In most WiFi cases, to set up a self-funded model of WiFi, usually businesses choose between a free WiFi service that displays ads or they go with the pay-to-use Wi-Fi model.
Paid version guarantees better speeds or longer duration of access for the guests. Whenever a user is asked to pay for accessing the Internet via guest WiFi, it is a form of paid WiFi. Direct monetization of WiFi falls under the Paid category. In terms of security of WiFi, whether it be paid or free an adequate level of security is explicitly assumed from the side of the customer.
In this article, we list out three business models of Paid WiFi:
1: Pay-to-use WiFi
Venue Owner (VO) asks the guest to pay when they want Internet access. This was a model that was popular during the early 2000’s. The customer walks into the premises, pays for the WiFi and then gets access to it. However, such models don’t encourage customers to recommend your venue based on WiFi. It’s a rudimentary model that has now become scarce due to newer models being used.
2: Freemium Model
In this, the VO gives access to guests for a certain duration after which guests will be required to pay to continue using the Internet. This helps the VO to make money while at the same time collecting guest information. This can be seen in some airports as well as hotels.
3: WiFi Upgrade Model
Free WiFi is provided at a certain bandwidth to guests, however in case of a guest wanting to use higher speed of Internet they must pay a certain fee. This can be implemented in hotels, as some guests may want to use the WiFi for business purposes, in which case they can upgrade their WiFi. Other guests can use the WiFi as it is.
Paid WiFi is a means to counter the popular belief that customers will use the WiFi and walk out of the venue without purchasing anything. Although paid WiFi is a way to earn revenue, the trends of the industry indicate that Free WiFi models work better from a customer point-of-view, as customers think of WiFi as a commodity that should be free of cost.
“As many as 62 percent of businesses pointed out that the customers spend more time in their facility or shop if free WiFi access is offered. Around 50 percent of customers spend more money as well.”
-Steven Scheck, smallbiztrends.com
Within Free WiFi there are two business models:
1: In-House/ Captive Promotions Model
In this method, guests login with their social media IDs or some sort of form login and use the WiFi while on premise. During their WiFi usage, guests will see notifications of on-premise discounts, offers, events etc. This model reaps benefits in two ways.
Firstly, the guest’s on-premise pattern and their demographic data can be collected. In-house advertisements can be used to direct the flow of traffic, and to increase sales through limited time offers and deals that are pushed to consumer mobiles. Not only does this improve sales, it also gives the management a way of influencing the crowd without appearing obtrusive.
Secondly, they can segregate their crowd based on different parameters such as frequency of visit, location, demographics, customer preferences etc. This data can then be kept for future reference.
2: 3rd Party Promotions Model
In this model, the system is the same, however promotions are sourced from 3rd parties, which pay for the ad space. This could also include proximity promotions wherein organizations and businesses around push their promotions so customers nearby on large public venues can be notified of it.
As WiFi is widely regarded as a free commodity by the consumers, the 2 business models of Free Guest WiFi Solutions are more popular within the marketers. Not only does it create a new platform for promotions, but also acts as an alternate revenue stream ensuring happiness for the business and the customers. The space of Free WiFi enabled personalized promotions is enhancing day by day with innovations in progress specifically around customer data analytics.
So, if you’re asking, “Is it the right time to adopt Free WiFi enabled promotions technology?”
We say, “The time is now, indeed.”