What Removing Credit Cards From Our SaaS Trial Did to Our Revenue

Jeff Osness

June 27, 2022

6 min

Table of Contents

Since launching our Power Dialer and sales acceleration platform in 2008, we have always offered customers a free trial and have required a credit card.

At the end of 2014, while in the process of revamping our website, we decided to build out and split test a new funnel that offered a free trial without requiring a credit card.

By removing such a significant barrier to entry, we expected a boost in the number of leads entering the funnel. But by having to convert each free-trial signup into a paying customer, would we ultimately increase or decrease sales in the process? Would removing the credit card requirement produce a less qualified lead? What else would we learn?

As it turns out, we learned a lot. Our A/B test ran from January 25th through May 2nd. Below is an overview of Funnel A (“Credit Card” or “CC funnel”) and Funnel B (“No Credit Card” or “No-CC funnel”), the unexpected results, and key takeaways from the test.

Homepage Variations

The homepage was virtually identical for both funnels. The only difference was the call to action button:

Funnel A: Try 7 Days for Free

funnel 1

Funnel B: Start Free Trial - No Card Required

funnel 2

Signup Process Variations

Funnel A: After clicking the signup button, a CC Funnel visitor goes through a 2 step process.

Step 1 - Choose Account Level

choose account level

Step 2 - Setup and Billing Forms

setup and billing page

Funnel B: The No-CC Funnel requires minimal fields for account creation, so only a simple form is needed.

free signup form

Post-Signup Process Variations

The post-signup process is where the two funnels really begin to deviate.

Funnel A: CC Funnel signups automatically get billed if they don't cancel during their 7 day free trial. Naturally, that influenced the post-signup process, calling for a more supportive (rather than sales-oriented) approach. This included:

  • A basic welcome email with login credentials and our support contact details
  • An in-app chat/alert from our customer advocate who offers assistance, answers, and a 20-minute demo
  • A back office training program to help users get up and running
  • Subsequent in-app alerts promoting blog posts and new features

Funnel B: No-CC Funnel signups get unlimited use of our CRM system and 60 minutes of free dialing time. Since generating revenue with this model requires us to earn every customer, first by encouraging them to use their trial minutes and then convincing them to upgrade, a more proactive and sales-oriented post-signup process was implemented. This included:

  • A basic welcome email with login credentials and our support contact details
  • An in-app chat/alert from our customer advocate who offers assistance, answers, and a 20-minute demo
  • A back office training program to help users get up and running
  • A series of emails promoting our 20-minute demo, educating users about features and training, and encouraging upgrades
  • Subsequent in-app alerts encouraging upgrades and promoting blog posts and new features
  • A header bar inside the platform directing users to the account options page
header bar

Split Test Results‍

Not surprisingly, the No-CC Funnel resulted in a significant boost in signups. Compared to the CC Funnel, we noticed a 239% increase in new users. Part of this might be explained by the fact that a lot of high-quality prospects for our software are employees - without immediate access to a company credit card - and are therefore better served by the no credit card trial.

Also expected was a drastic reduction in conversion. Whereas conversions for those providing a credit card (i.e. not cancelling during their trial) was 73%, only 22% of non-credit card signups converted into paying customers. It’s important to note, however, that No-CC users who haven’t upgraded still have an active account, allowing us to continue to nurture the relationship and potentially convert them into customers in the future.

When we began the split test, the metric we were most interested in was revenue.

Overall, Funnel A, the CC Funnel, produced:

  • 35% more paying customers
  • 16% more revenue

Based on these numbers, it would seem that CC Funnel was the obvious winner.

To the contrary, we chose Funnel B, the No CC Funnel... and now offer all website visitors a completely free trial without asking for a credit card.

Here's why…

Key Takeaways

When it comes to SaaS, lifetime value is a far more important metric than conversion. To that end, it’s quite common for a SaaS signup process to require prospects to submit a credit card, and even speak with a sales engineer prior to trying the service. Doing so is expected to produce better-qualified, and therefore higher-value prospects for the sales team to work with.

For this reason, we had some expectations that by removing the credit card requirement, we might decrease our lead quality as well. However, the opposite happened.

While the CC Funnel produced significantly more paying customers, and higher upfront revenue, they churned at roughly twice the rate of our No-CC customers.

Not only did the No-CC Funnel provide a much larger group of prospects to interact with and nurture, they were actually more inclined to interact with our sales team. Even though both groups were offered a demo, the No CC signups were far and away more likely to accept, and to reach out with questions in general. This, coupled with the additional time and effort we put forth to convert them, resulted in more qualified, more engaged, and more valuable customers in the long run.

Another side-benefit resulting from the increased number of demos with our No-CC audience, was an upsurge in team (multi-seat) accounts. The No-CC Funnel produced 77% more team accounts than the CC Funnel. When you consider that, on average, team accounts have a lifetime value 10 times that of an individual seat, this is a big win.

Perhaps the biggest lesson coming out of our split test is that a No-CC Funnel does a better job of aligning our interests with those of our customers.

By switching our approach to earning a customer’s business by showing them the product - as opposed to just our sales page - we have adopted a much more personalized experience. We are interacting more with each user. We are learning more about them and what they need. And, we are more focused than ever on the onboarding and overall experience of each user.

Everybody wins.

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