Free WiFi Still Pays Off
from the skinny-latte-and-a-t1 dept
As long as coffee shops and other places have been offering WiFi to their customers, there's basically been two camps: those whose eyes fill with dollar signs at all the revenue they think they can make from selling access, and those who understand that the often-minimal cost of providing free service pays off in the extra customers it brings in. It remains unclear if selling WiFi access is really a viable business, while the benefits of free WiFi are pretty apparent. Now, Tully's, a coffeeshop chain based in Seattle, has decided to make its hotspots free, realizing it will bring more people into the stores, so it can then do what it does best -- sell them coffee. But in addition to being a valuable customer-acquisition tool, free WiFi has another benefit over running a paid hotspot: lower costs. When businesses charge people for WiFi access, there's a host of additional costs they must bear, from setting up and maintaining a billing platform to dealing with support. Moving to a free service, where an establishment pays a flat-rate to a managed service provider, or simply gets a net connection and plugs in a router, eliminates many of those costs. But what about the freeloaders? Tully's founder says he's not too concerned, as he thinks most people will at least buy a cup of coffee.Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.
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I don't know...
And Tully's has to realize this is opening a big liability door. These days with blame is being shifted all around for illegal downlading they better be ready for lawsuits up the booty. I can already imagine the freeloaders going to Tully's to do their "questionable" downloads and doing the legit stuff from their homes.
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Freeloaders...
Now, however, it's packed with people on laptops all day and buying one cup of coffee every few hours. I don't go anymore as there is rarely a place to sit and it's not all that pleasant any more.
I seriously doubt that it's bringing in more revenue than without WiFi as there's far less customer turnover than there used to be and a lot of locals just don't go there anymore. Plus, with everyone so focused on their screens, it very un-inviting.
The only saving grace here is that there is a kids park just down the street and a lot of parental units stop to get to-go coffee and food.
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Re: Freeloaders...
If someone sets up a wireless network is it possible to set up filtering software to block certain sites?
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free wifi to sell coffee??
Next they'll be selling phone topup cards and postage stamps.
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WI-FI
If the locals don't like "outsiders", then that's just too bad. Plus, locals probably don't NEED to use the coffee shop for wi-fi because they most likely live close by and have internet connections at home.
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I used to own a place with Paid and Free
While I worked to make the experience positive for most who came in with free refills and taking care of them, most people just took advantage of it. I suspect it will be the same for that coffee shop.
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Re: Re: Freeloaders...
I know that personally, when I need to get some work done outside the home, I'll hit Bread Co. I would go to Starbucks, but they charge for wireless, and it's just not worth it. While this does tend to make places a little more crowded, it's a big business boom, and it's really convenient.
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Free wi-fi
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As a WiFi employee
As for Sanguine Dream questions of "If someone sets up a wireless network is it possible to set up filtering software to block certain sites?"
Yes, but odds are you're going to end up blocking out legitimate sites as well, because most filters use keywords.
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Re: I don't know...
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Free WiFi
There have been days when I have sat for hours, making multiple purchases of food all under the watchful eyes and smiling faces of the managers and employees of this progressive company.
Starbucks lost my business the minute I found Panera Bread.
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Re: Freeloaders...
If I was a business owner it would be to my advantage to bring in the highest paying crowd available. You aparently are not it - it's those freeloaders that get addicted to the free WiFi and buy a cup of coffee once-per-hour on a routine basis
Just because you don't like the change in atmosphere doesn't mean the business made the wrong decision - it often means you're no longer the target market they want to focus on.
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I sense a pattern
Resturants and coffee shops make money from table turn. The more people through the more money they make. Free Internet makes people linger longer. I don't think they are going to buy two lunches just because there is free internet.
Also, you can filter the internet anyway you want. Including specific file types. For example you can block the download of any .mp3 files. You can also filter any specific site types or all sites.
A smarter way to provide access for free would to still lock down the access, but give paying customers a username and password as they sit down to order. You can also put a limit on the access and cut people off at a specified time, say when they stopped buying stuff and were just sitting there taking up space for long periods of time. Also, if you block all sites except business related and education related you can probably prevent some free loaders and get the customers you were looking for when you provided free access.
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Re: I sense a pattern
how exactly can you define and block a "site type"?
"Also, if you block all sites except business related and education related"
And just exactly how do you determine what those are?
So basically you are saying offer free wifi but don't let them access anything?
I think it kind of defeats the purpose of the free wifi in the first place, not only will you prevent freeloaders, but anyone else who can't access what they want.
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Re: I don't know...
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speaking for myself...
The Starbucks coffee shop model is NOT about maximizing traffic and "table-turn". If it was, they wouldn't have fireplaces and cumfy chairs to sit in. They are about providing user experience, and free WiFi is simply an extension of that experience (well, while it's not for Starbucks, it certainly is for a host of their competitors, now lincluding Tully's).
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Coffee is Murder
Until then, the "used to be my favorite place" syndrome will carry on. If they cared about you and your cozy factor, and not about profits, they wouldn't have put up a sucker-link for the masses.
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Hmmm...
As far as legal liability, the plaintif will have to prove that the coffee shop knowingly allowed the culprit to perform the downloads. Kinda tough to hold up in court.
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FreeWifi-loaders
Unfortunaltely free loaders dont purchase one cup of coffee. I own a large coffee shop, it has two rooms, the second not visible from the service counter. It is common for laoders to come into the shop and sit in the back room area out of view of my employees.
