What Every Seller Dreams About...Part IIExamining segments empowers owners to understand user needs
Copyright 2014 by Virgo Publishing.
By: Harley Rolfe
Posted on: 01/01/1999



 

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What Every Seller Dreams About...Part IIExamining segments empowers owners to understand user needs

By Harley Rolfe

Moving is grubby work. It's dirty and physically demanding. Friends are imposed upon, vehicles rented or borrowed, and stuff gets misplaced. The hope of the person moving is that some of these things won't happen or be necessary. Use of self-storage means a double move, and people sure would prefer to avoid that. That's why we often get the tenant at the last minute. They were hoping to avoid the need for self-storage all together. No one is saving their pennies to rent a self-storage unit.

No news here, but lots of opportunity. Take the woe out of that move. Get to the "place" where the prospect is. That doubtless involves things besides storage: transportation, packing materials, planning tools (How much space do I need? How do I keep track of where I put everything?), man power, etc. Spare the tenant the need to worry about how to get the necessary things arranged. Your role is to facilitate by knowing exactly how, who and where the prospect can get the help they need. You may want to offer some things yourself. The important thing is to distinguish yourself as the one who will ease the burden and distress of moving.

Incorporate the unit into a package that solves the tenant's whole problem, then name it. You are no longer a 10-by-20 unit, rather you have created a product: "EZ Move from A to Z." You have made it more difficult for the prospect to shop, but made it much easier for him to get what he wants. Not bad.

Other pieces of that whole picture may well try to influence the prospect in another storage direction. If we aren't involved in anything other than the unit, we don't have any claim on all the other considerations the prospect will undergo in order to achieve his end. The rental trucking company may well have a storage deal for the prospect. The real-estate agent may also. We'll never know because we're not involved. My suggestion here is simply that there is a risk in not tying up the prospect by being certain we're unavoidable when any prospect pursues any objective that might have storage as a component.

We should be there the moment the prospect begins to consider a need that could involve storage. We already know that most people think of storage last when considering a move. What can we do to have them think of us first? Seem like a lot more trouble? It is. But as the great department-store founder, Marshall Field, said, "Give the lady what she wants!"

The Packaging Bonus

You have added an additional feature to the offering--convenience. This results in synergy and carries a premium. The sum is greater than its parts, and the added value translates into a premium for you. You have created additional utility and can take that reward. Note the franchises and food products aimed at making life simpler. It would be much cheaper to buy the ingredients (commodities) and cook at home. But, Sara Lee makes it easy for the user to get his needs accomplished--at a whopping margin. The moving prospect must deal with the whole picture to satisfy his needs. Help him.

It is less likely that the prospect will "call around" when attracted to you because of a good package. He knows that you have thought about his needs and have taken useful steps to meet them. He knows that you are only one to offer the package. Further, it causes you to engage with him in such a way as to delve more deeply into his situation. To confirm that you truly do have an offering more suited to his need, you must ask questions about his intended use. Now you have shifted the focus of the discussion from what you're doing to what he is doing. That's where you want it. Convenience is a very strong appeal. It is a separate and additional source of benefit to the prospect. It earns its own premium. Not only have you improved the price of your offering, but you have also vastly improved your competitive stance. Pretty good, wouldn't you say?

As you move into this kind of approach, you may discover that you need several options for the tenant to consider. So much the better. You want the tenant preoccupied with several options that you control. Do you care which he chooses? Nope.

The problem with using packaging is that you must know enough about the prospect to design them. Your exclusive features must be relevant to be effective. That means that you need to know a considerable amount about how each target will gain utility from self-storage and figure ways to enhance their experience.

There is another response to competition that is a form of media, but it is so effective that it deserves individual comment. This approach is branding. It derives its effectiveness by simply isolating a particular offering in the prospect's mind. In its purest form, it accords no particular special features except for the supplications by the seller to "buy mine" and use the media to make it familiar. Strangely, that effort pulls you name from the rest in the hat and makes it familiar. In our discussion of packaging, the new package entity needs its own brand in addition to the name of the facility--much like the relationship between General Motors and Buick. Things that were known (Sure, I've heard of that!) are preferred and improve the odds that they will be chosen over rival choices. Branding is the first step.

Consider the prospective tenant's view. He's never stored before. He's about to commit thousands of dollars of cherished stuff to a facility. He will respond to stimuli that gives him assurance that what he's about to do is OK. From our view, we want business, but we want no part of even implying that we are assuring him of the safety and security of his possessions. Making our facility familiar is a tiny concession of such assurance--and technically harmless.

About Hard-Nosed Marketing

I've delayed until now a more specific discussion of what hard-nosed marketing is. You needed a better look at what professional marketers do. People just curious about marketing should get off here--"come-and-get-it" marketing may be just right for you. For the rest of you, an analogy: If I invited you to go fishing, we have a couple of choices. We can show up at the lake, put a worm on the hook, throw it overboard, open a beer and hope. Or, we can get serious about our outing.

