Inside Self-Storage Magazine 04/2001:Three's a Crowd
|Copyright 2014 by Virgo Publishing.|
|By: Harley Rolfe|
|Posted on: 04/01/2001|
Three's a Crowd
By Harley Rolfe
When you shift from operating in a situation where you offer a commodity to a competitive marketplace, the number of elements in your business life increases from two to three. In a commodity marketplace, there is only you (your facility) and the prospects. All that's really required of you is that you make your product or service available. But when rivals show up, there is an important change. You now must now factor "distinction" into to your operating objectives. You need to give the prospect a reason to choose your facility over others in your area.
When you were alone (or nearly alone) in your market area, prospects appreciated that you were there and had space to accommodate their needs. But when the marketplace changes, the buyers change with it. Their attitude becomes something more like "You're lucky I'm even calling you!" The buyer has been empowered by the addition of rivals and will start to behave like a shopper. The operator who is there during the change must adjust. That adjustment is what marketing is all about.
In a competitive marketplace, every move you make is designed to entice prospects and make life difficult for the competition. You try for features that are attractive to prospects and hard to duplicate. But you face a challenge: Buyer instincts want to simplify the purchasing decision by placing all the choices side by side and choosing the cheapest--a situation you want to prevent.
Marketing is often invoked as the answer. What marketing usually means to those who haven't used it much is "media." What can I do to improve my Yellow Pages ad, or what about newsletters or a new brochure, or what about the exciting new Internet? What gets lost in the shuffle is the need for owners to make their offering unique. Media can help you publicize your business, but they won't solve the overall problem.
The first thing business consultants often ask their clients is, "What business are you really in?" What he is hoping the client understands, as he answers this question, is there needs to be a shift from what the client is now doing to what the client's customers want him to do. The client often rebels when he realizes where the consultant is headed, but the consultant knows what must be done. The problem is getting the client to embrace the change.
The changes a self-storage operator needs to make in the face of competition must be sufficiently radical to cause the prospect to see a real difference between him and his competitors. The operator wants prospects to abandon their usual manner of shopping--on price. It takes a jolt to get them to do that.
There is no point in talking about the Internet, Yellow Pages, newsletters--any kind of media--until you establish a market posture that will separate you from rivals in the eyes of the prospect. Unless you achieve that, all talk about media choices is meaningless and wasteful. Open your telephone book to the Yellow Pages and review all the self-storage ads. Ask yourself why a reader would choose one over another. Better yet, ask a friend to do it.
Do any of those ads have any power? You may start to examine the layout, type fonts, catchy copy, etc. But do any of them have a unique and persuasive message? They often attempt to manufacture notability where there is none. The prospect sees through that on his way to simplifying his shopping task. Such operators may well spend a bundle on media, get minimal results, and then blame "marketing" for being impotent. But he wasn't "marketing" effectively. Without a full-fledged marketing plan, utilizing media is a waste of time.
Developing a facility's attractive features is where a marketer's creative juices start flowing. The problem is how to establish differentiation. You can't necessarily control the supply of units in your market area, so the draw of "location" is diminished. At the same time, you don't want to compete on price. Your choices are few.
In this situation, the operator can use one or both of two things: facility innovation (i.e., climate control, sophisticated security features, etc.) or packaging. The latter wraps allied elements into the offering, shedding rivals from comparative consideration. Packaging may also provide the opportunity for realizing the convenience premium (see the February 2001 issue).
If you are succeeding in your self-storage business without these techniques, then I'm sure you're asking yourself: Why change? If price competition works for you, there is no reason to change. But if not, your goal is to change your market posture so you no longer get calls for the price of a 10-by-20 or a 6-by-12. Instead, you'll get requests for the "packages" you have created. Now you are in control. Marketing can get that done.
It's Your Show
It all starts with your urge to separate your facility from the others. You control the content of the packages, you set the pricing, so you control the prospect conversation--it's your show! Done correctly, marketing shows prospects you are on the ball, not just one more facility. You may get the awkward feeling that operating this way is entering into a "different" business. Possibly. Storage units become simply the commodity that is now a component of each package you are offering. Is this more complex? Yes. Is it more lucrative? You bet!
As competition makes things livelier, the future opportunities for self-storage require differentiation. It insulates a facility from the effects of competition and is more rewarding. It sounds like win-win situation to me.
Harley Rolfe is a semi-retired marketing specialist whose career includes executive-level marketing positions with General Electric and AT&T. He also owned lodging and office facilities for more than 20 years. Mr. Rolfe holds a bachelor's degree in economics from Wabash College and a master's degree in business administration from the University of Indiana. He can be reached at his home in Nampa, Idaho, at 208.463.9039. Further information can also be found in Mr. Harley's book, Hard-Nosed Marketing for Self-Storage.