The thing about requiring credit cards to sign up for a free trial

If you work at a software company, you’ve almost certainly run into this question before: Should people have to enter a credit card to sign up for a free trial?

There are compelling arguments on both sides. The argument in favor of requiring credit cards normally goes something like this:

By requiring the credit card, you filter out all the tire kickers. People who sign up for trials are automatically qualified which will increase your trial-to-paid conversion rate and reduce the amount of time you spend on supporting unqualified leads. Not to mention, when the trial ends, there’s no extra step for the lead to take, so you won’t have people accidentally drop off just because they forgot to pay.

The argument against is normally something like:

By allowing people to trial your software without a credit card, you’ll significantly increase the top of your funnel. There may be a lot of people who aren’t willing to enter a credit card up-front (they’re not sold yet) but who will gladly subscribe if your product is good. Plus, if you’re selling to businesses, a lot of people don’t even have credit cards, and they’re not going to ask a manager to put a card down for a product they haven’t even tried yet.

So how do you decide? Probably the most common advice is to run an A/B test and just see which one results in the most revenue at the end of the day.

But after seeing countless debates about this throughout the years, there’s one very important thing that I almost never see mentioned...

The thing no one talks about

There's absolutely no debate about one thing: Customers don't want to enter a credit card. In the history of the world, there has not been a single time when someone signed up for a free trial and was like, "gosh, I wish they'd taken my credit card before letting me use the app." It's never happened.

First off, wtf? Why is this so often left out of the conversation? Have SaaS businesses become so detached from the customer that it’s not even worth mentioning? I get that running a business is about balancing the needs of various groups, and you can’t always do what’s best for the customer, but for it to not even be in the discussion the vast majority of the time seems like a major red flag to me.

But even if you want to be selfish, this is a bad way to be selfish. Given that it's unclear what the right selfish move is and it's completely clear what the selfless move is, it seems like we should all default to the selfless one. I say "default" because there are cases where taking a credit card upfront is important (e.g. if your free trial can be abused by spammers) but you should always default to no-card trials unless you have a good reason for requiring the card. By doing so, you get a slam dunk customer experience win and the impact on your bottom line is a toss-up anyway, so why worry about that? Save your greed for a different issue where you actually know it’s productive.

Have thoughts on this post? I'd love to hear from you! I'm @TylerMKing on Twitter.