Based on customer demand, Schlotzsky’s rolls out free wi-fi to 38 sites

Noting that 40% of its customers cited the free wi-fi as one of the reasons they chose to dine at its 11 restaurants in the Austin, TX, area that offer wi-fi, Schlotzsky’s is expanding the service to a total of 38 locations in six states. Schlotzsky’s makes wi-fi, or wireless fidelity broadband Internet access, available at no charge through several in-store computers as well as through customers’ own wi-fi-configured laptops.

"We get incredible heartfelt 'thanks' from customers for making free wi-fi available, and they reward us with their business," a spokeswoman says. "It has also extended our business beyond the lunch hour so that the restaurant feels alive at all times."

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Schlotzsky’s also notes that 6% of customers in its wi-fi restaurants have cited the service as the key reason to chose to dine in one of its restaurants, which specialize in serving deli-type sandwiches.

Although Schlotzsky’s has been struggling financially – it posted a net loss of $2.8 on revenue of $13.8 million for the third quarter ended Sept. 30, compared to a net loss of $240,000 on revenue of $15.1 million for the year-earlier period – it says the free wi-fi service has proved itself as an effective marketing tool for attracting customers and keeping them around longer.

"The Schlotzsky's business model is all about customer service, attraction and loyalty," the spokeswoman says. "When customers are pleased, they visit more often, stay longer and buy more. While some other companies are trying to figure out how to charge for the service, we think our approach gets closer to the true potential of the wireless revolution." Other retailers like Starbucks Corp. offer in-store wi-fi access, but require customers to first subscribe to a wireless service in order to access it.

Schlotzsky’s is also using wi-fi to build its relationships with its restaurants’ surrounding communities. In its home base of Austin, it’s underwriting the purchase of wi-fi antennas for the city’s 22 libraries. It’s also experimenting with providing wi-fi access for the surrounding communities up to one quarter mile from its restaurants.