Cost of provisioning and supporting was already mentioned - that's big .
Another key point to consider is the amount of effort required from the user in order to derive value from your product. If the product can be used easily and passively (e.g. Pandora) than a free signup makes the most sense.
If your product requires higher user engagement to be useful - i.e. they need to dedicate an hour or two to working with it, or need to integrate with something, than a refund or out may make more sense - many people treat free trials as worth what they paid for them - nothing. If someone has to pull out a CC, they have more likely overcome the hurdles necessary to engage with your service.
Comments
Cost of provisioning and supporting was already mentioned - that's big .
Another key point to consider is the amount of effort required from the user in order to derive value from your product. If the product can be used easily and passively (e.g. Pandora) than a free signup makes the most sense.
If your product requires higher user engagement to be useful - i.e. they need to dedicate an hour or two to working with it, or need to integrate with something, than a refund or out may make more sense - many people treat free trials as worth what they paid for them - nothing. If someone has to pull out a CC, they have more likely overcome the hurdles necessary to engage with your service.