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What happens when a coffee shop gets too popular?

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I ran into an interesting situation last weekend and I’m curious to know what you think. Budding entrepreneurs, here’s your chance to come up with a brilliant solution to a business problem.

First of all, if you disregard my 8 Stupid Frat-Boy Business Ideas post and start a coffee shop, you may one day encounter this problem. It’s a good problem to have, but a problem nonetheless.

Last weekend, I was writing at a coffee shop where lots of people bring their laptops for the free wifi and food.

As I was writing, one one of the staff began telling people with laptops that the wifi would be turned off from 11:30am – 1:00pm. “Why?” one woman asked.

The poor waiter. He explained that the manager had instituted a new policy of turning off the Internet during peak hours. I’m pretty sure this is to dissuade people from camping out for hours at their tables with laptops. I’ve personally seen people come in, look around, and leave because there were no tables available. (In fact, this happened to me the very next day.)

The woman was furious. “I wouldn’t have come here and bought all this food if I knew I couldn’t get my work done,” she said angrily. All the waiter could do was apologize.

I see both sides of this decision.

Clearly, the manager wants to maximize revenues and doesn’t want to turn away potential customers (with $) because all the tables are full of laptop users who won’t get up (or buy anything). They’re worried, in other words, about turnover, one of the reasons that even popular restaurants can go bankrupt. Like I said, I’ve personally seem them lose revenues when prospective customers left because there were no tables left. If you measure success on a $/minute metric per table, the laptop users are probably very low-value customers.

On the other hand, the customers who bring their laptops in are loyal customers who, I’m sure, tell their friends about this coffee shop. This new policy squarely affects these loyal customers. Worst of all, there’s no way to announce this policy without sounding like a real asshole. For example, I saw a guy with a laptop come in 11:20am. What happens when the Internet goes down 10 minutes after he sits down? What are you going to say? Is the management going to put out flyers on all the tables saying, “There will be no Internet from 11:30am – 1:00pm” (because we want you to leave)?

Here are some possible solutions:

  • Continue allowing free access with no time limits. This maintains goodwill but you’ll probably bleed dry
  • Charge for Internet access (Starbucks does this)
  • Create a points system that gives people a variable amount of Internet access based on how much they’ve bought (“3 coffees = free week of Internet,” etc). My friend Chris Yeh came up with this one. As he said, “If you’re going to screw people, at least give them the impression there’s some way for them to avoid the shaft.” (Check out his brilliant blog)

What would you do?

[Update]: I told the coffee shop’s manager about this post and sent her a link. She responded by email: “Thank you so much for the link, and the feedback. It is a difficult balance to wanting to please the paying customer and the loyal regulars. I forwarded your blog to the owner, XXXXXX, in hopes that we can come up with a solution that everyone is happy with. I really appreciate you taking an interest, and enjoy talking to you on the weekends!”

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68 Comments

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  1. I think charging for wifi may have severe unintended consequences. Unless the cafe is making big bucks by charging for wifi, people who pay will be entitled to sit in the cafe all day long and not buy anything. It’s like the Freakonomics story about the day care center that started charging parents who were late to pick up their kids – more parents were late!

    The points system could work, but it would be hard to administer.

    What about having a set number of laptop tables during the mid-day rush? Say only half of the tables in the cafe are for laptop users during that time. If you want wifi, you can share those tables with others, but you have to make room for customers who want to eat or drink.

  2. There is an easy solution to this, while perhaps somewhat inconvenient. I’ve implemented this system in a couple coffee shops before. I install a hardware solution that controls access to the shop’s wireless network. To get access to the network you have to get a code from a waiter/server/clerk. These codes are unique per customer and can optionally have a time limit attached to them.

    The system I’ve put in place before does require some sort of purchase every hour (time period is determined by shop management). So when a laptop user’s time runs out, they simply purchase more food or beverage and receive a new code.

    I mentioned earlier the inconvenience as this does mean the patron would lose their Internet connection at the end of every specified time period and this might create undue burden upon the shop staff if wireless access demand is high. However, this is the ideal compromise for coffee shop owners everywhere to maintain that high value customer ratio.

