Self-storage operators nationwide have recognized the importance of their customer referrals and are spending more time and effort to create solid referral programs that will boost occupancy and increase revenue. Referrals provide one of the strongest returns on marketing dollars you have as a facility operator. Referrals (word of mouth) cost very little relative to other forms of marketing and advertising.

Aim to see 20 percent to 25 percent of your business come from customer referrals. This goes to the bottom-line profitability of a store and can make or break the success of a particular operation. Dont have a referral program in place? Here are some guidelines to get you started.  

Take Care of Customers

For your referral efforts to be a success, you must take excellent care of your customers. Service is a key ingredient to developing and implementing your program. If the tenant is pleased, hell refer his friends and family to your store. Facility operators often make the mistake of closing the sale and then forgetting about existing tenants. This is a classic error that must be avoided to achieve long-term results.  

Communicate

Your referral program can take on many forms, but the operators achieving the greatest success are those who have a passion for this type of initiative. They survey their customers during lease-up to track how customers discovered the facility and if they were referred by an existing tenant. This is very important; you need to know if your referral program is working to make the necessary adjustments to reinforce or improve it.

Operators of the more successful programs clearly communicate their program and its benefits to tenants. In other words, its not only critical to develop a strong referral system, you need to tell people about it!

You also need to reinforce the program at optimal times. For example, discuss the program during lease signing and provide written material explaining how it works. Give new tenants customer-referral coupons for their friends and family members. The coupons should reward both the tenant and the person he refers to you.

Finally, reinforce the program to customers in your monthly e-newsletter, and via snail mail at least quarterly. Send them a simple reminder about the program along with additional referral coupons. Consider including customer testimonials in this correspondence to provide positive support of the program and how it has benefited other tenants.

Offer Rewards

There are many ways to reward a customer for a referral. The value of the reward has increased recently, as many facility operators in todays economy must fight for every customer. Its not uncommon to see a referred customer receive $50 off his first month of rent, and the referring customer receive $50 off his next month of rent or even $50 in cash. Some operators have doubled this amount in the past few years due to declining occupancies and aggressive competition.

When you receive a customer referral, be sure to pick up the phone and thank your tenant. Acknowledge that hell be receiving the coupon for $50 off his next rent payment, or whatever you offer as a part of your program. Also be sure to send him additional coupons, as hes more likely to refer someone else now thats hes been properly thanked and rewarded for his recommendation.

Brad North is founder of Advantage Consulting & Management, which specializes in facility management, feasibility, onsite sales, marketing and operational training to the self-storage industry. He is a frequent contributor to various self-storage publications and a nationally recognized speaker and consultant within the industry. For more information, call 678.491.7984; visit www.advantageconsultingmanagement.com.