Why CMOs are getting excited about WiFi

Last week I interviewed David King, chairman and CEO of WiFi technology company, AirTight Networks. He's in Australia for a retail trade show, which begs the question: what's the CEO of a global WiFi company doing at such an event? The answer demonstrates yet again how digital technology is pervading every aspect of business.

AirTight Networks is a decade old company that started life focussed on wireless intrusion prevention systems. These were based on a WiFi sensor, essentially an access point but one that provides no communications services. Instead it monitors the airwaves for rogue hotspots, honeypots and any other attempts at compromising a network's security.

The company's market was high-end enterprises - those for which the security technology built in to even enterprise grade WiFi products was inadequate. In 2008 it introduced a cloud-based version of the management software in a bid to garner customers among smaller enterprises.

That move was not particularly successful but, then according to King, "The PCI standard came along in 06 or 07 and in 08 they added a WiFi scanning requirement because this guy named Albert Gonzalez managed to hack into 10 different retail networks driving around Miami and was able to steal 170 million identities."

Now, King says, to maintain compliance with PCI companies using wireless technology for their eftpos terminals must scan for rogue access points and other wireless intrusion events every quarter.

This generated demand for AirTight's cloud based intrusion prevention technology and on the back of that it AirTight entered the mainstream enterprise WiFi market by evolving its WIPS sensing device into a combined access point and sensor. It also added functionality to the cloud-based monitoring software to provide additional analytics functionality - essentially repurposing information from WiFi devices that it was already gathering for security purposes.

This enables retail and hospitality organisation to establish direct links with customers once they can be persuaded to access the in-store WiFi. Then every time they return if WiFi is active on their device it will automatically log onto the network. Organisations can set up loyalty programs, offer coupons and promotions and generally know when and for how long customers are on the premises. The AirTight system enables a network comprising WiFi hotspots in multiple locations to be monitored from a single console.

You probably won't see much of this in Australia yet. It's early days. King says the company is "in the throes of winning several customer facing organisations, chains of coffee shops, etc. The same type of customers that we now have in the United States." There it has been deploying such installations for about two years.

One of its first customers to use the technology for marketing purposes was Noodle & Company, which operates a chain of 300 fast food outlets. According to King, "In every shop that installed WiFi the signup to loyalty programs increased 50 percent. They found that the people in the loyalty program spend on average 25 percent more. So when you do the maths, the system pays for itself in a store in a day and a half." There's a case study here. 

As a result, AirTight has switched its marketing focus, hence its presence in an Australian retail show. "Our go to market strategy is now targeted at CMOs instead of the IT shop," King said.

"We were trying to empower the networking people and the CIO in an organisation to add some value to bring to marketing, but we found that getting the digital marketing team or the CMO involved early on it makes the sales cycle move a lot faster. And we found that, for a lot of our customers, CMO has more budget dollars for IT than the CIO: for digital advertising, email blasts etc.

"Typically the IT shop will see WiFi as a cost of doing business, but the business case now is that companies have to engage the customer, not just online but when they come into the store. And in the bricks and mortar environment they have no other way to engage them other than through WiFi."

Maybe, but there's another technology hovering in the wings that has equally interesting possibilities. It's called LTE-Direct, but that's for another day...