We both know that success is governed by how much we know about our quarry. We would need to know about the habits, haunts and habitat conditions that makes our target audience's behavior predictable. If fishing, we would visit the local tackle shops to get suggestions on lures, locations, etc. They would tell us that the pike are still in the shallows and are taking surface plugs.

We accept the idea that it is only good sense to do a little research to enhance our chances for success. We admire a sportsman who knows his stuff on the lairs, drop-offs and likely habits of fish and game. We might even try to get him to take us along one day. He is the one with a full creel and a bulging freezer. When it comes to hunting or fishing, he's hard-nosed--knowledgeable, confident, unrelenting. He expects to be successful.

But when I suggest that we isolate the various segments of users that we all have in our facilities and study their habits so we can go "get some more," at times I am met with glazed eyes. I think it's because with wildlife, we easily recognize that different types and species look different from each other, and it follows that they will have different habits. But people all look the same. It's difficult to accept that their uses could be so different and that the differences are so significant.

More About Those Segments

The first part of getting to hard-nosed marketing is learning more about how customers gain benefit or advantage through the use of my product. Others may be concerned with the market, but marketers can only work with segments. Why? Gross measures obliterate the use or behavior by users, which obscures the chance to understand what's going on. The business volume from some groups is increasing, some decreasing--the total is steady.

So, it is not as simple as saying that is total revenue is going up, it's good and bad if it's going down. Having noted one or the other, what does that prompt you to do? You will find that in any one facility, different segments are behaving differently. Some of it may be seasonal, some inspired by the competition, some by a general downturn in real-estate exchanges or construction activity--but you are helpless to deal with any of these unless you know what changes in behavior there are among segments. We need to determine--and then track--what is going on by segment. (I know we treated segments last time, but we need it clearly in mind as we explore how we put it to use.)

We all know that there are two general classes of segments: personal and commercial. Those are too general to do a marketer much good. There is more to know. For personal use, a disturbance is often what creates a need for storage--job promotions or loss, children arriving or leaving, changing residences, divorce, growing older--these are the life disturbances that occasion decisions to use storage. Note that most are transitory. They begin and end. Sooner or later, the need for storage evaporates and we must find new ones to replace them. Those are conditions of those segments.

For commercial use, the reasons are often more enduring. The need is inherent in what the organization does to create their own income. Certain kinds of industries must have storage. We know about the records-storage needs of professional people, banks, etc. Distribution organizations are another large segment. In both of these cases, every single one needs storage. The relevance to us is how they solve their storage need, not whether or not they have one. Thus, most needs are permanent, and the reason the commercial tenant will move out is for some condition other than need.

A qualifier for us relates to size. We're constrained because our units usually max out at 400 to 600 square feet, but one study showed a distribution of commercial for all sizes that a facility had. So, we have plenty to offer commercial prospects. One of the further stimulants is growth by an entity within the commercial segments. Growing businesses are usually strapped for capital. Self-storage credit terms are unusually generous. The trick is to determine which businesses are growing.

Beyond the desire to identify those segments, there are some other mundane considerations. There is a matter of "segment ID quality" in identifying segments. We want to identify segments to help us market them. So the IDs should offer the things that we need to help us do that.

  • A segment should be measurable in total terms; that is, how many instances are occurring in my service area that will produce this use? You need to know whether the segment potential is increasing or decreasing in order to figure out how important it is.
  • It is very handy when there is a correlation base available, both for comparison and for forecasting. The availability of correlation information tells how we're doing compared to some other related or connected data. For instance, housing starts or real-estate-sales activity are residential-move indicators. Further, such data is forecasted by local organizations (power companies, public highway and sewer planning organizations, banks, etc.) This can reassure us that our target segments are worth pursuing--or that they are not.
  • Availability of media is a very practical issue for self-storage. Are there media choices that connect directly to the segments? After we have identified our segments, we want a practical, cost-effective way to reach them.
  • How you get the word out to everyone is a matter of media choice. But, at this point, you know you have completed the most important part: You have determined what the various segments are and what message you have for each.

Putting Our Act Together

Recall in an earlier column our reference to football. We said that we should set the terms of the game (field size, number of players, scoring system, etc.). We also said that this could not be the specific game plan for a particular opponent, since that is very specific to the game involved. Same goes here. We need a market plan that melds everything we learn into a plan of attack.

Keep one more thing about football in mind: Every offensive play is designed to score a touchdown. Every defensive formation is designed to stop the opposition cold. It never quite works that way. The respective offenses and defenses adjust. It is a dynamic system. Your competition and the changes in the market will create the same for your plans. You just keep at it.

The remainder of the hard-nosed marketing series fills in the blanks with more on how to apply the segment approach. There is nitty-gritty work to be done plus thought and segment-planning in preparing to go to market. We treat the prerequisites for hitting the "market-running."

Missed some previous issues? Visit the Web at www.hardnosed.com.

Harley Rolfe is a semi-retired marketing specialist whose career included 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.