Convenience Trumps Economy...

By Harley Rolfe

Convenience trumps economy. That's how most customers see it; but manysuppliers seem to miss this fact.

The instinctive reaction of many self-storage owners when they see they'reearning less than their desired income is to drop prices. They do so either inresponse to competition or because they are assuming the demand for self-storageis price elastic. In either case, it happens for defensive reasons. I'm going totry and dispel that inclination and show other responses are more lucrative.

Recently in my column, I've been discussing the invisible aspects of yourself-storage offering: choice and change. This time I'll examineconvenience--the mother of all features. It is the most important of theinvisible offering components--so much so that it should be regarded as aseparate product. Properly offered, it adds multiple levels of value (read price)to the product or service it accompanies, and fortifies against competition.

So, what is product convenience? Simple: The prospect assesses his problemand the product, and immediately concludes that life just became easier.Self-storage is loaded with convenience--creating opportunities--especially inpersonal (non-business) applications. The use of a storage unit is often anecessary evil, involving grubby work and an extra move. Generally, it'ssomething the user wishes he could have avoided. He rented a unit because hecouldn't figure a way out of it. That's fertile ground for the benefits ofconvenience.

Consider a Cake Mix...

Is there any ingredient of a cake mix that isn't generally found in theaverage kitchen? Even so, Mrs. America happily trots down to the localsupermarket and buys a cake mix for about $1.75--even though all the ingredientsare readily available to her at home for about a quarter. Is it any wonder thatGeneral Mills would rather sell you flour in the guise of a Betty Crocker cakemix rather than a bag of Gold Medal? Amazingly, the same company can offer thesetwo products side by side.

Compare the stock of an old general store with that of the modernsupermarket. The produce and deli sections are much the same. The differencelies in the huge array of convenience foods, all of which are aimed at makingfood preparation goof-proof, saving users time, etc. Supermarket shelves arefilled up to 80 percent with convenience offerings. This sort of trend issimilar to the common supplier responses in any competitive marketplace. Thosesame changes can apply to self-storage as well.

What You Sell Is Not What the Buyer Buys

So what's holding us back? One problem is the way self-storage operatorsdefine their business. They tend to think they are selling storage spaces. Thatdepends. We may be billing for storage, but looking at it from the prospect'spoint of view, he is buying one necessary step in the purchase of a new house.To some that is double-talk. Yet, it is the crucial distinction between what wedo as self-storage operators and what the tenant is doing. When engaged in amove, the prospect is instantly confronted with the chores of packing (andunpacking), transporting, buying insurance and finding storage (we hope). Theseare all unavoidable elements he must deal with in order to achieve his end.Self-storage is but one component of the means. If you want total prospectattention, deal with the problem as your tenant sees it. When a marketer talksabout thinking like the customer, this is what he's talking about. The instantthe prospect closes escrow, his thoughts turn to getting into his new home. Whatdo you think the rewards would be to the guy who recognizes and provides thetotal package of ingredients necessary to accomplish this? That's the"cake-mix" approach.

Why do you think Home Depot outsells separate suppliers of lumber, roofing,appliances, etc.? Convenience, gang. One-stop shopping. Betty Crocker pioneeredthe way in the supermarkets. How much more expensive is ready-mix concrete thanthat you have to mix yourself? Even if you mix your own, you will likely useSacrete mix rather than the commodity ingredients (sand, gravel, cement, etc.).The success of converting commodities is all around us. Why not in self-storage?

Come and Get It!

One reason operators have shied away from this one-stop-shopping approach isthat it involves more hassle. One of the appeals of investing in self-storage isthe relative ease of management. And that is true as long as the owner canachieve his ends operating as a commodity. It amounts to a "come and getit" marketing approach and works as long as people show up at the doorordering units without a lot of urging. Another reason is that examples ofpackaged services and how they work are apparent in the world around you, butnot necessarily the self-storage world. The techniques have been developed andproven in thousands of markets with a history of competitive conditions, butthey're new to owners in markets just now being tested by such pressures.

My concern is that many owners find themselves distraught over the need forthe marketing techniques I espouse. Not having operated in an aggressivemarketing climate, they are faced with a uneasy market situation on one sideand, on the other, possible solutions that are foreign and they may not trust.

Still--look around and notice the thousands of businesses that simplycombined some commodities and created an assembly perceived as easier or moreconvenient for the user--and worth much more than the constituent parts. That'sthe kind of synergy we're after. Would you rather grow corn and hope the erraticcommodity markets bless your toil? Or would you rather be Kellogg, insulatedfrom the vicissitudes of commodity pricing by creating so much convenience thatthe raw cost of the corn in cornflakes doesn't make much difference? What isnotable is that such organizations as Kellogg or Post were not originallyagriculturists who wanted out of damaging commodity-price contests. They wererun by business people who understood how to mix commodities and convenience tocreate new and lucrative products, which, today, are household names.

Let's hope the self-storage industry doesn't evolve into the next phase ofoperation the same way. Will it take outsiders to see that by combining variouselements with self-storage units, far more valuable offerings can be created?Step one for current owners is to realize their current offering is a commodity.Step two is to realize that, sooner or later, severe price competition willbefall many facilities as the supply of units starts to exceed the demand. Toprevent step two, remove your facility from market consideration as a commodity.One of the most fruitful ways of doing that is by adding convenience as aningredient to your offering. Make it distinctive and more valuable.

These things are not true because I say so. I'm only the reporter. Lookaround and check the manifest presence of convenience being used to createdifferentiation. Differentiation is the only potent escape from commoditycompetition. It's where marketers spend most of their time. Next month, I'lloffer a recipe for brewing some self-storage convenience.

Missed some previous issues? Check the web at www.hardnosed.com.

Harley Rolfe is a semi-retired marketing specialist whose career includesexecutive-level marketing positions with General Electric and AT&T. He alsoowned lodging and office facilities for more than 20 years. Mr. Rolfe holds abachelor's degree in economics from Wabash College and a master's degree inbusiness administration from the University of Indiana. He can be reached at hishome in Nampa, Idaho, at (208) 463-9039. Further information can also be foundin Mr. Harley's book, Hard-Nosed Marketing for Self-Storage.