Trial users never convert to paid
Requiring a credit card for free trials dramatically increases conversion. People who enter a card are serious.
When to use
You have a trial that's getting signups but not conversions, and you're comfortable with fewer but more committed trial users.
Hypothesis template
If we require credit card at trial signup, paid conversion will reach [target]% because committed users self-select and inertia works in our favor.
Method
The problem: Tons of people sign up for your free trial. Almost none convert to paid. You're paying to serve free users.
What Netflix perfected: Free trial, but credit card required upfront. You get charged automatically when the trial ends unless you cancel.
The numbers (industry averages):
- Trial WITHOUT card: 2-5% convert to paid
- Trial WITH card: 50-70% convert to paid
- That's a 10-20x difference
Why it works:
- Self-selection: people entering a card are genuinely interested
- Inertia: most people don't cancel (not because they forgot—because they're using it)
- Commitment device: entering payment info is a psychological commitment
- No payment friction later: they're already set up
How to implement:
- Require card at signup but charge nothing during trial
- Be transparent: show exactly when they'll be charged and how much
- Make cancellation easy (builds trust, and most won't)
- Send a reminder before the trial ends ("Your trial ends in 3 days")
- First charge: confirm with an email and receipt
The objection: "But fewer people will sign up!" Yes. And that's the point. You want fewer, more committed trial users who actually convert—not thousands of freebie seekers.
Key insight: Optimizing for trial signups is a vanity metric. Optimize for trial-to-paid conversion.
Success metrics
- •Trial signup rate (will decrease)
- •Trial-to-paid conversion (will increase dramatically)
- •Revenue per trial user
- •Cancellation rate during trial
- •LTV of card-upfront users vs no-card users
Prerequisites
- Payment processing
- Clear trial terms and cancellation
- Reminder emails before charge
- Good trial experience worth paying for
Common pitfalls
- •Not being transparent about charges
- •Making cancellation hard (dark patterns destroy trust)
- •Not reminding before the charge
- •Trial too short to show value
Source: Netflix. Credit-card-required trials convert 50-70%.
Suggested ICE scores
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