Limiting friction in the sign-up process, like requiring a credit card on file, undoubtedly will fill the top of your funnel with more potential people.
One study by Totango showed that while only 2% of visitors sign up for a free trial when a credit card is required, 10% do when it’s not.
Sounds like a no-brainer. Except when you factor in quality.
The same study showed as many as 70% of your free trial signups are effectively useless (while only about 20% are truly evaluating your product).
And if that’s not bad enough, there’s conflicting data about what happens when it comes to real conversions.
50% of those consumers that used their credit card went on to become customers, while only 15% of those who didn’t, did not.
Counterintuitively, the most profitable Moz customers ARE NOT those who convert on the first or second visit.
But the ones who visit at least eight times! Rand himself says of their experience:
“Many, many visits are often correlated with high purchase prices.”
The ones who are quick to come, converting the highest initially, are also quick to leave (with the highest churn rates).
That’s why when it comes to using paid methods to convert customers, you should start with those already most interested and familiar with your brand (as opposed to new, cold ones with little-to-no brand awareness).