This is a great example of how quickly business assumptions change, and how badly we can screw up just by assuming the status quo. I just read Coffee Shops are Taking Wireless Off the Menu. It reports how coffee shops are turning away from free wireless. It’s an interesting commentary on changing times, but, much more important, a really good business reminder. The LA Times reports:
Coffee shops were the retail pioneers of Wi-Fi, flipping the switch to lure customers. But now some owners are pulling the plug. They’re finding that Wi-Fi freeloaders who camp out all day nursing a single cup of coffee are a drain on the bottom line. Others want to preserve a friendly vibe and keep their establishments from turning into “Matrix”-like zombie shacks where people type and don’t talk.
That shift could gather steam now that free Wi-Fi is less of a perk after coffee giant Starbucks stopped charging for it last month.
Put yourself in the place of coffee shop owners. Just yesterday, free wireless was a feature, a sign on the outside window, a customer lure. You just blink, and now it’s no wireless instead. Business climates, competitive environments, customer loyalties, and customer preferences changed in the blink of an eye. Suddenly, what worked isn’t working anymore.
Think about the rise and fall of direct mail marketing, Web banner ads, V8 engines, artificial sweeteners, TV dinners … we’ve all seen that happen so many times. In business, you keep your mind open. Revisit your assumptions as often as you can.
Because something similar is about to happen in your business. Or maybe it already did. Maybe what you think works, what used to work, isn’t working anymore.
[…] Advice, Business Management, Business Mistakes I posted Beware of What Used to Work But Doesn’t Anymore a couple of weeks ago on this blog, using a change in coffee shop trends to point out the danger of […]
While you need to be conscious of the superficial changes and trends, it’s also very important to keep in mind that there are fundamentals that NEVER change. Wisdom is today what it was 3,000 years ago in King Solomon’s day. Sales and leadership today are built on the same principles as they always were.
I say this because there is no shortage of people out there warning about how the world has changed and how what worked in the past doesn’t work anymore.
Often, they are consultants looking to make a name for themselves on the cheap. Other times, it’s innocents with a narrow perspective.
Just recently there was the growth consultant in Forbes claiming that focus just doesn’t work anymore. (I had my say here https://bit.ly/cufDZv ) And before that a leadership consultant claimed that “The time of the great leaders like Churchill, JFK, FDR, and Golda Meir, is over because the world is too complex for one individual to know everything.” (I tore into that over here: https://bit.ly/cRkLmd )
Businesses who rushed into wifi, or any fad, because everyone is doing it were at the mercy of change then as they will be now. But businesses who took the time to think it through then, to understand their customers and so on, will always be more stable.
No argument with your point. What I say here is in addition. And I’m not lumping you together with the two I referred to above. I read your articles almost daily.
Thanks Dov, good addition. Tim
As I read this post, the first thing I thought of is a simple solution of that problem, and then — quite expectedly — read that solution in the first comment by Kathleen. 🙂
WiFi in coffee shops is today’s equivalent of having a free copy of the newspapers (still practiced by many shops). But while newspapers are limited by their nature, WiFi (in other words the Internet) isn’t, and it only makes sense for the owners to somehow limit it while keeping it free. With a time-limit (for whatever period works best in a particular shop) the WiFi returns from being a drain on the shop’s resources to being an incentive for the customers, boosting the revenue.
A nice subtle wake up call Tim. I do wonder how much research went in to the coffee shop Wi-Fi offering before it was implemented. It also begs the question, how much research and analysis was done before they began pulling the plug.
Did they assume the implementation would work and then make the same mistake by assuming it wasn’t working?
For example, some metrics you can’t realistically identify. For instance, some people avoid empty restaurants and coffee shops because they presume the service and/or food isn’t top quality. It’s difficult to calculate the impact of keeping at least a few people around at all times.
However, at the end of the day, if they take all of their inflated costings into consideration and find that the introduction of Wi-Fi has directly resulted in reduced profit, it is not a difficult decision.
I don’t see how eliminating free Wi-Fi is a smart marketing decision. Most customers today expect it — I certainly do. It may generate a news story but I’m not sure it’s good publicity.
In fact, the “changing business climates, competitive environment, customer loyalties and customer preferences” you mentioned require giving the customer more — not less.
There’s a 24-hour coffee shop in Nashville that came up with a solution that works for everyone: you can sit there and nurse a single cuppa all day if you want, but if you want free wi-fi, you only get it one hour at a time (so you have to purchase something every hour).
I’ll admit it gets a little tedious having to stop to make another purchase each hour, but I totally understand why they do it. And the atmosphere is so great, I don’t mind spending the extra money.
Hmmm … Kathleen, Thomas, I don’t run a coffee shop myself, and I prefer to have the wireless there too. What I saw in this case is an example of how, as a small business owner, things that you’ve always assumed can change quickly; and if you’re not watching, doing what used to work can be a mistake. What I like about the coffee shop example is that it’s there, showing up as a news story.