Small Businesses Weigh the Pros and Cons of Offering Free Wi-Fi
Over the past decade, countless small businesses have started to offer free wireless Internet access to their customers. Today, however, some businesses are thinking twice about whether this makes sense, and some have even decided that this customer perk is more trouble than it's worth.
"Some businesses will benefit by offering free Wi-Fi, and others won't," said Jason Wisdom, president and principal of Wisdom Consulting, a New York City firm specializing in business-technology relationships. "I know some cafes in New York that used to offer free Wi-Fi, then stopped. Their space was filled up with free Internet seekers who would buy a cup of tea for $1.70, then hog four-person tables for hours during peak business time."
Wisdom's example presents a typical dilemma for small businesses that now offer free Wi-Fi access. Some of these establishments offer the service because they feel they have no choice, especially if their competitors offer it. Others embrace free Wi-Fi as a useful customer service tool. And at least some retailers, as Wisdom noted, have concluded that the costs of providing free Wi-Fi far outweigh the benefits.
Free Wi-Fi as a Compelling Customer Perk
For Shannon Valko, cofounder of Little Beans Café in Chicago, there was never any question as to whether her business would offer free Wi-Fi.
"We are pretty niche, so we absolutely had to have it," Valko stated, "and if we were to charge for Internet, that could really ruin our reputation overall. We really felt that it would be one of the perks [for our customers] in choosing us."
Wisdom agreed that many businesses have built a unique value proposition around their free Wi-Fi access. "I also know other cafes that have become go-to places for freelance writers and liberal arts students, and free Wi-Fi is a key part of the experience," Wisdom said. "I would recommend that small retail stores with sit-down tables do consider free Wi-Fi, or at least until it has proven to be more of a hindrance than a benefit."
The Hidden Costs of Free Wi-Fi
As Wisdom pointed out, this "hindrance" often takes the form of customers occupying valuable seating space while paying little or nothing for the privilege. Yet there are other drawbacks to offering free Wi-Fi that can impact a retailer's bottom line.
One example involves Kim & Scott's Café Twist, a pretzel sandwich café in Chicago's Lincoln Park. After opening for business a year ago, the owners decided that free Wi-Fi would make a good customer perk. Instead, a lack of reliable Wi-Fi access and problems with their service provider sparked numerous customer complaints -- so many, in fact, that the owners eventually scrapped the idea completely.
Indeed, Wi-Fi service and reliability issues are often an issue for small businesses with limited budgets and staff. While the initial setup for a Wi-Fi network, including a router and Internet service, can seem inexpensive, ongoing maintenance and technical support can add significant costs. And when a retailer offers free Wi-Fi that doesn't work as promised, the customer service fallout can be far worse than not offering Wi-Fi at all.
Keeping Track of Comparison-Shopping Trends
Metering, or actually charging customers, for Wi-Fi access is also an option. Some retailers, for example, give paying customers a code (often printed on a receipt) that allows them to use a store's network for a certain amount of time. While this cuts down on the freeloading factor, it also requires the use of additional software to manage access -- and it will inevitably alienate a certain percentage of customers.
In some retail segments, businesses are discovering another way to leverage free Wi-Fi: using it as an advertising, marketing, and customer relationship management tool. By monitoring a customer's online searches, for example -- an obvious indicator of comparison-shopping behavior -- a retailer can offer its own personalized discounts and special offers designed to turn a browsing customer into a paying one.
Wisdom said that these types of offers can be extremely useful for retailers. "So if you as, say, a fashion store owner offer free Wi-Fi with advertisements for the new Prada collection, then both you and Prada stand to benefit. Add four or five of these joint venture promotions together, and free Wi-Fi can be much more profitable."
Leveraging free Wi-Fi as a customer service and marketing tool won't be profitable or even practical for every retailer. But these changes at least suggest that the question of whether to offer free Wi-Fi is far more complex than it used to be.
