A recent business news report says that Red Roof Inns Inc., a company with nearly 325 hotels, is taking steps to promote its services online and ensure more Internet visibility. The company has always had an online presence and now plans to make itself more visible to “Generation Y travelers,” the report goes on to say. With numerous social networking websites and blogs commanding consumer attention, marketing on the Internet seems like a very natural transition for the hotelier.
What’s more, travel information is increasingly sought online. A busy business traveler is far more likely to seek transportation and lodging information on her portable PC or palmtop phone than she is to call up a travel agent who might be an entire time zone away.
Years ago, if consumers needed services from a particular company, they had to go in person, but now the Internet and telemarketing have made it much easier for consumers to get the same services in a relatively hassle-free manner.
Less Trouble for Consumers
Even as Red Roof gears up to ensure more attention by featuring in online searches, more companies seem to be interested in personalized communications with customers. As awareness of the importance of building customer relationships continues to increase, the number of channels through which companies can reach their customers has gone up phenomenally. Significantly, Red Roof has moved to this stage of marketing only now. The aforementioned report notes that “such a defined, aggressive presence in online media is something relatively new for the hotelier, which posted about $325 million in 2006 sales…Three years ago, virtually none of the company's marketing budget targeted online strategy, a share that's gradually grown since then.”
No doubt, using the Internet and telemarketing has cut down on costs for some companies in a big way. With more and more people shopping online or using Internet-based services, fewer people are going to the companies in person. This saves the businesses the cost of accommodating large numbers of people in a confined space. That said, it seems that using multiple channels is not always more economical. In fact, it can lead to excess expenditures by both the company and the consumer, according to an article from the American Marketing Association. The report notes that online banking and phone banking services have resulted in more and more consumers handling their banking remotely as opposed to going to banks in person. But as a consequence of this, the overall number of transactions, all of which the banks have to process, have been rapidly increasing. So even though the number of people visiting the bank on a daily basis has been reduced, the banks have ended up incurring more costs to manage the increased flow of transactions through the alternative channels.
In summary, it seems that the concept of multichannel marketing will take some time before it catches on fully and ensures added value for all parties — both for customers and companies.