One of the most common complaints among fellow business-travel road warriors is the high cost of Wi-Fi outside the friendly confines of our offices. It’s a topic that comes up continually in hotel lobbies and airport terminals as we struggle to stay connected with the flow of business. We all go through gut-wrenching internal debates about whether or not we should expense the $14.99 for a day of Internet access just so we can sync email and maybe Skype the kids before bed. Why is it—we often wonder—that Wi-Fi is free at Starbucks and McDonald’s, yet we must put up outrageous charges where we need it most—where we are already spending hundreds of dollars for hotel rooms or plane tickets? A recent article in Slate has gained some attention in suggesting that the time has come to free up Wi-Fi at every business. While that would be nice, the law of supply and demand won’t change things, until someone recognizes the opportunity for Marketing with Meaning.

In Slate, author Farhad Manjoo tells the story of how Starbucks was recently pressured to offer free Wi-Fi service because a plethora of its competitors have provided the free access—ranging from McDonald’s to nearly every corner deli and independent coffee spot. He writes that many mid- and low-budget hotel chains have begun to offer free Wi-Fi, including Best Western, Comfort Inn, and Holiday Inn. According to Manjoo:

“The sooner that hotels, airports, convention centers, and other similar places realize this, the happier they’ll make their customers.”

Sounds great, but don’t hold your breath. Just because people want, nay, need something for free does not mean that they will get it. The real purpose of my post today is to remind us that the simple economics of supply and demand come before any Wi-Fi routers go up.

In general economic terms, free services are most likely to occur when three rules apply: (1) the cost to provide the services is low; (2) consumers specifically desire the free services; and (3) and competition is also offering them for free. For example, restaurants provide free salt, pepper, and sugar at your table. The cost of these condiments is very low, people want or need access to them while eating, and because so many restaurants provide them for free it would be ridiculous to start charging. In the hotel market, we similarly see free shampoo, soap, in-room coffeemakers, turndown service, and wake-up calls.

Wi-Fi passes these tests in some cases. In the U.S. at least, Wi-Fi is very cheap to install and provide and it is definitely a service that consumers desire. However, competition is where things get dicey. Restaurants and coffee shops feel the competitive pressure because people have a pretty broad choice of where to sit down and spend their money. One could literally drive by a dozen spots in less than five minutes looking for those that have a “Free Wi-Fi” sign in the window. The same goes for those mid- and low-budget hotel chains, as they are frequently huddled together along the same interstate exit.

But this competitive shopping process is very different for high-end hotels and airports. The competitive options for business travelers are much more restricted in these markets, and Econ 101 tells us that less competition means monopoly-like “rents” can go to the seller. Yep, it’s unfair and economically inefficient when Delta charges $9.99 for Wi-Fi on a one-hour flight, or when your $400-a-night W Hotel makes you pay $19.99 for 24 hours of its horribly slow Net access. But these services become huge moneymakers when you are stuck with few options.

The other free market “failure” here is that most end users of high-end hotels and airfare are not the ones actually paying for the Wi-Fi access—it’s actually the employer who gets stuck with the bill when the expense report is turned in. This is similar to the reason our health insurance costs keep going up—the end patient is agreeing to (or even asking for) medical services that he or she never pays for. Now, just because all three of these guidelines are in effect does not mean that companies will choose to offer free benefits; but it does mean that this becomes a true marketing choice and investment—and I believe this can be one of the most meaningful marketing choices a brand can make.

There is one great airline example about how bucking the charging trend can be a marketing win. Charging for checked baggage is an interesting case where a reduction in competition led companies to cut back on a service that everyone enjoyed for free for years. The few big players—Delta, Continental,  American, and others—are now reaping big bucks thanks to this shift in the market. In 2009 they collected $13.5 billion in “ancillary services fees”—which mainly consists of new baggage fees.

