Why I'm going back to capturing credit cards up front
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Re: Why I'm going back to capturing credit cards up front
#2I 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
Re: Why I'm going back to capturing credit cards up front
#3Another possibility that's not discussed:
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.
Re: Why I'm going back to capturing credit cards up front
#4hmm. 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.
Re: Why I'm going back to capturing credit cards up front
#5hmm. 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 'captu…
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!
Re: Why I'm going back to capturing credit cards up front
#6hmm. 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 'captu…
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!
Either I'm misreading your comment (entirely plausible), or you're misreading the article. I read that as a snarky way of saying that people aren't really missing the "expiration" emails, they're just too lazy to do anything about it.
Re: Why I'm going back to capturing credit cards up front
#7hmm. 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 'captu…
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!
Some services don't send invoices (which really, really bothers me. I don't want to remember that I'm paying for a service after looking through my AMEX statements.)
Others, like KissMetrics, sends you an email a few days before billing you... but their price points start in the 3-figures.
I think a policy of "We will bill you monthly and send you an invoice every time we bill you, and we'll always refund your last month's payment if you'd like" is best.
Re: Why I'm going back to capturing credit cards up front
#8The 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.
[1] seen it...
Re: Why I'm going back to capturing credit cards up front
#9hmm. 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 'captu…
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!
I think you misinterpreted.
It seems to me that he's saying that he sends reminders that the credit card will be billed and people don't cancel. But as soon as they get emailed that a charge was made, they do see that email because they're quick enough to cancel and request a refund.
It sounds to me like OP is actually going a fair job of managing this. He sends notice before billing, and a receipt after. Though I might change it so that the first billing required an opt in, with daily reminder emails in the last few days.
Re: Why I'm going back to capturing credit cards up front
#10Earlier quoted context omitted.
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!
Either I'm misreading your comment (entirely plausible), or you're misreading the article. I read that as a snarky way of saying that people aren't really missing the "expiration" emails, they're just too lazy to do anything about it.
Right, the article was saying that. But the article was jumping to an unreasonable conclusion, because of course you never hear from the people who missed the "Billing receipt" emails.
I assume that was GP's point.