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Frameworks, core principles and top case studies for SaaS pricing, learnt and refined over 28+ years of SaaS-monetization experience.
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Based on the insights in our SaaS pricing book, Price to Scale, requiring a credit card—or even a small fee like $7—for a trial can improve the quality of trial users even if it might lower overall sign-ups. Here’s a detailed breakdown:
• Direct Answer:
Requiring a credit card (or a nominal fee) can filter out non-serious users. While you may see a decrease in sheer volume, the conversion rates for those who do sign up often improve because these users are already somewhat committed.
• Supporting Details from Price to Scale:
- One example in our book highlighted that a company charged a small fee for their trial, and the likely reason was to drive up conversion rates. The idea is that by adding a minimal friction point, you weed out users who aren’t seriously considering your product.
- Traditional free trial conversion rates can be as low as 2%-6%, which not only means more low-quality sign-ups but also higher overhead in managing them. When a user invests (via a credit card or fee upfront), it signals higher intent.
• Practical Application:
- Evaluate your target audience: If you’re serving enterprise or even small business software, this approach can ensure that you’re focusing on high-value prospects.
- Consider testing: If you’re uncertain, try a split test where one group has a credit-card-required trial and the other does not. Measure both the quantity and quality of leads and conversions.
• Summary Takeaway:
While a credit card requirement can reduce the number of trial sign-ups, the improved conversion quality often makes it worthwhile. It helps ensure that you are engaging users who have a genuine interest in your product, as discussed in Price to Scale.
In summary, lean toward requiring a credit card for trials if your goal is to maximize conversion quality and reduce resource drain on non-serious users.