The Top Seven Marketing Concepts
|Copyright 2014 by Virgo Publishing.|
|By: Fred Gleeck|
|Posted on: 03/01/2001|
The Top Seven Marketing ConceptsWhat every self-storage owner must know to succeed
By Fred Gleeck
In working with more than 1,000 self-storage owners and operators, I have found a consistent pattern behind what marketing efforts do and do not work for this industry. There are seven tried-and-true marketing methods that work best.
The vast majority of storage owners concentrate their marketing efforts in one area: their Yellow Pages ad. But this is a misguided approach. There are six other marketing methods that yield a higher ROMD (return on marketing dollars). ROMD is a simple concept. You first determine how much you paid for a given marketing effort, then compare it against the amount of money that method generates in revenue. It's the concept of leverage--the greater the leverage of a marketing method, the more effective it is.
If you pay $1,000 for a marketing campaign and get $3,000 in return revenue, you have a ROMD of 1:3. The higher the second number, the better it is, and the greater the leverage of your marketing efforts. Here are the top seven marketing concepts in order of their ROMD, beginning with the highest:
#1: Repeat Customers
A repeat customer has the highest ROMD. It doesn't take a lot of money to get a customer to come back and rent from you again--although it does take a system and a concerted effort. Most operators don't pay enough attention to this highest ROMD item.
How do you increase your repeat business? First, you need to treat people incredibly well when they are renting from you. Don't just provide "good" customer service; give them great customer service. How exactly do you do this? One way is to keep close at hand the typical "emergency" items everyone tends to need in the kind of crises they might have while at your facility--i.e., jumper cables, a few assorted tools, and any other inexpensive items you can think of. Loan these out to people in need.
Another way to provide great service is to give people a gift when they first move in. It doesn't have to be expensive. Simply give them a small item that has a high perceived value to the customer but low cost to you. An example would be something like a few boxes of various sizes. In addition to being a valuable and timely gift, it will encourage them to buy more boxes from you when they need them.
In addition to providing excellent service, you need to keep your name front and center in people's minds, even after they are no longer renting from you. Once a renter moves out, you should continue to send him a postcard every three months or so. This is easy and inexpensive to do. Make sure the postcard contains a valuable tip of some kind that will make people really want to read it. Offer a discount to anyone who presents the card at your facility. Not only will this encourage previous customers to return, it will have a pass-along effect--people who get the postcard will give it to a friend of relative who needs storage. Postcarding previous customers increases both repeat and referral business.
#2: Referral Customers
For most self-storage operators, referrals are an afterthought. Not smart! Referrals generate the second highest ROMD. They should be given a much higher priority than most storage operators and managers give them. It takes very little money to generate referrals, and the returns are substantial.
The most important component of encouraging referrals is free: ask for them. To maximize the number of referrals you get, ask at three points in time. First, ask a customer when he first signs a rental agreement. He has just made a decision in your favor, and it's easy to get a referral out of someone who has newly decided to rent from you. Ask again whenever you or your manager does something for an existing renter where they are grateful and thank you. Finally, ask him again when he moves out. Assuming all went well, this is another time when he will be very willing to help.
Another successful technique to stimulate referrals is to give people a discount on their rent if they send you someone who becomes a customer. A referral flier or postcard can be used for this purpose. Put postcards up on the counters in your office and slip an occasional flier under all of the units at your facility. This small amount of money spent will produce great returns, even if only a few additional people are referred.
#3: Storage Hotline
This is an idea I originated. A hotline is a separate phone line that gives people a detailed recorded message. The reason why the ROMD for this technique is so high is that it costs very little money to implement, but it is incredibly effective. To properly provide a hotline, you need to set up a completely separate phone line--you cannot "attach" it to an existing one. The basic idea is that people are less reluctant to call a number when they are sure no one will be on the other end of the line trying to sell them something.
To make this concept work, you must advertise it as a 24-hour, free recorded message. The number you set up should be either a local or an 800 number. If you are located right near a state border, go with an 800 number.
Clients ask me how long this message should be. I always tell them it can never be too long, only too boring. The message should be recorded to sound informational, not like a sales pitch. I normally counsel people to title their hotline something like, "The Seven Things You Need to Know Before You Rent a Unit." Each item should be along the lines of, "Only rent from a facility that has individual door alarms... ," etc.
