entering your trial are already primed to value your product, having a barrier like requiring a credit card can be beneficial. On the other hand, if you’re focused on rapid user acquisition and can nurture leads effectively post-signup, a frictionless sign-up may be preferable.
In summary, our book leans toward using tools that filter for quality—like requiring a credit card—to improve trial conversion rates, while also noting that each approach must be aligned with the company’s broader growth and acquisition goals.