The fundamentals of hotel distribution
Week 3
Peer-graded Assignment: Which
electronic marketing technique should I
use to generate additional traffic in the
short run? WEEK 3
1. Paid search engine marketing is a good option that the hotel can use to sell those packages in the
next few weeks. Like any other technique, it has its pros and cons of being implemented. As for the
advantages, the most important is that it is a performance-based technique, which means that you
pay according to the level of activity of your business, and if nobody clicks on your ads, you should
not pay anything then there is no unnecessary expense of resources. Secondly, a very important
point of SEM is that you decide yourself how much to invest each day in the advertisements made
and how much you want to pay for each click that a potential client makes. Logically, the more you
invest, the more people you can reach; but it is beneficial that you can choose to start by investing
small amounts if you want to see how SEM performs. Finally, converting customers who visit the
page through SEM ads into real buyers is easier thanks to this technique compared to an average
brand.com visitor. This is taking into account that if they are visiting the page directly by clicking from
the ad it is because they have seen something attractive and interesting in the ad, and for this
reason they already have their mind with a greater predisposition to make the purchase.
As for the limitations, a very important one is that many brands and companies that use this
technique compete for the same keywords in their ads, as they are the most common and "striking"
ones for potential customers. This logically causes the costs for this tool to increase and the
competition to become much stronger, aggressive and above all, crowded. Second, it is a technique
that is paid per click made on the ads, but that a person clicks does not mean that they necessarily
make the purchase at the hotel; that will depend on the quality of the web page that the person
perceives. The conversion rate is one of the most critical issues for hotels, because many people
can visit the page but few buy; and for each person who visits it and clicks on the ads, you still have
to pay even if the person does not buy. Lastly, 5 weeks seems to be a very short time to use this
technique and that limits its effectiveness. It is not easy to get buyers in the short term with this
technique because you are not reaching your consumers directly and because SEM is a very
common technique and the competition is very high, and if you don´t know how to differentiate your
ads very well, in 5 weeks you will hardly get something.
2. Email marketing seems to be a very good option to achieve the goal of selling these packages in
the next few weeks if the hotel knows how to implement this tool well. In the first place, because this
technique is a direct contact, staightforward to the client, and it is very possible or almost certain that
the person will read it whether or not they are interested in making the purchase. Email marketing
has high response rates, and that for the short term can be good as there is limited time to get
buyers. Secondly, if you hire a dedicated email marketing service, this tool normally provides
campaign reporting facilities to help the hotel make the evaluation of a campaign easier and to
measure its effectiveness quickly. Finally, this technique allows you to segment well what type of
customers you want to reach for a certain package. If the hotel has a complete database, it knows
what type of clients its past visitors have been and what their needs are, and with this it can segment
well to which clients to send the information by email about certain packages or promotions that are
being offered. As this tool takes different forms, the hotel can segment for each specific occasion
and send the information to the most appropriate people and with more possibilities of making the
purchase effective.
As for the limitations, clearly there are also a bunch of them despite being a very good option to sell
these packages in the short term. The first, being a medium size independent hotel that does not
belong to any chain, it may not have a good customer database, or it may have an incomplete one,
which will make the effectiveness of this tool very difficult. Second, to use email marketing, you must
have the prior authorization of the people so that information is sent to them by email and what type
of information specifically. The problem is that many people select that they do not want to receive
information by email for fear of SPAM, that many companies are already abusing the amount of daily
information they are sending to customers and they get tired of receiving this irrelevant information.
And if customers select this option, it must be respected and no information of any kind can be sent
to them and that would cause this technique to become useless. Finally, if you want to use this tool
properly and get the most out of it, you should hire a dedicated email marketing service, but this can
be costly and expensive for the hotel because it is not a cheap service since it provides a detailed
analysis of the implementation of this technique. Hence, some hotels like this one that are not very
big and are not a major player, will prefer to save that money and think that they can implement this
technique effectively on their own and without the need for this service.
3. Affiliate marketing is an online marketing tool in trend lately, which, like the others, has its
advantages and limitations, especially if it refers to its implementation in the short term. As for the
points in favor, the most important, as well as the same for SEM, is that it is a performance-related
technique, which means that you pay according to the level of activity of your business, and if
nobody clicks on your ads, you should not pay anything. Secondly, such an affiliate like Groupon,
which is a big player in this market, can boost the reputation of the hotel just for the fact of being
present in that channel that many people visit every day looking for the best prices to make their
purchases. Finally, and following the advantage recently described, this tool can help the hotel to
broaden audience by being present on the websites of the affiliates; people will begin to know the
hotel packages and to be attracted to them. As it is not an exclusively tourist sales channel, many
people who without wanting it will be visiting these online channels looking for other products /
services, will see the touristic and accommodation offers and this will make the hotel's audience to
expand. It will also depend a lot on where the hotel is located on the affiliates website, but that will
be discussed below.
As for the limitations, the first and perhaps the most important and worrying one for hotels is not
having control over the affiliates and the way they manage their websites, they have complete
freedom to do it as they want. Hotels must respect their rules and conditions, and this loss of control
makes them completely dependent on their affiliates. When negotiating affiliate marketing techinique
contracts, try to make this as clear as possible. Secondly, through this tool, it will be difficult to
generate loyalty in consumers who buy and stay at the hotel. The average type of customer who
visits these pages, like Groupon, is a customer who loves to shop through those channels and
always makes purchases of all kinds of products and services out there. Once a person buys
through that channel, they will want to continue doing it later if they want to return to the hotel, which
will make it difficult to convert them into a direct customer and include them in loyalty programs. In
the last place and to wrap up, through affiliate marketing, there is a lot of competition. There are
many companies that choose to be present in these channels such as Groupon, and for that reason,
following the last idea mentioned in the advantages, the position in which your hotel will appear on
the website of these affiliates becomes very important. If your hotel is not at the top in the first
positions, it will be difficult to generate sales through this technique because the options are very
numerous and the most striking ones for most people will surely be those that are placed in the first
positions. That is why it is very important to do whatever is necessary (however expensive it may be)
to be at the top of affiliate websites.