On any given day, I will walk into the back area and count ten to twenty customers (I had as many as 50-60) sitting at tables, eating lunch from another business 's not drinking or eating anything at all from my shop.
They vary from students to business people. I once even found a guy running his struggling website devellopment business out of my shop. Downloading and uploading large files and even having meetings there. He would have meetings in the back area!!! When I confronted him , he felt that the 5 dollars or so he spent a week made up for his mooching power and a four top table for ten hours a day. These people eat up band width and slow the internet down for everyone.
I think that restaurants like panarabread have a diffirent situation because the per customer purchase is higher. Remember that the average coffee shopp customer will spend under four dollars. That means that we need higher volume than a restaurant to make the same profit.
These cases are extreme perhaps. However the problem of advertising free anything is that it draws people who have less disposable income. On average I would rather have five people come to my shop, spend four dollars, sit for an hour and leave in a single day, than one person come to my shop five days a week, spend 4 dollars a day but sitting there for 8 hours.
The solution to this problem seems to be giving away internet access with a purchase. We are contemplating just printing a unique wep code on receipes
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Limited Access
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Free Wi-FI
Both these establishments have made me a loyal customer
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15 minutes for a small cup of coffee.
40 for a sandwich.
20 for a desert.
Etc.
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Re: Re: I don't know...
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'freeloaders' should follow restaurant etiquette
However, if nobody is around, the restaurant isn't going to care if you take up a table and have an occasional beverage.
As long as most patrons are being considerate enough to allow other patrons to come in and have a table, then free WiFi will benefit both patron and business owner.
However, if you and your buddies insist on clogging up the local coffee shop with your freeloading butts, don't be surprised when they start to charge for the service.
--sd
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WiFi * at no extra cost *
* Access at no extra cost *
I strongly agree with providing Wifi at no extra cost and disagree with those who thinks that it becomes a place where geeks frequent, with their head buried in their screens.
Well, I am an IT professional and I always like to visit where I can stay a little bit longer because my handheld is fired and is connected to my office network. That ways if I had to hang around with my colleagues I still am getting live alerts through my custom applications.
So, thinking out of the box and providing wifi access while you can is a good omen..
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It's Gotta Be Free?
Unlike most local shops, Panera almost always seems to be busy. Could it be?
NAH.
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Why would a marketer want to target that market?
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This isn't a hard concept
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Free with an an asterisk*
Would that solve the problem?
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Re: Re: Freeloaders...
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Re: Post 28
If I wanted to pay for T-Mobile on a monthly basis, I would be paying more for their service that I could access probably tops 1-2 hours per day than I pay for my 6 Mb connection at home, and I'm home an average of 8 days per month (exactly the t-mobile target demo.) That's an insane service-to-value ratio that I'm dumbfounded people accept.
I jump at the chance to spend my cash at locations that offer free wi-fi!
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Look at it from a business perspective
I like where they are going with this and I hope that more coffee shops (esp in the Seattle area) adopt this trend.
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I refuse to pay for WiFi access.
When I want to use WiFi, I find out who has it for free and use them... then buy something, like a coffee.
It's 100% logical. And even if you have one or two "freeloaders", having a few people in a restaurant / coffeeshop is a good thing anyway. No one wants to walk into an empty restaurant.
Free Wifi at businesses will be standard in the future. I'd say it might be about 3 years away. I think even Starbucks will figure it out eventually.
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I have lived all around the US and have been to hundreds of Wi-Fi coffee shops and restaurants, all you have to do to prevent freeloaders is make it customers only. I mean really-- what spots besides public libraries let people just hang out all day without purchasing something-- there are already laws to prevent that, it's called loitering.
I have never seen a free signal do anything but increase business, I have seen the removal of these services crush a business as all the customers seek out the best value.
Right now I live in Portland, OR and a coffee shop couldn't stay open for three months without free Wi-Fi service, it's just that simple.
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Re: Re: Freeloaders...
The ASP is way down, as most people buy ONLY coffee, whereas before, and at other places WITHOUT WiFi, people buy a lot more, such as food and there is much more turnover. 20 people taking up 40 some-odd seats makes the whole situation much worse.
Not only has it become a highly anti-social place, but the owner is not making nearly as much as he did when WiFi was not free. However, since the place is now pretty much known for free WiFi, he won't have any business where he to turn it off. Since he can't afford that dip, he just tries to introduce more and more stuff, hoping that some people will buy more and even out his income.
Mirroring this, the owners of another cafe near me turns off WiFi at 11am because they too where having ASP problems with customers sitting all day after having bought one drink. They have it on in the morning so that business people can check their email, etc over coffee, but turn it off at 11 so that people don't stay during lunch and take away tablespace from lunch customers.
The reality of the restaurant business is that you need high turnover (on a per table basis) in order to improve your margin, as your inventory is actually your seating capacity. Four person tables with only one person who sits there for hours is a sure way to loose money, which is why most restaurants in the US try to hurry you along....
In places with a low density of roaming laptop/WiFi users, free WiFi may be a good way to attract business, but in places like San Francisco, with tons of tech savvy students, roving consultants, dot.commers and work-at-home types, it's a bad idea.
Chris.
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Free it is & free it will always be
I just told cingular to keep there POS 8125 ppc because they failed to tell me it would cost 1cent per kilobyte-lol. I won't pay anything but the electrical/battery cost for any portable wifi device EVER. Nor would I ever pay to listen to my favorite radio station.
People who do pay for it are either stupid, desparate or forced to. I don't care how much one is worth.
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security
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dirty facility
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