How to Calculate ROI for Wireless LAN
If you are planning on setting up a wireless local area network (LAN) access point to generate revenue for your business, it would be wise to perform a cost-benefit analysis to see what type of ROI (Return on Investment) you can expect to get. This will let you know whether it would be beneficial to charge for wireless LAN coverage, and, if so, how much.
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Instructions
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Calculate the monthly cost you are paying for your business Internet service, based on your Internet subscription information.
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Take the number of customers you have, on average, and conduct a survey of those customers (through mail, email, phone, in person, etc.) and inquire whether they would be willing to pay for wireless LAN Internet access. Provide them with several cost choices. For example, you might offer service for $5 per day, $10 per month or $2 per hour, etc.) and ask them to provide you with their choice or tell you if they would not be willing to pay for the access. Average this data out and find the most popular choice.
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Ask your customers whether they would spend more or less time at your establishment if you provided free wireless Internet service. If they reply that they would spend more time, ask them how much. Average these answers out to find out how much more time each of your customers, on average, would spend in your establishment.
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Look at your customer data and calculate how much money each customer brings in to your establishment across a given time period. You will use this information to determine how much more additional money people will bring in, assuming you provide free wireless Internet service and people spend more time in your establishment. For example, if, on average, each current customer spent 30 minutes in your establishment and spent $5 during those 30 minutes, then if providing free wireless Internet would increase the time spent to 60 minutes, you would have a potential $10 spent by that person.
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Calculate your potential ROI for two scenarios using the formula provided in the Tips section. First, calculate your ROI for the scenario where you charge for Internet access, based on the information you gathered from customer surveys. Then calculate your ROI for the scenario where you provide free wireless Internet service, assuming that if you do so, your profits will increase proportional to how much longer your customers spend in your establishment.
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Tips & Warnings
The ROI calculation formula is ROI = ([Profit -- Investment]/Investment)*100. Your profit, in this case, would be your potential profit from implementing free or low-cost wireless service. Your investment would be the cost to implement such service, including your monthly Internet provider costs.
