Solving the Mystery of Self-Storage Market Demographics
|Copyright 2014 by Virgo Publishing.|
|Posted on: 04/05/2013|
A Guest Installment by Jim Chiswell, Owner, Chiswell & Associates LLC
In preparation for a recent visit to a client’s self-storage facility, I reviewed various management reports and really got a kick out of a portion of their customer-profile information. Under the column titled “Male or Female,” the data showed, Female = 34, Male = 22, Unknown = 347. Really? You can’t tell the difference between female and male as you talk to each other across your desk or counter? Let’s be honest; the answer is “Lazy” not “Unknown.”
This got me thinking about how little I hear about owners and managers using all the various pieces of demographic data available to them. The male/female answer is important because once you fully realize that 65 percent to 75 percent of your residential customers are female, you might rethink what is in your bathrooms, what art you have on the walls in your office or maybe consider adding some plants inside the office.
Zip code information is like gold. Not just the five-digit code, but the full nine-digit code. Once you convert all customers to the nine-digit zip code and transfer the data to a digital mapping program, you will arrive at a very clear understanding of just where your customers are coming from in your market. If you have four or five customers from a specific apartment complex, for example, that will show up clearly. It makes your next call on that apartment complex manager totally different when you can say you already have five of their tenants as customers: “So here are some more storage brochures for your Welcome Packets.”
If the average length of stay for customers using 10x20 and 10x30 units is 16 months, can’t I be a bit more aggressive on the discounts to secure them as a customer? What is the average 5x10 customer, who you discover is renting an average of only three months, really worth to you? Depending on your data, you may consider a program for customers renting smaller units, especially college students, in which they can only rent for a minimum two- or three-month period paid in advance.
How are you doing on the percentages of folks paying via auto pay vs. checks vs. cash? Are you finding a significant difference in the length of stay based upon how they prefer to pay their monthly rent? You will never know the answer if you don’t take the time to solve the mystery of this and other demographic data points.
Are you tracking where your customers live even after they become a tenant? How many times has a customer who now lives 20 miles from your facility moved? Many times over the years I have found that existing customers, who are beyond the traditional target market of four to five zip-code areas or a five- to 10-minute drive time, have moved more than once. You might consider someone’s distance from your self-storage facility as you implement your rate increases. Could your attempt to significantly raise the rent of customers who now reside far away from the facility finally make them realize it is time to move their stuff? Just something to think about.
There are countless data points of demographic information that you should be putting under a magnifying glass at least a few times per year to watch your internal trends. The big operators are doing this and learning and growing from this knowledge. Why shouldn’t you?
Jim Chiswell is an industry veteran and owner of Chiswell & Associates LLC. Since 1990, his firm has provided feasibility studies, acquisition due diligence, mentoring and customized manager training for the self-storage industry. He has served for a number of years on the Inside Self-Storage Editorial Advisory Board, is a moderator on the SelfStorageTalk.com interactive online community and is faculty member of the Self-Storage Training Institute. He can be reached at firstname.lastname@example.org or www.selfstorageconsulting.com .