Marketing can make or break any business. For self-storage operators in particular, it can stagnate or greatly inflate the value of real estate.
Unfortunately, we all become so focused on cutting expenses that sometimes we cant see the forest for the trees. Ive seen many operators cut marketing budgets to create more profitability when, in reality, they need to focus on spending more to enhance profit. The bottom line is we need to develop an overall program to attract more customers and maximize the return on marketing investment.
The Plan
First, develop a marketing plan. Determine your key influencers and stay in contact with them. A key influencer is a person or organization with a need for self-storage or one who can refer his customers/clients to your location. Once you establish a relationship, its imperative to follow up on a regular basis to strengthen the relationship. Unfortunately, most storage operators never get to this point but bail out before the relationship really takes off. They conclude the marketing effort failed because they got no referrals.
Marketing to key influencers takes repetition, consistency and creativity to work. Once you develop the initial plan, give it several months to catch on, and be sure to track results along the way. Tracking can be conducted through a new-customer survey, completed during the initial rental of a unit. Tally information at the end of the month to identify what brings most customers to you. Ultimately, tracking helps determine what target markets are ripest for the picking, revealing where you should spend future marketing dollars.
The Action
Schedule monthly marketing calls and make them work for you. Plan well in advance to develop disciplines in this vital area of operation. Mid-month is a good time to make calls because self-storage businesses tend to slow down a bit. Many of the key influencerssuch as those who operate apartment communities, new housing communities, real estate offices, etc.also slow down, so its a good time for them to meet with you too.
The important thing is that you also become a key influencer for the person or organization on which you are calling. For example, if youre building a relationship with an apartment community, refer some storage customers to that business. Once you refer a lead, reinforce it. The apartment manager may not realize the referrals you send unless you have a follow-up system in place. It may be as simple as giving the customer your business card with the apartment communitys contact name written on the back.
You could even develop a colorful referral coupon and provide several to each of your key influencers. Let them know, for example, that you will honor $25 dollars off for each of the referrals they send as long as they have the coupon. This also helps you track referrals professionally.
These strategies work over time and make it easier to call on your key influencers. Make your calls consistently and with a purpose in mind, and it will improve the results and profitability of your marketing.
The Outcome
Lets say you spend $2,100 per month on your marketing campaign and are receiving 30 potential customers via a combination of phone calls and referrals. The cost for each potential customer is $70. If only 10 (33 percent) of these customers are converted to renters, however, the real marketing cost per customer becomes $210. This turns into a very expensive proposition and amounts to a weak marketing plan.
Unfortunately, this happens more often than not. Results like these erode a storage operations net operating income. But what if you spend the money, time and energy to maximize your marketing program? Is it realistic to expect you can generate 70 potential customers with the same marketing budget ($30 per lead), and convert as many as 50 percent to actual renters? Absolutely! Now the marketing cost per actual customer becomes $60, not including walk-ins, repeat customers, referrals, etc., who also rent units. Think about the compounding effect over time.
To improve net operating income of a self-storage operation year-in and year-out, you must invest the time, money and energy it takes to develop an effective marketing program. This involves combining many different strategies and a commitment to building long-lasting relationships.
Brad North is founder of Advantage Business Consulting, which specializes in facility management, feasibility, onsite sales, marketing and operational training for the self-storage industry. Mr. North contributes articles to various self-storage publications and is a nationally recognized speaker and consultant within the industry. For more information, call 513.229.0400; visit www.advantagebusinessconsulting.com.