Netflix is the big name in streaming, virtually everyone who has any interest in digital shows has heard of them, but they still give you a free trial.

No matter your size, and even if it's an existing customer, it makes good business sense, finds a new paper.

Give an existing company something free? The analysis looked at a tel-com that offered free mobile phone data to existing users - an offer they could share the offer with friends. The company used their brand to create social currency, so it benefited the company, the customer, and their friends. And it was the most active customers most likely to respond, not the lower-tiered customers you'd think more likely to want increased data at no cost.

Even higher-tiered existing customers who took the offer continued their higher usage after the free trial campaign ended, increasing sales for the company. 


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This is a more compelling finding than the "freemium" model common now, where the basic version is free but customers have to pay to get access to more advanced functions or features. It is often a challenge to convert customers because the product looks limited, since they have no experience with full functionality.

The research findings suggest that to increase the impact of free trial campaigns, marketers can leverage the "power of sharing" by including a sharing feature in their offer. It can also help with customer retention, and customer acquisition is a very high cost.

These results have important implications particularly for companies that offer online 'experience products' such as gaming, collaboration tools or music streaming services, where customers need to experience it to appreciate its value, says Dr. Hillbun Ho from the University of Technology Sydney.