Netflix is extremely good at not only customer acquisition but also customer retention. Netflix acquires a customer with a free trial. The customer makes the initial “purchase” decision based on the perceived value (since the benefits outweigh the costs, which is free, the perceived customer value is high). Netflix sends out mail and email advertisements about these free trials and provide potential customers with free-trial codes. After a free 2 week trial the customer must pay for the service. Many stay, but some do not. I left after the 2 weeks and immediately after I received an email asking me to come back and get another free trial. This continued for about a year. The company works hard at retaining customers, since it is cheaper than acquiring new ones. Netflix is no longer a new thing so many people know about it but the company is still working hard at acquiring new customers, and retaining former customers as well as asking trier-rejectors to come back.
Here is an email they just sent me:
This promotional email has been sent to you as a former Netflix member. If you would like to stop receiving these emails, please click here to unsubscribe. Please do not reply to this email, as we are unable to respond from this address. If you need help or would like to contact us, please visit our Help Center.
*Free Trial Offer: Expires 02/28/2010. Free Trial offer available to first time and certain former members of the Netflix service and cannot be combined with other offers. Internet access and valid payment method required to redeem offer. Free trial lasts for 2 weeks. Netflix will begin to bill your payment method for the Netflix plan selected at sign-up at the completion of the free trial unless you cancel prior to the end of the free trial. Subscription Periods: Your Netflix membership is a month-to-month subscription that you can cancel at any time. Click the "Your Account" button for cancellation instructions. No refunds or credits for partial monthly subscription periods. Membership & Trial Plans: The number of DVDs out at a time and per month varies by plan. For example, 1 DVD out-at-a-time is $8.99 plus any applicable tax. Watching Instantly: Not all DVD titles are available to watch instantly. Members may watch instantly only within the 50 United States and the District of Columbia. A Netflix ready device is required to watch instantly on your TV. See www.netflix.com/
This promotional message was mailed to [email@example.com] by Netflix.
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Darya Shur, section E