Ask HN: Collect payment info before 30 day trial?

https://news.ycombinator.com/item?id=681952

by ctingom • 17 years ago

32 24 17 years ago

news.ycombinator.com

For our app, we have a free version (no expiration, it is just limited) and we have several paid plans. All of our paid plans include a free 30 day trial.

My question is: Should we collect payment information during the signup process for any of the paid plans? Or should we prompt for payment info after the free trial has ended?

Are there any studies showing one has higher conversion rates?

ramidarigaz• 17 years ago

I tend to avoid demo apps that require me to enter my payment info right off the bat.

I don't know of any studies, but I would guess that many people feel the same.

JimmyL• 17 years ago

Yeah - if I'm asked for payment info during a demo period, I'll probably just move on and find something else. For one, my wallet generally isn't near my computer - but even if it is, I don't like giving out my CC number for something I may use once and then uninstall (because I might forget to cancel the payment plan).

As a startup, one of the things you're selling is great service. So get some contact info and contact them with a few days left and ask if they'd like to re-up.

ctingom3• 17 years ago

To clarify, we will have a free plan which is 100% free for life and includes all of the features of our other plans except the free plan has limits (useful for testing, not as useful if you are a power user).

a-priori• 17 years ago

I have no data to back this up, but I know that I would think twice about signing up for a "free trial" that asked for payment information.

Really, the only way to know for sure is to do an A/B test on it and compare the conversion rates.

patio11• 17 years ago

I'm operating under the assumption that you're using the magazine billing model -- sign up today and you will be billed in 30 days unless you cancel in the interim. This is opposed to the shareware billing model -- sign up today and you will not be billed until you make an affirmative decision to purchase.

The magazine model has a lot of funnel dropout at the first stage (sign up) and fairly little dropout at the second stage (cancellation). The shareware model has less drop out at the first stage (sign up) and hideous dropout at the second stage (decision to pay).

For a service, I'd go for the magazine model. (A lot of non-technical customers assume you're going with the magazine model even if you're not. I get an email on a weekly basis asking to cancel a downloadable free trial.)

One possible exception is if you think your free trial is likely to be in-freaking-sanely sticky for users that start with it. In that case, you might want to make up the difference in conversion rates in sheer volume. Another possible exception is if you get business value from free trial users. For example, if your software has strong network effects, or if you are running an online game and free players are essentially bonus content for playing players, then you might want to encourage as many signups as possible even if you knew a-priori that you would fail to monetize most of them.

Note that if you collect information prior to collecting authorization you've got some headaches to think about beyond the scopes of conversion rates -- information security, whether your payment processor will let you do it, etc.

shizcakes• 17 years ago

Drop the free trial. You've got a free version - if you need to 'convince' people, point them at the free version.

If you would like to do a 'first month free' kind of deal, collect payment/payment information up front, but drop off the cost of one month from the total. Or, allow people to cancel within 30 days for a full refund.

Essentially, I agree with avoiding 'free trials' that want credit card information - I am always afraid that it's going to be a nightmare. But if I know I am signing up to pay, that's a different story. The "being able to cancel within 30 days for a full refund" rings much better to my ears than "30 day free trial with payment details collected up front".

In fact, I hate "trial versions" altogether. I much prefer that either it's free, or it's not.

ctingom3• 17 years ago

Fantastic feedback. I can't believe how much this makes sense. I'm going to take your advice.

tarmac• 17 years ago

I disagree with dropping the free trial just because you have a free version.

It's always a nice gesture to let users see paid plans before any money is exchanged.

There are many reasons for this, but the most important one is letting the user test drive your software with no limitations so they can evaluate if their needs will be fulfilled.

angstrom• 17 years ago

Agree, I would only go so far as reminding them 10 days before the trial ends, At any time during the free trial they should be able to upgrade to subscription, but still get the rest of their free trial. Anything beyond that is nagware at the least and a potential headache concern at the worst which won't win many converts.

Whenever I bump into the financial info hostage model it reminds me of the BS "free 30 day" credit monitoring services or hardship insurance plans the credit card companies always try to trick you into when you activate a credit card. You don't want to be associated with that model. Because the next mental association from there is rape. No, means NO.

rs• 17 years ago

I came up with the same conclusion a while back for my projects, BUT it only makes sense if there isn't a feature differentiation between the Free and Paid products. If the Paid products do come with compelling features then it will make a lot of sense to have a Trail period as it will give potential paying customers an opportunity to "test before buying".

Having said that, asking for payment info upfront is generally not a good idea when you have a trail period. But then again, if you do not pick it up, you might get some abusers who won't cough up the dough after the trail period is over.

pjhyett• 17 years ago

In theory this makes sense, but when we offered 30-day free trials on paid plans at GitHub, our signups spiked and we ended up with over 50% conversion on those accounts. Keep in mind that we have a free plan that provides identical service to the paid accounts except for the ability to create private repositories.

