Free hot spots pay dividends - Computerworld

Computerwolrd has a great article about free WiFi hot spots. The author has taken a look at the ROI on providing free internet access through WiFi, and has found some interesting results:

John Wooley, chairman, CEO and president of restaurant chain Schlotzsky's Inc. in Austin, isn't so shy in sharing details of what he calls the "strong ROI" from the company's free Wi-Fi service. Schlotzsky's currently offers free Wi-Fi in 30 of its 600 company-owned or franchised Schlotzsky's Delis. Wooley says he figures that the free Wi-Fi results in an additional 15,000 visits per restaurant per year by customers who spend an average of $7 per visit. That means Wi-Fi service brings in more than $100,000 per year per outlet in return for an investment of about $8,000 per restaurant for wireless infrastructure, Wooley says. The largest continuing cost is backhaul to the Internet over 1.54Mbit/sec. T1 circuits, Wooley says. Since the cost of a T1 circuit varies from $300 to $700, depending on what part of the country you're in, he says Schlotzsky's would average those costs to induce existing franchisees to offer the service. (New franchisees will be required to offer free Wi-Fi, Wooley notes.)

Other interview subjects have reported that they consider WiFi to be a required addition to their overall service package:

Panera Bread Co., based in Richmond Heights, Mo., has also embraced free Wi-Fi as a marketing tool and plans to offer the service in 130 of its 600 bakery cafes by year's end, eventually extending the service chainwide. Ron Shaich, the company's chairman and CEO, says he views free Wi-Fi as an amenity that has already started to attract and retain customers at what he calls a "minimal cost." In fact, Shaich considers free Wi-Fi to be such an essential marketing tool that he dismisses any discussion of ROI. "What is the ROI on a bathroom?" asked Shaich, pointing out that the day of pay restrooms in restaurants has long since passed.

This is what I've been saying all along. I don't think WiFi access will ever work as a pay service, but as a free service it will attract customers, give you a marketing oppertunity, and encourage your customers to stay and spend more money than they nomally would.