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Benjamin Bertelsen

MSc in Digital Innovation & Management

I am working on a software-as-a-service product and am trying to decide on how best to implement sign up. My product offers 4 paid plans; there is no free plan.

For those of you who don't know, Braintree's (payment gateway) sponsoring bank no longer allows new companies to offer a traditional "30-day free trial", take credit card information during sign up, and then charge customers at the end of the free trial (like 37signals).

So, I am trying to decide between the following two options:

1) No credit card required at sign up. 14 day free trial on all new accounts. At the end of the 14 day trial, if the customer has not "activated" their account (that is, provided credit card information and been charged), the account is locked/closed until they.

What I like about this method is that it should convert the most users who land on the site to sign up to use the application. My concern is that the additional step (having to provide credit card info after sign up) could lead to fewer paid users... Keep in mind, though, that I am not offering a free plan, only a free trial period.

2) 30-day money back guarantee. Credit card is required at sign up and the customer is charged immediately. But, for 30-days, the user can cancel the account and receive a full refund.

I like this method because it means 100% users are paying customers and actually get billed. My concern is that a "30-day money back guarantee" + credit card required at sign up + immediate charge will lead to a much lower sign up conversion rate on the website, ultimately leading to less customers then method #1.

What are your thoughts on Free trialsvs. Money back guarantee as options?