Yellow Pages, Internet ads, call centers, marketing material Eeeek! Will the expenses ever stop? If you miss the good-old days when you didnt have to do anything but build a self-storage facility to fill it with renters because demand far exceeded supply, then you need to get over nostalgia and join the new world.
It used to be we sold against non-use. No problem. We just showed people how our offering could help make their lives better, and we drew customers. But now we sell against our competitors. Some of them have nice places. Some of them have better features than we do. Some of them have better staff. So we get a bigger Yellow Pages ad, hire a call center and start buying Internet leads. Then we begin to wonder whether the cost is worth it.
First of all, all costs of acquisition need to be segregated into the types of new business youre obtaining. If you divide all advertising and marketing costs by your new renters to get to your cost of acquisition, your math is wrong. Pull out the rentals that really didnt cost you anything, including drive-bys and referrals. Then identify your rentals from other sources. Whered they come from? The easiest ones to track are call-center leads. Keep a separate tracking system, even if its a paper system, for your call center.
Sticker Shock
Now it gets a little tricky. Who really came in via the Yellow Pages? Did they look you up after finding out about you another way? Did they find you first in the directory? Do the math both ways and youll probably be shocked to see just how much a Yellow Pages acquisition costs. The end result might prompt you to find better tools and training for staff members so they can turn more callers into renters.
Also plan to give your call center better information and more attractive specials to make sure Yellow Pages inquiries dont slip away. When you see how much you really spend, youll probably want to become more efficient at fielding rental calls and converting them into revenue.
Internet
What about Internet leads? Hopefully you have a website that is promoted so people are finding it. Website promotion can be costly and time-consumingand a topic for another column. Just be sure you are every bit as deliberate about turning web leads as phone calls into rentals. Startling, too, is how much it costs to turn a web lead into a rental.
If you buy leads or participate in online directories, you might become frustrated by how much effort, skill and timing is involved in turning them into rentals. The costs here are astronomical as well.
Sales Management
Welcome to the world of sales management. Your first job is to find more cost-conscious ways to generate additional rentals. Your second job is to get so good at working leads that the cost of your expensive leads decreases. Your third job is to steadily bring up your average stays and expenditure per customer. Then you have to see how the costs and returns play out.
You can afford to rent to a certain number of expensive leads, but you have to be willing to accept this eventuality. To reject leads that have a higher cost of acquisition is short sighted. Instead, understand costs by lead type, and work hard to make all those numbers work to your best advantage.
If you entered self-storage because you wanted a business that required little to no management, you missed your window of opportunity by about 10 years. Dedicate yourself to management of your sales processes or youll have to hold out for a good offer on your property.
