I don’t like asking for the credit card upfront. What I see time and time again is a short-term boost to short-term metrics, at the cost of longer term revenue and brand building.
Why? 90% of the time, asking for a credit card immediately simply adds unnecessary friction to a sales process. It adds, best case, a pause or hesitation before using your product. Your job as CEO is to relentlessly cut friction out.
The short-term data often says otherwise. Certainly, if you require a credit card immediately:
- Your conversions go up! But of course they do. Because folks that might have paid if you’d given them more time to use your product … go away.
- “Churn” goes down! Yes because customers self-select out before then.
- Your short term metrics look better. Maybe your VCs are happier at the next board meeting.
- Support is happier. They much prefer not having to support a ton of free users, just the paid ones.
- Sales gets better lead scoring data — maybe much better, in fairness. Sales isn’t overloaded talking to tire kickers if you add a credit card gate to start. This does sort of help. They can just spend time with folks that at least have put a credit card number in.
But metrics can lie, or at least, steer you in the wrong direction. They can make short-term “progress” appear to be happening at the cost of more customers in the long-term. Who cares what your conversion rate is, in the end — at least in absolute terms. Yes, it bad if it goes down. But what matters is each month, you convert more customers than the last month.
The best SaaS apps we love that sell to all sized customers, not just Enterprise, are just easy.
Easy not just to use, but to try, pilot, and then buy. Slack. Zoom. Mixmax. Notion. Pipedrive. PagerDuty. Trello.
Why add friction?
You know that doesn’t help. Not if you are going long. Not if you want the whole world to love, and use, your product.