Your hotline message should start by listing features unique to your facility. You can list other features and benefits you find important, but start with those that only you have. Your goal is to make your unique features sound indispensable. After listening to your hotline, when potential renters call your competition, they will often ask if they offer those unique features--and your competition will have to say "no." If you made a convincing argument as to how important those features are, they will come back and rent from you.
In most places in the country, the cost of an additional phone line and a voicemail system is minimal. There is no one I know who uses the hotline system correctly who isn't delighted with the results. A major benefit to using a hotline is that when people call your regular phone number, the amount of time you have to spend on the phone with them is dramatically reduced. Most of the basic questions are answered on the hotline message. A manager doesn't have to spend his time answering the same repetitive questions. Your hotline serves as an electronic salesperson. It works 24/7, and all it wants as compensation is that you pay your phone bill.
#4: Centers of Influence
Centers of influence are people who can persuade your prospective customers in their decision of where to rent a storage unit. They include apartment-complex managers, truck-rental personnel, managers of local real-estate offices, housing-community managers, clergy, shopkeepers, etc.
When I first moved to New York City after graduate school, I met a recent dental-school graduate while apartment hunting. I started going to him for my dental work and referring him to everyone I knew. Ten years later, he told me that nearly 20 percent of his business was a result of my referrals. That's what one "loudmouth" who loves you can do for your business; and this applies to any industry, including self-storage.
The key to generating business from centers of influence revolves around consistency of contact. Other so-called marketing experts recommend bringing potential allies cups of candy and occasionally returning to refill them. But, first of all, few people ever bother to go back and refill them. Second, bribing people with sweets is a trite and overused concept. It is a sign of lazy marketing and low levels of creativity. It's something that has been done for the last 20 years in this business, but it's time to move into the 21st century. Rather than giving people candy, give them something of real value with very little cost to you.
I like the idea of preparing a short report on storage--something between 15 and 20 pages. This can be reproduced quickly and inexpensively. At the back of each report, include a coupon for $10 off the first month's rent. When you approach your various centers of influence, rather than offering them candy, leave them copies of an informational report they can give people who ask them about storage. The person who gives out the reports will look good, and business will inevitably come your way.
Make sure you go back to these individuals every month to check in and give them more reports if they need them. When you print up these reports, be sure to put a price on the front cover. Even though you don't charge your centers of influence or customers who ask for them, it increases the perception of value.
#5: Public Relations
Public relations is much more effective than any advertising you can do. I put it in position No. 5 in terms of ROMD. When you do get press coverage (and you will if you're persistent), it is well worth the investment of time--and it costs you very little money.
Press coverage is so effective because it is perceived as unbiased. Articles written about your facility will generate a significant number of new renters. If you were to purchase an ad roughly the same size as an article that gets written about you, it wouldn't have the same effect. People often perceive advertising as sales puff. They don't believe most of it. An article, on the other hand, is perceived as unbiased information.
What's the secret to getting coverage? You have to put in a regular and consistent effort. Send press releases out weekly. If you take just 20 minutes every week to send out press releases to your local media outlets, you will eventually get covered. Each week, try to tie the need for storage into a local current event. Write up the press release and send it out to each of your major press outlets. If you need help in writing press releases, there are many good books on the topic available at amazon.com or your local bookstore.
The key to getting coverage is persistence. If you do this every week, you will get coverage. The question is not if , but when, so start doing this immediately.
#6: Direct Mail
Properly used, direct mail can be very effective for self-storage operators. The biggest mistake I see being made by those who use it is that mailings are often general and unfocused. There are two primary kinds of direct mail self-storage owners use. First are mailers they send out independently. Second are those included in a co-op effort, such as Val Pak or the Money Mailer. Both can be effective if used correctly. In the case of either, there are five basic rules that apply:
1. You must have a powerful headline. You've got to get people to read your direct-mail piece before you can expect them to do something, so your headline is the single most important item on it. The headline should combine your greatest benefit with your customers' greatest need. An example would be: "How to Reduce Your Rent by 17 Percent." This will get your ad read if you are dealing with a lawyer, or any other businessperson, who is paying big bucks for office space. They want to cut costs, and freeing up space could save them a lot of money.