But building on its Brand Purpose of “Democratizing Air Travel,” Southwest Airlines saw a huge opportunity in this shift. It was the one major airline that refused to charge its customers for up to two pieces of checked luggage. Not only did it keep its free baggage benefit, but it created a marketing campaign around “Bags Fly Free.” The results are pretty amazing: Southwest gave up an estimated $300 million in profit by forgoing the fees, but its differentiated service allowed the company to gain an additional 1% share of the market, which translated into $900 million in additional revenue—not to mention earning it ongoing customer trust and brand loyalty at a moment of truth. This was a marketing investment that clearly paid off.

What I find interesting is that it may be that only those services that “violate” my three rules above are noticeable by consumers and should actually be considered marketing investments. When you and all of your competitors offer something it is no longer differentiated, meaningful marketing, but rather just a cost of doing business. At what point does Wi-Fi at a restaurant just become the equivalent of ketchup?

Wi-Fi on airlines or high-end hotels is far from destined to be free, but it does offer an opportunity for brands to stand out by offering it. I am starting to see movements in this direction. For example, last week Sheraton offered me free (but slow) Wi-Fi because I am a Gold Starwood Points member. And Delta provides free Wi-Fi in its Sky Club lounges.

Perhaps there is an opportunity for an airline or hotel chain to differentiate by offering free Wi-Fi credits or codes directly to the company procurement and travel managers who are paying for accommodations at the end of the day. Imagine a loyalty campaign or points program targeting these key decision makers. Working through a travel provider such as American Express, Delta, or the W Hotel could offer free Wi-Fi to heavy corporate buyers. This could help break through the clutter, reward the most valuable end customers, and win a nudge of business when prices are about the same. Another “scale” option is to partner with a company such as Orbitz or Travelocity to show people that free Wi-Fi is, say, a $14.99 value when the price search results appear. A customer might decide to pay an extra $10 for a hotel room when he knows the $14.99 Wi-Fi comes free. And remember, the incremental cost of a hotel offering this benefit is near $0.

You might find it useful to use this post to trigger a thinking exercise on your brand. What is a service that your customers will appreciate, that has reasonably low costs to execute, and that your competition isn’t offering yet? You might just uncover a powerful Meaningful Marketing idea.

When people ask me what it takes to be good marketer I always reply that a key to my success has been the ability to pay attention to how people behave and form models to explain the behavior of individuals and society. Interestingly, this is probably what it takes to be a good comedian, too. Constantly paying attention and analyzing the world is a lot of work, unfortunately, and one of the “models” of behavior I’ve noticed is that companies often resort to rules and processes to guide people’s behavior so that they have to think less. The objective of process is to improve service quality and consistency. Unfortunately by dumbing down behavior, a “good” process can prevent firms from creating a great service. Let me share one example from my experience at the Delta Sky Club last week.

I am a very frequent flyer and for years now have been paying a few hundred dollars to be a part of the Delta Sky Club, which formerly was called the Crown Room. The Sky Club is a great value for someone such as me who spends too much time in airports. It provides a place to relax, free Wi-Fi, plentiful drinks, and helpful staff. But I’ve noticed something odd in my weekly check-ins at these air travel oases. Until a few months ago, the staff at the welcome desk would scan my boarding pass and welcome me in. But recently they have also been asking for my driver’s license or passport when I hand over my boarding pass. But why?

Here’s the thing: Except for maybe one or two airports in the U.S., the Sky Club is located in the main concourse after you go through the increasingly rigorous security check. That means that a trained expert in the front lines of terrorism protection has already double-checked that your ID matches your boarding pass. So why would Delta need to do this again? In fact, the boarding pass is printed with the words “SKY CLUB” and Delta takes the additional step of scanning the boarding pass, which brings up your personal account.

When I went through this extra step last week I asked the Delta representative at the desk about the purpose of this ID check. I made sure to let her know that I was not complaining, just curious. She had no clear idea why she was doing this step hundreds of times per day. That’s always a danger sign, by the way. If the person on the front lines of customer service can’t tell the customer what’s going on you have an issue. She then vaguely recalled something and mentioned that, “We added this process because people can do things with these print-at-home boarding passes.” OK, now I’m getting nervous: The TSA is approving people who might have fake boarding passes! And people are taking the time and risk to fake boarding passes just to get a free beer and Wi-Fi at the Sky Club?!

