Attracting Commercial Tenants
|Copyright 2014 by Virgo Publishing.|
|By: Fred Gleeck|
|Posted on: 09/01/2002|
If you had twice as many commerical tenants as you currently have, how much more happy and profitable would you be? My guess is a lot more. Commercial tenants are great to have for three main reasons: First, they pay on time. Second, they tend to stay a lot longer. Third, they tolerate rent increases a lot better.
The average self-storage facility generally gets about 20 percent of its business from commercial tenants. I'd like to show you how to double that figure. It will take a bit of work, but it will be worth it.
Most operators take the passive approach. They wait for commercial customers to walk in the door. Do this, and you'll get what you've always gotten. Follow the steps below, and you'll see a dramatic increase in the number of commercial accounts. But this system will necessitate an active approach. If you're the "sit on your butt" type of manager or owner, you might as well stop reading right now.
Your efforts must have two components: an indirect and direct marketing piece. Before talking about each, let me ask you a question: If you had a heart problem, would you see a general practitioner? Of course not. You would go to a cardiologist, someone who specializes in that area. The same approach holds true with commercial tenants. They think their business is unique and want to feel as if they are dealing with someone who truly knows and understands the nuances of what they do.
If you think about it, everyone who rents from you, commercial or otherwise, wants to feel like you specialize in their particular area. If you could, you'd want to represent yourself as a specialist to everyone who walked in the door. Doing things this way will allow you to close a higher percentage of walk-ins and charge higher prices. This being the case, you'll want to go to your computer and create some brochures and other promotional materials that make it appear as if you specialize in working with commercial tenants. Very few storage operators I've seen have a brochure specifically targeting this segment, but they all should.
Prepare one or more promotional pieces that "prove" you're an expert in this area. These items will be essential in the direct and indirect contact you'll be making. When you put this material together, remember the single greatest benefit for these folks: the reduction of storage cost per square foot. An additional, less important benefit would be the reduction of clutter in their offices. Make sure to include these two key benefits as well as any others you can think of in your promotional material.
Now that you're armed with the literature you'll need, get out a compass and a local map. Draw concentric circles at distances of half, one, two and three miles from your facility. You now have your target area.
You'll now want to go out and personally introduce yourself to the businesses in that market area. Start with those closest to you and work outward. Keep a list of who you visit with notes about them and the conversation you had for future reference and follow-up.
The biggest obstacle to anyone doing this is the fear of rejection, which is true in any sales situation. If you feel this way, trust me, you're not alone. But put aside the fear factor for a moment and look at the numbers. If the average commercial tenant will spend $70 on rent and stay for an average of 12 months, you're looking at a gross revenue from each commercial renter at close to $1,000.
Let's assume you have to visit 20 people to get one of them to rent from you. This is a high estimate. If these numbers were correct, each time you walked in the door of a commercial tenant, the sales call would be worth an average of $50. So when making your sales calls, think of your walking in the door as the mere collection of a $50 bill. The averages will tell you it's true.
Before you walk in the door, you'll want to be armed with two things: first, your promotional literature, and second, your sales pitch. The pitch you develop should clearly communicate that you are competent and easy to deal with. Do not make the mistake of assuming any particular business would not be interested in storage. Just keep in mind this idea of going into the establishment to pick up the $50.
After you leave, make some notes about the business and the individual with whom you spoke. Also make a note (on a scale of one to 10) of the person's degree of interest. For the most part, you won't want to do much follow-up on those who are less than a seven or eight. But with those who showed some serious interest, follow up and try to get them to visit your facility. Remember the steps: make contact, get them interested, get them to visit and get them to sign on the dotted line. You can not skip steps.
Even though I recommend doing less direct mail, it should be a component of your marketing efforts to capture commercial tenants. The intent of your direct mail should not be to sell storage. This will prove a complete waste of time, money and postage. You cannot sell a concept to someone with one piece of mail. You must understand the process of seduction--yes, seduction!
Just as in the process of dating and mating, people are reluctant to "buy" the first time they see or hear from you. Your first piece of mail must give readers a compelling reason to pick up the phone and call. Let them call and discuss their storage needs. This is the second "date," if you will. The only purpose of the mail piece is to get people to pick up the phone and call you, nothing else. Once they call, list the benefits of commercial storage to them. Ask questions to assess their needs. Then get them to visit and sign a rental agreement.
You'll also want to have a section on your website that highlights the work you do for commercial clients. Have a page or section on your site that specifically targets these clients and demonstrates you're an "expert" in this area.
It would be nice if you could make yourself look like a specialist to every person who visited your site (and the market segment they represent), but it's impossible to do effectively. Since the website is viewed simultaneously by many, it's difficult for you to look like an expert in more than two or possibly three areas. Instead, just use your site to show you are a specialist in residential and commercial storage. Stick to these two broad categories.
You'll also want to get great search-engine placement for your local area to attract your target market online. Getting high placement in the search engines is an art and science all its own. (You can do an archive search at www.insideselfstorage.com for more information on this topic.)
Do the Work
All this might sound pretty good to you and you want to proceed. Now the question is, who will actually do all this? If you're an owner, don't leave it completely to your manager. You'll have a much higher closing ratio when you make some of these sales calls yourself. Why not go out together and see how each of you do? Practice the pitch and critique each other. As an owner, doing this will let you know how much work it really is and how effective it is. Managers will get practice making the sales calls and prove to owners it's worth the investment of time.
Marketing to commercial clients should be just one segment of your entire marketing plan. A complete marketing program will have each market segmented and a plan for maximum penetration and effect. The thing you should consider with any marketing effort is how many dollars you spend vs. how many you collect. Commercial tenants will be just one of your target groups. Ask yourself: If I could double my commercial-tenant base, would I be willing to follow the prescription above? It would make you a lot more profitable. Think about it. I'm sure you'll agree it's well worth the effort.
Fred Gleeck is a self-storage profit-maximization consultant who helps owners/operators during all phases of the business, from feasibility studies to creating an ongoing marketing plan. Mr. Gleeck is the author of Secrets of Self Storage Marketing Success--Revealed! as well as the producer of the only professional training videos on self-storage marketing. To receive a copy of his Seven-Day Self-Storage Marketing Course and storage marketing tips, send an e-mail to firstname.lastname@example.org. For more information, call 800.FGLEECK; e-mail email@example.com.