Tuesday , May 28 2024

Loss Leading With Wi-Fi

Cafes starting to offer Wi-Fi for free to draw customers:

    AS the Wi-Fi trend sweeps through the air, one question appears to be cropping up with increasing frequency: to charge or not to charge?

    ….In a growing number of places, an alternative is available – at no charge. And not surprisingly, several are in Austin, one of the most wired places in the nation and now one of the most wireless, boasting a profusion of hot spots.

    One of them is Wild Wood, a small store that sells hand-carved animals from Oaxaca, Mexico.

    Wild Wood, which bills itself as an “art cafe,” serves not just coffee and desserts but full meals, all of them prepared in the store’s small kitchen. The owner, Joan Griffith, said she offered free Wi-Fi access because it was far more important to her to increase the number of customers than to make a little bit of money from an access surcharge. Besides, she said, free access breeds good will, which in turn breeds loyalty.

    ….Schlotzsky’s Deli, an Austin fixture, is another mecca for free Wi-Fi. Schlotzsky’s, a nationwide chain of sandwich stores that got its start in Austin, offers free Wi-Fi at 10 of its Austin restaurants, one in Houston and one in Atlanta.

    John C. Wooley, the chief executive of Schlotzsky’s, said he briefly considered charging customers for Wi-Fi access but quickly changed his mind.

    Mr. Wooley said each restaurant spent about $2,000 to get its Wi-Fi up and running, and another $300 to $500 a month for the high-speed communications line that provides the wireless access network to the Internet. His reasoning is similar to Ms. Griffith’s, but on a larger scale. Schlotzsky’s surveys over the past few months have shown that 6 percent of customers go to Schlotzsky’s for the free Wi-Fi. That translates to 15,000 customers per store per year. If each pays, on average, $7 for a sandwich and drink, that adds up to about $100,000 in sales per year.

    “That’s a really good return on investment,” Mr. Wooley said. [NY Times]

The beauty of Wi-Fi is that each incremental customer costs nothing extra, so the more the merrier, and those more and merrier people (6 percent more at Schlotzsky’s) are all buying the coffee, drinks, food or whatever else you sell. Sounds like a good plan to me.

About Eric Olsen

Career media professional and serial entrepreneur Eric Olsen flung himself into the paranormal world in 2012, creating the America's Most Haunted brand and co-authoring the award-winning America's Most Haunted book, published by Berkley/Penguin in Sept, 2014. Olsen is co-host of the nationally syndicated broadcast and Internet radio talk show After Hours AM; his entertaining and informative America's Most Haunted website and social media outlets are must-reads: Twitter@amhaunted, Facebook.com/amhaunted, Pinterest America's Most Haunted. Olsen is also guitarist/singer for popular and wildly eclectic Cleveland cover band The Props.

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