There might very well be a logical reason for Delta’s double-check of IDs, but I doubt it. Rather, I believe this is a process that someone instituted because there was some small chance at gaming the system. Things such as this happen often in businesses that are used to a lack of competition or service quality. And most airlines fall squarely into this zone. Someone comes up with this idea in a meeting and the group approves it without talking about the fact that it is at best pointless and at worst a signal that Delta does not trust its most frequent flyers. Power corrupts absolutely.

But the other lesson here is that new processes should not be taken on lightly. When employees are told what to do and how to do it even the best of them turn off their brains and go on cruise control. It was true of factory workers at the turn of the 20th century who suffered under Taylorism, and it is true of service providers in multi-billion-dollar companies today.

My friend Matt Carcieri is one of the key leaders at P&G charged with helping the company move to “Purpose-Based Branding.” If you haven’t read about this before, the central idea is that brands must turn their equities and marketing toward the pursuit of higher-level goals. In his book on the topic, It’s Not What You Sell, It’s What You Stand For, Roy Spence writes that brands must challenge themselves to wholeheartedly focus on this purpose for existence. At P&G, people such as Matt Carcieri and Jim Stengel helped Pampers, for example, shift toward a Purpose of improving babies’ development. Over the holidays, Matt shared a story of how Southwest Airlines—one of the central case studies in Spence’s book—is continuing to profit from its purpose.

In his book, Spence tells the story of how Southwest Airlines rose to leadership in the late 1970s and 1980s on the heels of the government’s deregulation of the airline industry. As the skies opened up to new competitors, Southwest took an underdog mentality up against the big, entrenched, oligopolistic players such as American, Pan Am, and TWA. The company’s entire employee base embraced the underdog label, and rallied around their Purpose:  to democratize air travel. This mentality drove the company to embrace shorter, point-to-point flights, enabled it to expand without unionization, and even showed in the high-quality, high-fun flight attendants and pilots. Southwest was not just another airline; it was a company on a mission to make flying more affordable and accessible. Today, Southwest is just behind Delta in total market capitalization, and did it without major mergers or dips into bankruptcy. The company was profitable again in 2008, while Delta felt a 40% net loss.

Based on Southwest’s purpose, it is no surprise that the company decided not to go along with the rest of the industry crowd and add baggage fees to the price of a ticket. According to its CEO, Gary Kelly, Southwest was giving up $300 million in revenue by not simply joining its competitors in charging a fee that fliers hate, but can do little about. But the underdog, democratic blood still pumps through Southwest’s veins, and it bucked the trend and risked angering shareholders by just saying “no.”

What’s more, Southwest saw the opportunity to promote the hell out of its commitment to “Bags Fly Free.” Baggage fees can add up to $100 per flight per person, so Southwest’s television commercials and print ads tout their fundamental competitive difference. The ads feature smiling Southwest employees talking about how much they love bags—itself an example of a strong, purpose-driven culture.

The results? Well, Southwest claims that it has captured an additional 1% of the market because of its lack of baggage fees so far. That translates to $800 million to $900 million in additional revenue. Yep, as much as three times more revenue than baggage fees would generate. And please don’t forget how this meaningful marketing choice adds to the brand equity and loyalty of travelers. We all feel a great deal of anger for airlines that use their market power to gouge us on fare prices and continually pull back on service quality. But with Southwest, we have a hero in an otherwise villainous business. This very visible issue around baggage fees further cements the good and evil brands in the business, and translates into more sales for Southwest over time.

Thanks to its strong, guiding brand purpose, and its ability to make meaningful marketing decisions, Southwest continues to be the bright spot of success in an industry that continues to look at its customers as cattle. My only problem with Southwest is that it still hasn’t come to free Cincinnati from the oppressive shackles of Delta!