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The truth about free trials

Tom Spring | Sept. 10, 2012
We handed over our credit card for 40 online trials, to find out the real cost of 'free.'

The business model behind free trials is simple: Give people a taste of your service, keep your fingers crossed that they like it, and hope that they stay. Requiring a credit card at sign-up makes it easier for companies to convert tire kickers into paying customers. Companies that I spoke with claimed that the requirement was a convenience. GoToMyPC representatives, for instance, say that the requirement allows the company to continue service without interruption when the free trial ends. Internet Movie Database's reps justify it differently, saying that "a credit card allows us to verify a user's identity and avoid multiple sign-ups for free trial memberships."

Who are these companies kidding? The credit card requirement serves only the companies offering the free trial. Having to put down a credit card to participate in a free trial is like lending your friend money for a trip to Las Vegas: Sure, he'll pay you back, but when? It's a risk.

When a company requires a credit card as part of a free trial, 40 to 45 percent of those accounts become paying customers, says John Greathouse, a dot-com entrepreneur who was also one of the original online marketers for GoToMyPC. "Non-credit card trials generally convert in the low single-digit range-typically 2 to 4 percent," Greathouse says.

Another painfully clear truth: The easier companies make it for people to sign up, the more customers they get. Such companies may also suppose that the harder they make it for trial users to unsubscribe, the more customers they'll keep.

That's flawed logic, in my opinion. The more hassles a company gives me, the less likely I am to do business with them. And the companies that make it easiest to unsubscribe are ones that I would consider patronizing again.

Free trials we liked

Canceling my 14-day free-trial membership to Merriam-Webster's Unabridged Dictionary online took only three clicks, allowing me to avoid the $30 annual fee that the service would have charged to my credit card had the trial period expired. My experience in canceling Merriam-Webster's free trial was excellent, and stood in sharp contrast to the dozen sites that made cancellation feel like a hunt for a piece of cheese in a maze.

Despite the hair pulling that free trials put me through, several services-including AdaptedMind,, Britannica Online, Dr. Laura, Hulu Plus, Merriam-Webster, SugarSync, and The Weather Channel-proved that it is possible to make parting ways a breeze. (Click the chart above to view it full size.)

What did those sites have in common? Intuitive navigation, clear instructions, and no gotchas after you click the Cancel button. Once I cut ties, these services didn't send me a barrage of commercial email and "we want you back" pleas.


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