When to give away your product or service for free

[MississippiInventor]

Kevin is asking about formula / equation to determine a ratio of "units of free give away" to obtain maximum profit. (Kevin, correct me if I am wrong here.)

There are going to be equations in books that would help define this point. (If we keep it simple, it sounds like a maximation problem from stats. )We will have to dig into some basic stats, marketing, and advertising books to come up with the right answer.

Instead of digging into books right now,
How about a fun exercise?

Can we, on this forum, come up with a basic formula ourselves?

I think so. Anyone else want to work together to come up with this formula???

If so, where do you suggest that we start?

If we do come up with our own formula, then I will pull out some old books, do some research, and tell you what I think the formula/ratio should be according to the books.

[Kevin Lee]

Kevin is asking about formula / equation to determine a ratio of "units of free give away" to obtain maximum profit. (Kevin, correct me if I am wrong here.)

Hi MississippiInventor,

you're spot on

[David Hurley]

Well, it sounds interesting.

I do think we should define our parameters though, because the ultimate gift extinguishes this life and is reputed to gain the giver eternal glory, which might throw a spanner into any attempt at statistical computation...

("Maiorem hac dilectionem nemo habet, ut animam suam ponat quis pro amicis suis. &c")

[christew]

Usually you would have freebies as part of a marketing campaign.

Sop a giveaway to create buzz, or a giveaway in return for a certain action from the user (e.g mailing list signup)