The idea behind your software is fantastic. Brilliant, really, but you are completely shooting yourself in the foot with your upgrade strategy.

By having people spam their contacts to get the free upgrade BEFORE they have experienced the service, they do not have the passion around it that encourages them to shout from the rooftops.

Also, an ancillary effect is that you don't get to have the conversation with the users and improve the service to their satisfaction. By doing this, you would get good initial feedback, fix the problem, and turn them into evangelists.