General Guidelines
Copyright 2014 by Virgo Publishing.
By: Fred Gleeck
Posted on: 11/01/2001



 

Direct mail can be a very cost-effective marketing technique for storage operators. The problem is many people have been given a lot of misinformation about it. I'd like to clear up some of the misconceptions and give you specific suggestions on how to maximize your effectiveness when you use this method of marketing.

First, let's cover some basics. No matter what kind of marketing you're doing (and that includes direct mail), make sure your results are trackable. I only have one sign in my office. It reads: "Measurement Eliminates Argument." To "measure" direct mail, insist prospects either bring in the direct-mail piece when they visit you or that they give you a code from the direct-mail piece to receive a certain discount. Without tracking your results, how will you know whether something is working? The answer is: You won't.

Second, you have two types of direct mailing you can use: You can either send out a "solo" piece or participate in some kind of co-op mailer. The second category would include things like Val Pak or Money Mailers, where your piece is included with a group of other coupons from other vendors.

Lastly, remember how to judge the effectiveness of your efforts. It is strictly a matter of dollars spent vs. dollars generated. If you spend $1,000 and generate $5,000, you've made $4,000. In the storage business, the revenue generated does not come in immediately. It comes in over a period of time as an annuity in the form of rent. If you generate 17 additional renters, they won't pay in advance (but if they offer to do so, please don't refuse them). The money from these new tenants will come in on a monthly basis.

Measure your dollars generated based on what your average tenant generates for you. National averages tell us a tenant will generally stay for approximately seven to eight months and he will pay somewhere around $70 per month for a unit. Multiply these averages together and you get approximately $500. Cut that number in half to cover your "hard costs" of doing business and you get $250. Assuming every fifth tenant will send you a referral, you need to add back $50, which leaves you $300 total. That's the dollar amount you can assume each tenant will be worth to you.

When assessing the effectiveness of your direct-mail efforts, you also have to realize that return on marketing dollar (ROMD) is a crucial tool to measure your efforts. You naturally want to concentrate your efforts in those areas where you get the greatest return for your time, energy and money. If you pay $1,000 and get $5,000, that's good. If you spend $1,000 and generate $7,000, that's better. However, you have to consider another very important fact: There are some renters who may not respond to the most cost-effective means of marketing. The reason? That particular method of marketing does not cause them to buy. You still want to try and capture them through some other means of marketing.

General Guidelines

You must employ a variety of marketing methodologies in order to be the most successful you can be in the storage industry. Direct mail is just one of many methods you can use. That being said, here are some general guidelines that apply to solo and co-op mailings.

Headlines. What you print at the very top of your mail piece is crucial to its success. Take your biggest benefit and match it with your potential renter's greatest need. If you don't grab people's attention at this point, you've lost them forever. You have one shot, so make it your best one.

If you are targeting a very specific niche, go after it directly in your headline. Don't be guilty of a watered down, slushy headline--go for the jugular. An example might be, "How every lawyer can cut his rent by 17 percent, virtually overnight." You would then make the case for how most lawyers inevitably have one room in their offices piled with junk and generating no revenue.

Codes. Make sure you have a code number or numbers on each direct-mail piece you send out. Without a coding methodology, you have no way of measuring results. This is not an optional item.

An irresistible offer. If you're going to use direct mail at all, give prospects your absolute best, super-duper-deluxe offer. Don't try and build up to the offer over time. Make prospects take action now. This means giving them something of high perceived value with low or no cost to you. Go out to the vendors in the local area and get them to give you some special offers you can give away in the form of a coupon. Bundle them together and calculate what the entire package would be worth. Then, in your offer, tell prospects if they visit your facility and bring your mailer, you'll give them $349 (or whatever the value is) in free coupons.

Web page. If you've captured folks with a great headline and sucked them in with an irresistible offer, you may also want to direct them to a website. Then you can let the site sell them. By getting people to take this extra step, they have gotten slightly more committed to doing business with you. This doesn't mean you don't try and sell them with your direct-mail piece alone, but it does mean you can use the website as your backup.

A "you" piece. Most direct-mail pieces I see boast about the organization selling the services. They say something like, "We've been in business for 105 years ... blah, blah, blah." My response to that kind of drivel is, so? What can you do for me? How can you save me money, time, etc.?

