Why Provide Free WiFi?

By Kristopher A. Nelson
in July 2007

900 words / 5 min.
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Why should hotels, cafes, and other service-oriented establishments offer free WiFi to their customers?

Note: this post is from 2007. Evaluate with care and in light of later events.

Laptop at a Cafe
Image by workshifting via Flickr

Why should hotels, cafes, and other service-oriented establishments offer free WiFi to their customers? I know many places are scared of WiFi hordes descending on them and stealing all their tables and never buying more than a cup of drip coffee (a phenomenon I have never witnessed or participated in), but I’d like to present some good reasons why businesses should just give us free WiFi!

1. It’s reasonably priced
A DSL line is $50 or so a month, and should be fine for most smaller businesses, like cafes. A simple router for less than $100 will do fine as well. More complex setups (like hotels) will have more initial outlays, and may need a bigger pipe — but if enough people are using your Internet connection that you need to upgrade, then obviously it’s an in-demand service, no? And simple mesh routers are available from Meraki that could extend WiFi throughout many hotels without needing much infrastructure wiring at all.

2. It differentiates you
Starbucks/T-Mobile charge a fortune for their WiFi access. Offer the same for free, and customers will buy your core products from you. I certainly will (and do).

3. It isn’t your core business anyway, but it does boost it
Why charge when your core business is selling coffee or rooms? Focus on what you do best, and leave WiFi to be additional value that supplements your core offerings — like comfortable chairs or tables.

4. It’s the equivalent of a newspaper or book
Instead of drinking a coffee and reading a book, many customers today want to view their email or read their news online while they sip their coffee.

5. Customers hate to feel “nickel-and-dimed”
If I spend $250+ on a hotel room, I expect to have sheets. I also expect to have WiFi, not to pay $5 per hour. When I’m traveling for business, and absolutely need WiFi access, this is even more true. True, I can expense it, but why bother? I’d rather stay someplace that treats me like a valued customer. Or as Rafe Needleman wrote back in 2005:

Yes, hotel owners, I understand that you’re trying to make up for revenue lost from your usurious telephone charges, now that everyone uses cell phones for all their calls. But come on, those fees were ridiculous, too. When your guests pay for a room, the idea is that they are paying for the infrastructure. Try charging them for running water, air conditioning, or clean sheets and see what happens.

6. Billing is complicated, free is easy
If it’s free, customers are tolerant of problems. If it costs money, they expect a corresponding level of service. If they’re paying for a strictly regular 24-hour period, this becomes even more true. Any down time is costing them money, and you’d better be prepared to deal with that.

7. If you give me a reason to stay and buy your product, I will
I never buy more than a coffee (at most…) at Starbucks. With WiFi so expensive there, I have no reason to stay. What am I going to do, stare uncomfortably at other people? Fine, I can read a book, but when I’m supposed to be working anyway, why not let me stay and do it on your turf? I’ll buy more the longer I’m there. If I don’t, give me a nudge after an hour or two, or if you need the table. I’ll understand. Treat me respectfully, and I’ll respond with the same.

8. If you have tables, let people use them!
Why do you have tables if you don’t want people to sit in them? And if you’ve never noticed, crowds attract crowds — if you’re always busy, people will want to come. Of course, you’ll need to manage this respectfully and creatively, but aren’t customers the reason you’re in business? Without us, how are you planning to make money?

9. If you have a problem with freeloaders, get creative
Cover power outlets if you have to (I hate that, but I get it). Hand out daily passwords when people buy something. Arrange your furniture to maximize space. Talk to your customers! Ask them for help.

10. You can always change your model later
If you’re a cafe, free at the beginning is probably your best bet as startup costs for a small space are relatively small. For a hotel, I get it, infrastructure is expensive, so you might need to have some way of recouping your costs beyond room rates (if you charge $250+/night, though, I think you’d better rethink this math).

But keep the “free” idea in mind; customers like it when things are free! And if you get bogged down in users and need to start adding capacity and spending more money, well, think first about how much extra you might be bringing in due to the WiFi before you think about charging.

And if it is time to think about recouping costs — perhaps WiFi has now become part of your core business — think about keeping it reasonable, offering it free with a purchase, or offering different levels of service. Your customers will thank you!