Support costs need to be factored in too. Free customers can often have an enormous customer support cost. They'll send emails to sales@company.com if they can'

Support costs need to be factored in too. Free customers can often have an enormous customer support cost. They'll send emails to sales@company.com if they can't find a support email with questions along the lines of "How do I do x..." (which might be completely covered by the documentation they didn't read), or "I have a suggestion...". You have to weigh the pros and cons. In some cases the cons might outweigh the pros and so you further qualify your free users, for example by requiring a Credit Card. This can be a big problem in freemium (and open source) type products.