Don't make this same mistake. Concentrate not on your storage facility, but on how prospective tenants can benefit from using your services. The best way to do this is to always pair features with benefits. This works perfectly with direct mail and when you're speaking to prospects on the phone. For example, don't say "We have 14 different size units." Instead, explain the benefit this creates: "You never pay for more space than you need."

Design elements. When you design a direct-mail piece of any length, make it simple. You can still make it professional, but don't complicate the issue. Remember the saying: "A confused mind always says 'no.'" Stick to one or two typestyles only. If you include a graphic, make it simple and relevant. Graphics should illustrate a problem your storage facility addresses. This means you should avoid using a picture of your facility. I don't care how nice it looks--it will not be your most effective use of space.

Solo Mailers

Solo mailers are those you send out on your own. You design and mail them (or get the help of qualified expert)--you do the work. Done correctly, this can be an intelligent marketing strategy. Within the category of solo mailers you have two primary options: postcards or mailers enclosed in envelopes. Both can be effective when used appropriately.

Postcards. The beauty of postcards is they are cheap and easy to create. You can make a decision to do a postcard mailing and, in less than 48 hours, they can be out the door. They also get the message into the hands of people without them having to open a letter--they are delivered "unwrapped." Because your message is not covered in an envelope, it doesn't involve that extra step.

Letters. If you choose to test a letter over a postcard, remember some key elements: First, never use labels, as they scream "junk mail." Instead use a plain white envelopes with stamps (not metered mail), and have letters hand addressed. I've seen response rates jump more than 800 percent just by following these simple steps.

Always pick a small group to test with your envelope mailer and make sure and send it more than once. Send your first mailing and, 10 days later, follow up with a second mailer referring to the first. Follow up another 10 days later with another one referring to both previous ones. While this may sound cumbersome, it will be worth hiring some high school kids to hand address the envelopes if you get the response rates. Also, I wouldn't test this on more than 1,000 prospects at a time.

Co-Op Mailers

Val Pak and Money Mailers are the two most popular co-op mailers around. If you know of any others, please let me know. These two will mail your offer to a given area or ZIP code for around $500. Remember the numbers--if you get just two renters from the mailer you've nearly broken even.

The same rules apply to these co-op mailings as to others. Don't be talked into a fancy design for your ad. The best design is one that pulls the best results. If everyone else's mailers are four-color, consider using black and white. If everyone else's ads have lots of pictures and graphics, consider designing one without any. And don't listen to the sales reps for these organizations who claim you need to mail repeatedly to get results. If you don't get good results from your first effort, you simply need to change your offer.

Mail to Whom?

To whom do you mail your postcard or letter? Certainly not anyone outside of a 3- to 5-mile radius, though a 3-mile radius is probably the best. Do you mail to a generic list of homeowners? There is an operator in my neighborhood in Las Vegas who does this. My suspicion is he does not have any tracking system in place. Why? It would have proven this method to be a waste of time.

You should target a group. Test small. Target a specific niche such as lawyers or doctors, or target a very specific neighborhood. (Don't forget your own!) Once you've decided which group to target, it's fairly simple to hire a company to produce a list for that particular group. If the list company has a minimum-purchase requirement on the size list you must buy, there is no law that says you have to mail to everyone on the list. If you have to purchase a list of 3,000, only mail to 1,000 and put the other addresses aside until you get some results.

Consider Professional Help

No, not psychiatric help! (Unless, of course, it's warranted.) I mean help with your mailings. You should try and follow the above recommendations on your own; but if you can't, call a qualified expert to assist you in writing and designing your direct-mail pieces. Beware of advertising agencies. These folks get paid regardless of whether the campaign works. They have a vested interest in one thing and one thing only: you paying the greatest amount of money. Why? Because their compensation is almost always a percentage of the total media dollars spent.

If direct mail isn't a portion of your marketing efforts, it should be. Don't expect to generate loads of cash on your first efforts. Follow the guidelines above and you'll be happy with your results--maybe not immediately, but after some intelligent tweaking of your mail pieces. Good luck.

Fred Gleeck is a self-storage profit-maximization consultant. He helps storage owners before and after they get into the business with services including feasibility studies and onsite marketing audits. He is the author of Secrets of SelfStorage Marketing Success--Revealed! and numerous other training items for self- storage operators. To get regular tips on self-storage, send Mr. Gleeck an e-mail at tips@selfstoragesuccess.com; or call 800.345.3325.