There may have been other factors at work, people could have seen this as the catalyst to finally take the plunge after the site had already been active for nearly a year, but the results were fairly compelling. That said, I'm not sure what this would translate to if we made the trial our default offering. Only one way for us to find out...

Derferman• 17 years ago

FogBugz does it the right way. 45 day free trial with no payment info up front. After those days are up, they ask you for payment info.

dkokelley• 17 years ago

I would offer a cancellation policy within 30 days. The way I see it, there are only two reasons why anyone would get payment information up front.

A: To 'trick' people into paying for something they might have decided against buying. (Bad reason)

B: To limit people who try to take advantage of unlimited free trials - buy using credit card info as an identifier, you could tell who's already had a free trial and who hasn't (to some extent).

If it's for reason A, don't do it. If it's for reason B, do it, but don't charge them until they confirm at the end of 30 days. Send them an email with something like, "We hope you enjoyed your free trial. If you are happy with the service and would like to continue using it, click here and get a promotional 10% off your next 3 months." Anything to ease your customers over the second hurdle of committing to using the service will be good.

kvs2• 17 years ago

I like the cancellation policy idea. Give the best options for both you and your customers. Just make it a push button cancellation.

donniefitz2• 17 years ago

Let them signup without payment information. It promotes easy signup and you are much more likely to get people to try it out. I know from experience.

Loose the free trial because you are giving a free version away which is enough to try it out.

gaford• 17 years ago

Collect the email addresses. You will be able to monetize a certain percentage of your users in unexpected ways. Maybe because they use your free version for years and finally decide to pay.

Don't scare people into denying you the ability to sell to them out of fear or mistrust..

netsp• 17 years ago

Test it yourself. Any studies or advice is likely to tell you 'it depends.' Any advice you get gere will be 'we do this' or 'I like that.'

Can't beat real data that applies.

kvs2• 17 years ago

How competitive is your market? Would your product rank in the,say, top 3? If we know the answers then, I believe, we can have a better discussion.

ctingom3• 17 years ago

Well, our product isn't launched yet. I like to think we'll be in the top 3 but it will take some time.

dkubb• 17 years ago

Regardless of what anyone says here, you have to test several approaches and pick the best performing one.

One company I worked for was famous in it's niche for running tests. We'd run 30/45/60 day free trials, bundle offers, one-time offers, and so on. I mean we ran literally hundreds of split tests every year. The funny thing is that we went a few years before trying a low $1 trial (for a $100+ item) on a whim, and you know what? It out-pulled almost every free trial test we'd ever run. Then we bumped it up to $2.95, and that out-pulled $1 even more.

All this time we'd been running free trials because common sense said that's what would pull best. Not testing this earlier was literally a multi-million dollar mistake.

This taught me a valuable lesson: never make any assumptions about what will or will not work, and test all time.

csomar• 17 years ago

If you are going to enable the free trial so never asks for "Credit Card" information. Most people will consider you SPAM, why asks for my CC while it's free?

jasonkester• 17 years ago

I take this a bit further for S3stat. Not only do we not ask for payment info when you sign up for the trial, we don't allow you to pay at all in the first 7 days, even if you want to.

This essentially forces you to actually use the thing and decide if you want it before buying. Before switching to this mode, we used to get a lot of signup/pay/cancel cycles in the first few days of an account's lifetime. Since it sometimes takes a few days before our product is up and running at full force, it seemed like we were losing a significant percentage of the "impatient" demographic.

Now that we enforce a bit of chillin', immediate cancellations have dropped almost to zero, while our conversion rate has stayed about the same.

DirtyAndy• 17 years ago

I like the free trial option, without ever entering any credit card info. A free trial gets the user used to what they are getting, and you don't have to upsell them later. If you just let them use the free version from the start it is easy for the user to end up thinking "oh these ads on the side aren't too bad" or "oh I don't need to have my company logo at the top" etc etc - so it is more difficult to get them to convert. Once they have used the version with there logo and no ads (or whatever it is you are offering) it is less likely they will accept downgrading.

The other issue with a free trial is it gives you thirty days of your product being out there before you need to get the billing working. Maybe you can launch next week instead of next month.

The other thing I like, that is rare to see (and would probably suit your time tracking app), is a working demo. Allow people to use the app without having to create an account or enter an email etc, just have some dummy data and preferably ensure the data is cleaned after each use (to prevent someone entering objectionable material). Most people that are likely to use your app are smart enough to go and click around and see if it is what they want. Then they can sign up to a free trial and you have a customer who is more likely to turn into a real customer.

Good luck.

smokey_the_bear• 17 years ago

I'm really not a fan of pre-collect payment info trials, but if you do this, make sure you state that it is possible to cancel your account via the website. I will never sign up for one when I suspect they'll make me call to cancel.

Ask HN: Collect payment info before 30 day trial?

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