I also tried every sort of SaaS signup process (CC-first, every type of free-trial, etc) with my app (https://carelogger.com).
I actually agree CC upfront is better overall than not. Depending on the audience of course (some business users don't have access to CC's without approval from finance dept).
That being said. I found a higher conversion rate via what I call "resource-based" trials. One's not based on time ('14-days') but resources/services your app provides.
For example, in our app users can create 10 free entries with no time restriction. This sounds like a good deal to the user. But what makes it effective is the type of user who ends up paying for our app, was always creating 10 entries the first day already. So it was essentially getting them to commit and signup for free, then give us their CC the same day.
I've been meaning to blog about this for about 2 years now :P
Another way to think of this is that you're creating a time-based trial, but on a "clock" that only ticks down while the user is getting value from the product.
(Not logged in ⇒ trial never expires) = no surprised and pissed-off users.
Get the CC number up front, but still require an 'opt in' after trial expiration to begin charging. You won't start automatically charging, you'll require the user to do something -- but the 'something' is just clicking a single 'yes, start charging me' button, with no need to enter the CC at that point, cause they entered it up front.
I have no idea if that will work to get the conversions he's getting with, well, automatic conversion. But I can't help but think products where a free trial automatically starts charging your CC on a certain calendar date if you don't opt out -- are getting conversions via trickery, and is not going to build a sustainable customer relationship.
hmm. I've spent more time thinking about the ethics of recurring billing than the effectiveness of recurring billing; The big problem I have with recurring billing is that recurring billing tends to capture money from the 'I forgot about it' customers... users have to take an action to cancel the account. Especially for small-dollar items, a recurring charge can go for months unnoticed.
I don't feel good about 'capturing value' from users who forgot to cancel... but the alternative (what I'm doing) is to make them take a positive action every renewal. (In my case, the account auto-renews, but it sends the user a bill that they have to actively pay; if they don't pay, the account goes away.)
Now, some people do prefer the 'bill me every month without asking' model... but I think the right thing to do is to make this an option; one option where the account will expire if the user doesn't take positive action to renew the account, and another option to automatically continue billing until the user asks to stop.
I don't know if many others feel this way, but as a user of subscription services, this is something I think about. I know that I'm probably going to forget to cancel, and that canceling is often difficult, so generally I consider services that don't autorenew to be much 'cheaper' even if they are the same price in terms of dollars.
I've got to say, I'd hate your setup as a user. I've got a thousand different things to respond to/pay/deal with every month. I'd much rather have a service I use just autorenew than have to explicitly pay for it over and over again each month.
Provided...that the service had an easy and obvious way to cancel when I wanted to.
Yeah, this sentence jumped out at me: (Conveniently, lots of people seem to miss/ignore the “Your trial is expiring and credit card will be billed” emails, but no one ever misses the “Billing receipt” emails that come a few days later!)
But of course, people are missing the billing receipt emails!
The problem for me as a potential user is that I no longer trust some.random.dude.com with my CC info. I have no way to know if they're storing it locally unencrypted or if they're using a trustworthy third party provider.
I'm down to maybe three places that have my CC on file. Everyone else, I enter it - every month - at time of payment. I don't exactly like this, either - there is still the possibility that a poorly written component is logging the card somewhere[1], but it's better than handing over my wallet and walking away.
I'm not sure your concern is warranted. Your bank provides a lot of protection against such fraudulent transactions, both at the time of authorization and after the fact if one does slip through. In any case, if you're really worried about your card number being stolen use a secondary card that you use for internet use only that just lives in your "backup wallet".
You're spending more of your life entering your credit card number every month than is likely to be spent dealing with fraud.
I always [1] use a virtual credit card [2]. It's only possible for the merchant to charge a specified amount during a specified time.
I create a new card for every purchase, but long standing relationships (ie my VPS provider) gets a longer lasting card so I don't have to update it every month.
[1] The only time I ever enter my true CC is when bying something that requires a physical card (some airlines, certain tickets).
Interesting. This is something we've thought about as we're designing our product. Would a little "powered by Balanced" image at the bottom help you think?
It wouldn't even need to be a poorly written component. There is a good chance they would log the card number along side the transaction in their database.
[+] [-] dmix|12 years ago|reply
I actually agree CC upfront is better overall than not. Depending on the audience of course (some business users don't have access to CC's without approval from finance dept).
That being said. I found a higher conversion rate via what I call "resource-based" trials. One's not based on time ('14-days') but resources/services your app provides.
For example, in our app users can create 10 free entries with no time restriction. This sounds like a good deal to the user. But what makes it effective is the type of user who ends up paying for our app, was always creating 10 entries the first day already. So it was essentially getting them to commit and signup for free, then give us their CC the same day.
I've been meaning to blog about this for about 2 years now :P
[+] [-] DenisM|12 years ago|reply
[+] [-] derefr|12 years ago|reply
(Not logged in ⇒ trial never expires) = no surprised and pissed-off users.
[+] [-] jrochkind1|12 years ago|reply
Get the CC number up front, but still require an 'opt in' after trial expiration to begin charging. You won't start automatically charging, you'll require the user to do something -- but the 'something' is just clicking a single 'yes, start charging me' button, with no need to enter the CC at that point, cause they entered it up front.
I have no idea if that will work to get the conversions he's getting with, well, automatic conversion. But I can't help but think products where a free trial automatically starts charging your CC on a certain calendar date if you don't opt out -- are getting conversions via trickery, and is not going to build a sustainable customer relationship.
[+] [-] racbart|12 years ago|reply
[+] [-] Guvante|12 years ago|reply
[+] [-] lsc|12 years ago|reply
I don't feel good about 'capturing value' from users who forgot to cancel... but the alternative (what I'm doing) is to make them take a positive action every renewal. (In my case, the account auto-renews, but it sends the user a bill that they have to actively pay; if they don't pay, the account goes away.)
Now, some people do prefer the 'bill me every month without asking' model... but I think the right thing to do is to make this an option; one option where the account will expire if the user doesn't take positive action to renew the account, and another option to automatically continue billing until the user asks to stop.
I don't know if many others feel this way, but as a user of subscription services, this is something I think about. I know that I'm probably going to forget to cancel, and that canceling is often difficult, so generally I consider services that don't autorenew to be much 'cheaper' even if they are the same price in terms of dollars.
[+] [-] trcull|12 years ago|reply
Provided...that the service had an easy and obvious way to cancel when I wanted to.
[+] [-] sp332|12 years ago|reply
But of course, people are missing the billing receipt emails!
[+] [-] GrinningFool|12 years ago|reply
I'm down to maybe three places that have my CC on file. Everyone else, I enter it - every month - at time of payment. I don't exactly like this, either - there is still the possibility that a poorly written component is logging the card somewhere[1], but it's better than handing over my wallet and walking away.
[1] seen it...
[+] [-] kintamanimatt|12 years ago|reply
You're spending more of your life entering your credit card number every month than is likely to be spent dealing with fraud.
[+] [-] eCa|12 years ago|reply
I create a new card for every purchase, but long standing relationships (ie my VPS provider) gets a longer lasting card so I don't have to update it every month.
[1] The only time I ever enter my true CC is when bying something that requires a physical card (some airlines, certain tickets).
[2] similar to http://www.visaeurope.com/en/cardholders/virtual_cards.aspx but branded by my bank
[+] [-] jsonne|12 years ago|reply
[+] [-] jtdowney|12 years ago|reply