We're Still Debating Whether Or Not Free WiFi Is Good For Business?

from the wasn't-this-settled-already? dept

Wed, Aug 13th 2008 8:15am — Mike Masnick

We thought that the whole debate over whether or not free WiFi helped businesses like restaurants had been settled years ago when restaurants like Panera shared some data on how much more business it drove. However, it seems some are still resisting this, so we get yet another series of articles asking whether or not free WiFi is good for business. There are definitely more businesses offering it these days, so that should be something of an answer itself. But it's surprising to see someone in the article include that old line about how restaurants are worried about people clogging up its tables. We've seen reports in the past showing that free WiFi actually tends to bring in people during off-peak times. As for the peak times? While there may be some freeloaders, it's not all that pleasant for them to hang out in a crowded restaurant or cafe either.

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Filed Under: business models, free, freeloaders, restaurants, wifi

21 Comments

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Anonymous Coward, 13 Aug 2008 @ 8:55am

THIRD
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Hulser, 13 Aug 2008 @ 8:57am

The Third Place
This quote from the linked article gets to the heart of the matter...

Tom Gergets, director of technology and infrastructure for McDonald's U.S. operations, said in the Network World article that "people are using restaurants very differently these days as lifestyles have changed. We've really had to contemporize and create modern, relevant in-restaurant experiences."

I think some restaraunts are realizing that if they can be a gathering place instead of just a place to eat -- the so-called "Third Place" -- they have the opportunity to make more money. It seems rather dumb to throw potential customers out of your place of business because they're using some of your bandwidth and don't happen to be buying anything at that particular moment. Why wouldn't a business owner want somebody in their place who at least has the potential to buy something rather than them going somewhere else? Is space really that big a deal? If so, buy/rent a bigger place. I would think that too many people in your restaraunt is the kind of problem you want to have.

For example, I have a Panera bread near where I live. If I go there earlier on a weekend day, I'll almost always see a group of students meeting there. It's perfect for those group project assignments. Everyone knows where it is, it's a neutral area, and you can get coffee and food while you're there, and you get free WiFi. Sure, you might have someone who "freeloads" and doesn't buy anything, but chances are someone is going to buy something. It's the proverbial win-win.
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hegemon13, 13 Aug 2008 @ 9:04am

Re: The Third Place
The only problem with that quote is that McDonald's is not very contemporary at all. Though they started out offering free WiFi, all the locations around me now are ATT hotspots that you have to pay to access. So much for creating a "modern, relevant" experience.
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Matt, 13 Aug 2008 @ 9:20am

thats called greed/laziness
See, instead of possible interesting and revenue generating ideas (aka have special coupons/discounts available through a mcdonalds wifi only homepage that loads automatically) which would drive people who are techsavvy to mcdonalds even from nearby business, they instead go for greed. The "lets charge them for this", instead of "lets see if we can make this work."

Sit someone in one place for 6 hours, even if its wifi mooching, and they're going to buy/eat/drink something. Heck, the fact that americans are supposedly getting fatter and fatter should guarantee that even moreso.
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Hulser, 13 Aug 2008 @ 9:20am

Re: Re: The Third Place
Though they started out offering free WiFi, all the locations around me now are ATT hotspots that you have to pay to access.

I get the feeling, based on reading the article, that it's just a matter of time before most places offer WiFi for free. It's related to the whole discussion around micropayments. Even if McDonald's charged a very small amount for its WiFi, Panera is still free and therefore much less hassle. As in, the difference between 0 cents and 1 cent is incredibly more than the difference between 1 cent and 2 cents. I think the next step for McDonalds or any business that takes this "third place" concept seriously is to have free WiFi, especially as the number of WiFi capable devices continues to grow.
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Hulser, 13 Aug 2008 @ 9:24am

Re: thats called greed/laziness
wifi mooching

Nice. Sounds like a way to describe a modern day Wimpy from the old Popeye cartoons...

"I'd gladly buy a hamburger from you on Tuesday for some free WiFi today."
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Esahc (profile), 13 Aug 2008 @ 9:25am

Re: Re: The Third Place
All the McDonald's, & Jack-in-the-Box's in my area have free WiFi, along with many independent coffee shops & even some bars.

I love my town.
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Anonymous Coward, 13 Aug 2008 @ 9:30am

Re: Re: The Third Place
one of the ones near me has a large plasma screen TV and a fireplace in it. I don't know of many places besides bars that have that.

that said, I still hate McDonalds food and I haven't been to one in months, if not years.
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Budrick Allen, 13 Aug 2008 @ 9:40am

For years now I've made it a point to patronize businesses offering free WiFi, regardless of whether I have a computer with me or not. I know for a fact that I've directed several hundreds of dollars annually to such establishments for providing "on the road" conveniences... from iHop in Topeka, Kansas, to coffee shops in San Diego (several weeks/months in each location, as just one example). I've caught up on important "must" do email while waiting for a steak dinner at iHop, for example (traveling). Another place I had my daily morning coffee and roll (over $1,000 annually), yada yada...

It certainly has been working as an incentive for me for as long as I remember (but then again, I am getting old, so my mememory... oh, never mind :)
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Sierra Night Tide, 13 Aug 2008 @ 10:01am

free
I rarely pay for wi fi when I travel. The only time I di pay for it is when I am lost and the locals have no freaken clue how to get somewhere outside their 2 mile mind set. On the other hand, I have stayed much longer in a cafe and purchased lunch when I was only planning to buy a cup of tea or coffee.

I have met some wonderful folks at locations with free wi fi and have had some great food / drinks because I only went to the place of business because it had free wi fi.

