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 try to start encouraging a customer to buy become increasingly important. And what methods is this done? Your attention is a translation of the article, the author of which is Lincoln Murphy. Next - his thoughts on the topic.

I received an e-mail in which I was asked if I should request information about the 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 email:

“Hello, Lincoln, one guy advised me to ask you if I should immediately ask for a credit card at the beginning of the trial period, instead of the freemium model I am using now. As stated on your website, clients are psychologically inclined to NOT pay with freemium, and this is a disaster.
However, in your articles you are strongly opposed to directly requesting a credit card (QC) during the trial period.
I planned to request a card immediately when the 7-day period began. Do you think this is a bad idea? It's just that the article about credit cards has been here for 2 years, and I thought maybe the market has changed, etc. ”
')
Here is my answer ...

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

For what to offer a trial period?

And yet, why do we first offer a trial period? So that our potential customers will appreciate what they will need to pay for ...
... remember, they still do not 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 product description meets its properties, that you will support your customers, that you will not be fooled by them, and so on.

So, how does requesting a credit card help build trust in your product? Right, no way.

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

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 KK-wall) distracts them, instead of directing them to become your clients.

Distraction + lack of trust = failure

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

Wait ... next - worse

Now let's talk about the 7-day trial period.
Remember that the duration of the trial period is a marketing ploy. His only task is to be long enough so that the client has the feeling that he will be able to evaluate the performance of the product and get the benefit from the service. Short, time-limited trial periods close all moves towards 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 - therefore, the length of the trial period will not even make people experience your SaaS product, let alone become customers.

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

There is a feeling that you do not want to attract people to your SaaS at all.

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

Never underestimate a business incentive like 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 they can easily fall into the trap, 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 he can “step aside” for various reasons (for example, emotional), so I try to work based on the information + maximum understanding of the client’s behavior / psychology.

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

And here's what I say: the data that I saw confirm that the initial request for a credit card leads to the registration of fewer people.
And this simply means that you will be less likely to get paying customers for the long term. As for me - it's a failure.

Make a contribution

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

And this is the worst of the barriers: a barrier that has arisen due to a misunderstanding of how things work. Emotions prevail over people, for example, anger or annoyance, not common sense (“I'll show you free downloads!”)

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

It is a little dishonest with a low degree of trust to force customers to register for a trial period and immediately pay (or immediately enter a QC number; there is a small difference between instant payment and QC introduction, right? Gaining trust is a rather complicated process, so simply changing “QC is not required” to “enter a valid QC” will clearly not be effective.

Effective way to reduce the number of registered

I can already foresee another counter-argument ... of course, the KK-wall may not attract more people, but those who sign up will be the right customers. They are not some rabble. They are real potential customers who will be loyal. And they will not fool around.

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

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

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

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

Conversion magic: improve the adaptation period and customer engagement

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

A QC wall without a proper post-registration process will not have the best effect on your conversion level. That is 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? Will the coefficient fall? Perhaps ... but this is 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 customers through, will they delay existing ones? Not.
As I just said, I often see 80-90% of refusals from the transition to a paid basis for SaaS companies with a KK-wall. This is terrible and clearly shows that QC - this “contribution to the cause” that you crave so much - is not at all important.

In fact, customers are forced to stay completely different things, for example, impressions, customer involvement in the process, investment (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 KK the wall

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

I think that companies are more successful when they work in this vein: "So, we got their credit card, it's time to get down to business." And they frantically do everything to delay the client.

Pain from 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 during the trial period without a credit card, when customers no longer use the product and leave ... When they gave 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 KK-wall that attracts customers ... but the seller, who made his product high-quality and took care of those customers who gave their credit card.

In other words, the key to customer retention 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 about the first 90 days? Because if you immediately request a credit card, then you will receive several customer transfers to a paid basis, simply because they forgot to cancel the registration. It may even take several billing cycles. Therefore, I do not consider a client a client until he has paid for the first 90 days. At this particular time, 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 inclined to be in the risk zone.

Exceptions to the rules

As you understand, I am not saying anything just like that and I understand that there are exceptions to any rule. For example, e-mail marketing is highly susceptible to abuse.
Some companies practice a trial period for $ 1, while others, such as GetResponse, offer a 30-day trial period without requesting a credit card. How?

They understand that “abuses” show where the product is “valuable”, so if they can get people to get involved in GetResponse during the trial period (install everything, import lists, load widgets, send several test messages, etc.), then when customers want to send more letters, they will pay.

Therefore, even with a high probability of abuse (potential) in e-mail marketing, no one trial period with a KK-wall will help.
An example of a service that places press releases, where the benefits are immediately derived, and the trial period is not requested, I described in this article on LinkedIn.

I provided an example of how to allow a potential client to install everything for free without requesting 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, as for the 7-day period, again, I believe that it may be too short. I don’t know for sure, you’ll have to figure it out for sure. But what else is your job - to encourage customers to go on 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 have to think about 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 with the help of an accelerated process of adaptation, quickly bringing users to delight, 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 to change the transition time of customers to a paid basis from 42 days to 3. And using creative discounts, I helped them to increase the average number of those who tried the trial period by 33%.

I hope you will find this useful.