2. Think benefits. Most people with limited marketing knowledge tend to only list the features of their product or service. Make sure to include the benefits of the features as well. If you say, "All of our units are climate-controlled," be sure to add, "so your things will be protected from the extremes of heat and cold."
In a business like self-storage, it's easy to forget to add benefits to your features. They seem so obvious, but people don't necessarily make the leap to complete your thoughts. When you're in the storage industry and you hear someone say, "All of our doors are individually alarmed," we mentally add "so the manager knows when an an unauthorized person has entered a unit." But this missing piece doesn't exist for those who aren't in the industry. You have to put it out there for them.
3. Give people a reason to respond now. In any direct-mail piece, you want people to act immediately after they open it. If you can't get them to do it then, chances are slim to none they will do it at all. Make them a time-sensitive offer that is tough to refuse.
Consider an inexpensive gift of some sort. A small expense is nothing compared to what a new storage customer is worth. You want to make a very powerful offer to entice potential customers to call or come in and visit your facility. If nothing else, you at least want them to call your hotline. This will at least give you a chance to sell them on your facility.
4. Send out a series of mailers, not just one. It's better to pick a smaller group and mail to them two or three times than to increase the scope and size of your mailing. If you find a group worth targeting, they are worth mailing to more than once. The rule of thumb is that if you get a 5 percent response from your first mailer, then your second and third mailers should also give you a 5 percent response. I recommend you mail them a series. Have the second and third mailer refer to those pieces which preceded them.
5. Customize your piece to your market. A direct-mail piece to all business people will get very little response. Pick out a specific group and write to them. If you decide on lawyers, then write specifically to lawyers. Write the piece in their language and target their greatest needs. If you don't know how they speak, find a group of them and ask. Make sure you put yourself in their shoes before you start writing. If you don't, your piece will not be worth mailing.
#7: Yellow Pages
Yellow Pages are where most storage operators put the bulk of their marketing efforts. This is misguided. It isn't that advertising in the Yellow Pages isn't necessary, but in terms of ROMD, it ranks as the seventh most effective means of marketing.
I have a client who, when he first opened his self-storage business, put a full-page ad in his local Yellow Pages. Over the next five years, he was able to reduce his ad size until he now has just a line listing and nothing else. If you properly use all of the other marketing systems mentioned above, you can dramatically reduce your reliance on Yellow Pages advertising. Do it correctly and you can cut your Yellow Pages budget by a minimum of 50 percent. And, if you design your ads effectively, you can get the same level of response from an ad half the size of the one you're using now.
The most important part of any ad is the headline, but more than 95 percent of owners get this one wrong. They put the name of their facility at the top of their ad. This is absurd. The headline is the "ad for your ad." By putting the name of your facility at the top, you're saying the primary reason people should rent from you is because of your name. But no one will read through your ad just because of something so trivial.
The second biggest mistake owners make in their Yellow Pages ad is listing a facility's features without explaining their benefits. Research tells us that nearly 80 percent of renters will be first-timers, so keep this in mind. When you list the feature "climate control," you cannot expect people to understand the benefit implicitly. You need to also explain the feature's benefit. Finally, if you offer a hotline, make sure to direct people to it in your ad.
Follow these steps and your Yellow Pages ad response will skyrocket. Even though Yellow Pages are the seventh on the list of important marketing techniques, you still want to have one. Using this advice has doubled or tripled the response to some of my clients' ads.
In order to maximize your marketing effectiveness, you have to leverage your marketing efforts. Sure, you'll probably need a Yellow Pages ad, but making it the bulk of your marketing efforts is no longer sufficient. Prioritize your marketing efforts based on ROMD. Make sure to use the other six marketing techniques we've discussed here as well.
If you follow these suggestions, you'll find your budget for marketing can actually decrease over time without hurting your occupancy rates--which may actually go up. How much money would that save you? How much more money will you be able to put in your pocket? Stick to a sound marketing plan, and your ROMD will be substantial.
Fred Gleeck is a self-storage profit- maximization consultant. He helps storage owners before and after they get into the business. He is the author of Secrets of Self Storage Marketing Success--Revealed! and numerous other training items for self-storage operators. To get regular tips on self-storage, send him an e-mail at email@example.com; call 800.345.3325.