You'll lose a lot of signups. On the other hand, your signup-to-actually-pays conversion gets dramatically higher. (Appointment Reminder captures CCs at signup and will successfully charge north of 50% of those accounts at least once.)

I am extremely reluctant to give anyone my credit card number. If I used your free service and it works great, I will consider it. But the chance that I will give my CC number to a service I have just heard of is basically zero.

I understand that have data on this and the customers who converge outnumber the ones that you loose, but it might diver per demographic. Paying with credit cards is less common in Europe than in America, so that might play into it. What might help is get a seal of approval from some organization that you are safe. If you have social proof it's even better.

EDIT: I might also be worth considering if non-paying customers are really just a liability to you. I understand the bottom line is what counts at the end of day, but free customers might recommend your service to someone else or they might come back later when they really need your service.

Perhaps you are one of the Five Hundred that he mentions above, then?

It would be ok to lose signups from people who would not ever buy your product, but I don't think that's the case.

I for one, subscribe to a lot of SaaS but would never put in my CC number just for a trial.

And what about corporate customers? I think many subscribers can come from corporations where someone somewhere tried the product and liked it, and then made sure his company paid for it. If he had to enter his CC# before he could even try he would probably not do it.

#1 least useful insight to be gleaned from HN for people selling software:

Data points of HN readers who would never do X or would be annoyed by Y in the process of evaluating your software.

Fixed typo.

"cleaned"?

I think the target population matters. If you're selling to teachers or dentists, then you should speak to teachers or dentists to learn what they will do or not do.

If you're offering a jQuery framework, then HN seems pretty relevant as far as the people susceptible to subscribe to your services.

Don't sell software development tools to HN'ers.

I was thinking that I would be reluctant too, but then I realised that I have given plenty of SaaS companys my CC up front - sometimes not even for a free trial (but usually with a moneyback guarantee). E.g Linode and JungleDisk.

On the day after the CC charge - do you have people terminating the account? Somehow, I feel this might lead to people forgetting their 30-day trial and will terminate when they realize they have been charged. Ofc, it's their problem if that happens. Curious, and just hypothesizing.

Every subscription business will have a) people who pay for but don't use the service and b) people who pay for but don't use the service and ask for refunds. If you ignore your emails telling you "Thanks for signing up for AR, friendly reminder, your trial ends in 3 days." and the subsequent ones reminding you every month, I'll happily take your money rather than second guessing your business decisions. (I used to pester people about that but plural people literally said "Stop pestering me! I get it! We bought it now but won't use it until March. No I don't care about paying extra! Its like $80 a month, why would I care?!")

I get a notification when anyone unsubscribes and, if it looks sort of borderline (e.g. sent one test phone call on the first day, never used the service again, and then canceled on day 33) I offer to refund their money. I get about 50% uptake on that. This makes me sort of anomalous in the industry (take a look at e.g. 37Signals policy on refunds -- "We. Don't. Refund." -- which is much more common) but it works at my scales because AR doesn't have so many accounts at the moment that sending an email or two a week is a big tax on my time. (And, of course, I don't lose sleep at night over $9 or $29 or $79 in revenue. It is literally rounding error for me -- if the yen hiccups that is much more painful.)

At the risk of stating the obvious: the business model is not hoping that people will forget about their subscription to Appointment Reminder. The business model is in convincing them to log into the site every day, run their business off AR, and call my cell phone at 3 AM in the morning to scream at me if anything goes wrong because that way I can get them to pay me thousands of dollars.

We had a 30-day free trial for our app as well. We had basically zero conversions from trial to paid. Once we changed it to a 30-day money back guarantee, we started getting subscribers. Only about 20% cancelled during the trial period. So the difference for us was night and day.

A note, in our case we used PayPal for subscriptions.

Somehow charging at trial signup doesn't _feel_ right to me. Even if you are able to charge once and then users ask you to cancel, this means they never would have paid if you had not asked for their card at the beginning. What use is revenue if customer isn't likely to have used the service or doesn't need it (but simply paid because you automatically billed them)?

However, as a way to weed out non-serious users, I can understand the rationale (but then again you would let go of publicity effect).

Great questions! The idea is not to charge them on day 1. The idea is to charge them on day 30, just like you do right now, but collect their CC (and revocable permission to charge it on day 30) on day 1.

You're not trying to get people to forget about the service and pay for one month then cancel. That's not a long-term success for the business. You're trying to extract a commitment to pay money because extracting a commitment to pay money automatically increases their perceived value of your service, their engagement with it, and their likelihood of paying for it.

Forcing the decision-point until when the trial is over will cause them to discount the value of their software because a) they've already consumed it or b) they haven't had time to look at it yet but have had time to totally forget your sales copy about it. You want the big decision point to come at their moment of maximum perceived desire for the software: when they've just come to your website with a headache and you've just told them you're selling aspirin, the magic cure for headaches. At that moment they burn with desire for aspirin, so get agreement in principle that if the aspirin cures their headache you get paid, rather than saying "Take this aspirin and then let's talk about how much you value not having headaches four weeks from now."

After you get people to make the decision, all of their future actions will tend to reinforce that they previously made the correct decision. (People hacking 101.)

Thought, someone else brought up a point that the person visiting the landing page might not be willing to use his/her credit card when trying to sign-up on a company's behalf. So, does it also boil down to the kind of market you are selling to (when the end-users are not independent decision makers)?

I don't know about most companies, but every single person who would have been in a position to buy software on the companies behalf could have easily pulled out their company credit card or the sheet of the paper that each department had with the credit card info on it and bought the software.

These companies ranged from 2 people to 400+ people. Most SaaS offerings are under $50, which seems to be something that most business people won't hesitate about spending money on and certainly wouldn't require someone to go to someone else to approve.

If this is the case in your company you're wasting a lot of time!

Hey Patrick do you do a pre-auth when you take the CC number as well I assume?

I believe SEOMOZ has a thirty day trial but you must give your CC (cancel at any time). They offer some services for free to non users, but they are throttled by cookie/IP so that after the third or forth query in a certain time span, they hit you up with the sign up page.