There are a many ways for self-storage operators to market their facilities and gain an edge over the competition. What’s a timeless, hugely successful option every operator can use? Referrals!
A 2017 study by research firm Nielsen found 82 percent of consumers proactively seek referrals from their peers, and 92 percent believe what’s said in their social circles. According to Facebook founder Mark Zuckerberg, “People influence people. Nothing influences people more than a recommendation from a trusted friend. A trusted referral is the holy grail of advertising.”
So, how can you net more self-storage4 leads and rentals? The answer is to build and execute a strong referral program.
The Benefits
A referral program allows you to prime and reward customers for spreading the word about your business. For example, you might offer tenants one month of free rent in exchange for referring a friend. The friend who rents from you because of the referral would get the same deal. It’s about using incentive to drive action. There are several benefits to establishing such a program:
Your customers are your biggest supporters. Whether you know it or not, your customers are talking about you to their friends and family. In 2018, the Word of Mouth Marketing Association estimated there are 2.4 billion brand-related conversations globally each day. Why not incentivize your customers who are already talking about your business?
Loyal customers multiply. Tenants who’ve been with your company for a year or more will most likely refer other customers who would also be loyal. Researchers at the “Harvard Business Review” who studied a German bank’s referral program found that customers obtained through referrals were 18 percent more likely to stay with the business in the long term.
It increases in customer engagement. When a referral program is used correctly, customers will be more engaged with your business. Loyal tenants will be more interested in what units you have available, offering suggestions on who to target and even connecting you with others in the community. These will be the ones who attend your customer-appreciation days, find you during the holiday parades and stop in the office on their facility visits. Customers who actively engage with the referral program are out in the community, looking and listening for friends and family to send your way.
It’s a cost-effective strategy. There’s no extra cost associated with a referral program other than the reward you offer. There are no consultant or pay-per-click fees and no extra website costs. And the revenue generated from a referral will far exceed the rewards set in place. Additionally, studies indicate a higher return on investment from referred customers.
Creating a Program
First, you need to know your customers. What’s the right reward to inspire referrals? Think about what your tenants most want. It could be a free month of rent or a $50 cash reward or gift card. These are common incentives used by self-storage operators. Consider who your customers are and whether your incentives are on brand. Whatever you use, it must make sense for your business.
Make the program personal. Referrals are successful because they come from real people. When a tenant refers someone to your facility, it’s often because of the manager or someone else at the company with whom they’ve made a connection.
Keep the program simple. Some companies load too many stipulations into their programs. Customers like easy, not complicated. If your program needs fine print, it’s likely too complex and potentially confusing. Any conditions should be straightforward and easy to comprehend.
Your program should be a win-win-win for you, the existing tenant and the new renter. Whatever reward you establish, make sure everyone benefits. If the new tenant gets a free month of rent, the existing tenant should get the same or something equally good.
The most important factor in creating a referral program is your customer experience. To be referable, your business must be clean, likable, reliable and trustworthy. You may offer the best rewards in your area, but if customers don’t have a stellar experience, they won’t refer you to others.
Promoting Your Program
Now that you’ve created a referral program, how do you promote it? Consider and use the entire customer journey. Office signage and brochures are a great start, but don’t stop there. Post details on your website and social media pages, too.
Remind tenants about your program regularly. For example, send a quarterly e-mail. Some facilities host referral contests, rewarding tenants who bring in the most new renters. Others hand out referral business cards. Just remember to track the program’s success by noting referred customers in your management software.
As a sign of courtesy and generosity, thank any tenants who refer new customers to you. A successful referral program has the power to take your self-storage facility to the next level in occupancy, revenue and exposure. It’s in your best interest to give it a shot!
Steven Jeffers is a facilities asset manager for Bee Safe Storage and Wine Cellar, which operates 12 self-storage facilities in the Carolinas. His experience and knowledge includes local marketing, management optimization and leadership training. For more information, e-mail [email protected]; visit www.beesafe.com.