BUT if your free wi fi connection is slow I'm outta there and no matter how good your food and or service is I'm not staying.
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Anonymous Coward, 13 Aug 2008 @ 10:30am

Me and the guys I work with go to Starbucks for free WiFi. We are a group of network engineers that need a good connection to work. I would never go to a Starbucks if I could not get connected.
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Dave, 13 Aug 2008 @ 10:42am

go backwards... great idea!
All right McDonald's, charge me, baby! I live in a town where this kind of bonehead market dept. thinking is common, but I guess it's really everywhere.

1. All file-sharing: bad. 2. Piss off and confuse website visitors by having all links open in new window so they can't leave our precious site. 3. Charge for wifi for new revenue stream because manager can't stand freeloader in cafe.

These businesses will gradually lose market share or go extinct.

Why not have some fun with the wifi thing? If you have a freeloader, just get some staff to stand right there and start various forms of ridicule until they leave! Just standing there with a dirty look is a good start. Or even just run the vacuum cleaner right next to them so their precious music is inaudible. If the cement-head doesn't grasp that, move up to making jokes about them, then finally stick your face right up to their monitor and loudly say "not looking at your usual child porn today?"
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Ben Stiller, 13 Aug 2008 @ 10:49am

I mean come on
Even a "retard" knows that charging for wi-fi is stupid. The only places I have seen that charge for wi-fi are company chains. Every mom and pop coffee, eatery or what not that has offered wi-fi, has it for free.
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Anonymous Coward, 13 Aug 2008 @ 10:52am

Re: go backwards... great idea!
I hope that last part is a joke, the "freeloaders" are a very small percentage of the clientele and if you treat them poorly you can drive away prospective people. as has already been mentioned people sometimes come in and will sit for an hour or so before ordering, but that is fine, you don't pay for bandwidth by every megabyte downloaded (thankfully) so they aren't draining your resources and have the potential to draw other customers.

true customer service is a dying art form. it used to be that people would pay a higher price for the same quality just because the customer service was outstanding. we have a restaurant where the staff knows all the regulars by name and what their usual food and/or drink is. they are also nice to the people who just come in to sit because they sometimes order stuff and don't cost them anything, but it is the only place like it around here, why have people lost the view that everyone is a prospective customer and to be treated with the utmost courtesy and respect?
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Laura, 13 Aug 2008 @ 11:19am

There are a few Starbucks that I won't bother to go back to because the times I've gone in to get coffee and sit down for a moment, all the tables and chairs were taken by people with laptops, none of whom were eating or drinking anything for the entire time I was there.

Bringing in people on off-peak hours is good; driving away people at peak hours is not as good. But this is something that could be controlled by the management; other places I visit post notices that patrons are limited to half an hour without ordering anything during peak hours, and that seems like a good compromise.
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wifi junkie, 13 Aug 2008 @ 11:38am

wifi in chain cafes and restaurants
sadly enough that places like barns and nobles, Mcdonald's, Star Bucks claim the free wifi but you have to pay for AT&T.

I go to our local mom and pop coffee shop and connect for free.
I echo everyone else saying it is stupid to pay for wifi when I pay for drinks.
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Heff, 13 Aug 2008 @ 11:43am

On the other hand...
I love free WiFi as much as anyone, but if I can't have
a place to sit while I consume my {Coffee,Lunch,...}
I will (and do) move on to another place. Where I work,
the businesses are jammed during peak times to a ridiculous
degree. If I was managing one of these places I'd be sorely
temped to provide WiFi only during non-peak times.
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drtaxsacto, 13 Aug 2008 @ 11:45am

Free WIFI as a consumer choice
For me free WIFI drives me there as a consumer. Period. I agree with a couple of the commenters that between a paid service and a free one, I will choose the free. My phone seeks out those spaces that are unlocked - and they get my business.

Some offer free WIFI but ask you to get their password - that is fine too. But the free is what I seek and use to consume.
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Tom Wailgum, 14 Aug 2008 @ 8:38am

Businesses still think about Wi-Fi costs...
As the author or the article and frequent free Wi-Fi user, I couldn't agree more with the majority of your comments that free Wi-Fi should be a standard offering. However, when you look at industries outside retail and restaurants -- airports, hotels and hospitals -- they still charge for Wi-Fi service.

One thing that I maybe didn't draw out enough in the article was that -- whether right or wrong -- businesses (especially the large chains) feel that SOMEBODY has to pay for the Wi-Fi service -- they feel that it's expensive to set up and maintain Wi-Fi networks and access points and then they get into questions of: who is going to be the defacto help desk if the network goes down or there's some type of security-related issue? Their internal IT department? Joe working behind the counter? That all costs money. Which is why the majority of big chains have outsourced the entire operations (networks, help desk) to third parties. They want to offer the service (they know it's important), but they just don't want the perceived headaches that go along with it.
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creig, 20 Aug 2008 @ 2:30am

wi-fi access in restaurants
if restaurants want to provide free wi-fi to bring in business then they only need to apply some rules for the free access.perhaps if possible, give them their own space.restrict them to the bar or create a bar or area for these users.bottom line is the business has to decide if providing it free justifies the business it brings in.if it does make the changes so it does not impact the patrons that only came for the food and drink.not rocket science here guys .
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Nick Burns, 26 Aug 2008 @ 11:04am

Supply and Demand
I'm surprised the marketing departments of the evil corporations haven't stumbled on this idea: How about making the WiFi free when no one is using it. Free WiFi draws in customers. Once you reach a certain level of usage (peak-times), the system kicks into billing mode - a few cents per minute of use or charge per kilobyte. Pay WiFi discourages the moochers from mooching too much and creates a secondary revenue stream during peak hours.

As is customary on Techdirt, I'm now going to patent that system and sue anyone who tries it.
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