  3. Charging for internet (maybe scale it up during peak hours) makes a lot more sense than turning it off completely.

  4. Argo Tea already has a system similar to your third suggestion. When you purchase something, you get a piece of paper with a password on it. You use this password to access their wifi network, and after (I believe) an hour, the password expires. If you want to stay online, you have to keep chugging tea.

  5. Personally, I’d segment laptop users to a specifc section of the cafe during peak times allowing non-laptop users to sit and inform the customers of this policy. I know space if cafe’s is at a premium, but in order to please both sides without having to resort to gimmicky marketing campaigns I think this could work better.

  6. Possibly you could configure the WiFi so that the users must log in to use it. Use dynamically-generated usernames that only allow one concurrent connection and expire after a day.

    Hand these out to people as requested. Don’t hand out any starting at, say, 11:00am. Hopefully there would only be a small number of people in the place at that time (before the lunch rush).

  7. When I lived in Paris, many cafes offered free internet access. They would give you a card with an access code that was worth a certain amount of time, maybe 30 minutes. After that, you had to go ask for another. They didn’t charge for the later cards, but it was enough of a pain that it would keep me from staying overlong.

    I think a better way to do it would be the last suggestion: for every $3 spent, you get 30 min of internet or similar. That would keep customers going back to the counter for another coffee or pastry.

  8. I’d put a code on the receipts that is good for one hour (or two hours, or whatever) of internet access. They you assure that the people who are there for a long time are periodically getting up and buying something and the person who is there a short time, gets the access he wants.

    Amanda

  9. Good puzzle. I call one idea the freeloader light.

    Each table would have a prominent red light mounted in the center. When a customer places or receives an order, the server presses a button for the corresponding table. The light turns off.

    Exactly one hour later, the light switches on automatically, blinding the occupant while shaming them for not buying more treats during that hour. The light could optionally spell out an insulting message.

    My other idea I call table bidding.

    In table bidding, any table that has been occupied for more than 30 minutes without an order is up for a challenge. At that point, anyone can walk up to the table and challenge the current sitter to a duel.

    In the duel, each participant writes an item from the menu on a slip of paper. Whichever duelist chooses the most expensive item wins the table. Of course, the winner also has to purchase the item. In the event of a tie, the current sitter wins.

  10. Panera has a different approach than all three you mention (and it’s one that I like and seems to work pretty well for them):
    – when you sit down to get online you are redirected to a Panera page before you can access the internet. It has a link to all of the legal jargon BUT right there in front of you it will say something like (this is not word for word – they actually have it worded really well) “Please sit at the smaller tables if possible so larger parties will be able to utilize booths. Also please be aware of peak business times…”

    They could have gone as far as saying “… if you want this service to remain free” but they didn’t. You have to click “agree” before you can access the internet.

    I know that there have been a couple of times I’ve gone into a Panera, sat down at a larger table because that was the only thing available (or in a couple of cases the place was so empty when I got there I didn’t feel like I was causing an inconvenience) and I moved to a smaller table when it became available or when business started to pick up.

    Once though I did actually have to leave though because the internet connection had slowed to such a crawl because of the number of people on laptops that it was wasting my time and annoying me instead of being a nice break from the home office. It wasn’t super busy that day but at a glance I counted 11 people with laptops which was a few too many for their little old DSL line at that location.

    Oh, and did I mention that because of how they are handling the internet access they get extra chances at branding and can also advertising to you? Check out the tasty looking connection page (this is the page you get after clicking “agree”):
    http://www.panerabread.com/wifi/connected/?bc=1176&pid=1

    One more thought on the wireless customers. I think people who sit down with laptops would be more inclined to get back up and get more food sometimes IF they felt safe leaving their laptop or “closing up shop” just to get one item. They could probably sell additional to these people if they either had some way of securing your laptop to the table or better yet sent someone out during slower times to see if they wanted to order anything else or needed their coffee refilled. If not done too often then it wouldn’t be a disrupting annoyance and might make the business more money or prompt some people to move along.

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