Implementing a Coupon System
|Copyright 2014 by Virgo Publishing.|
|By: Fred Gleeck|
|Posted on: 01/01/2002|
I've written in past columns about the importance of each self-storage facility having a unique selling point, or USP--something it offers that customers can't get anywhere else. Having a USP allows you to differentiate your facility from others and compete on some basis other than price. The problem is most self- storage owners and managers associate a USP with items or practices that take significant time and money to implement, such as installing individual door alarms. In reality, a USP can be simple and inexpensive to create. One particulary effective USP is the "coupon system."
How It Works
Create a list of all of the retailers within a three-mile radius of your facility. This would include restaurants, dry-cleaners, quick-lube services, etc. You will approach each business to request coupons for its products or services that you can pass on to your customers.
Starting with those retailers closest to you, visit each one. When you walk in, ask to speak to the owner or manager--preferably the owner. Use this approach: "Hi, my name is Fred, and I own the self-storage facility down the block. I'd like to help you increase your business at no cost to you. Would you be interested?" If he says "no," just walk out. There is no reason to try and convince someone he can use more business. There will be plenty of others who will be enticed by your offer.
If the owner is interested, ask him if he has coupons you can use to direct people to his establishment. If he does, explain you would like to distribute those coupons to your customers. No savvy business owner will object. Also explain you'd like to mark each coupon with some kind of identifier so he can recognize your referrals. This could be a small red "x" in the lower left-hand corner or anything else you might want to use.
If the retailer doesn't have coupons (which, from my experience, will be less than half of those you approach), show him a sample, generic coupon you've created on your computer. Tell him you'll be glad to create a coupon for his business based on whatever discount he is willing to offer. Encourage him to give out something signficant so the response rate will be higher. The best offers involve a two-for-one deal, but a 20 percent or 30 percent discount is good, too. You can also suggest discounts of flat dollar amounts, such as $5 off a $30 purchase.
Make these recommendations, but let the retailer decide. Then, once you've created the merchant's coupon on your computer, bring a copy to him. Have him sign off on a sheet indicating his approval. You should also have him sign a simple release form that guarantees he will honor the coupons.
Your goal is to get as many coupons from as many merchants as possible. The higher the dollar value of each coupon the better; but it is more important to get a maximum number of merchants to give you something.
Let's assume you convince 30 retailers to cooperate. The value of each coupon will probably fall in the $5-$10 range, or possibly higher. The total value of the coupons is then a minimum of $150. With a little bit of time and effort, you have created a bonus that costs you next to nothing, yet has more than $100 in perceived value.
How to Use It
The coupon system allows you to offer prospects something of value. Now, when a potential tenant calls inquiring about a particular unit, you can say: "I'd be happy to give you the price on that unit size; but before I do, I'd like to tell you about a special we're running. If you stop by to take a look at our facility, we'll give you a book of coupons worth $150--even if you don't rent from us. And the coupons are from local merchants you probably use every day."
The goal of the coupon concept is to provide the USP that will entice callers to come in and visit your facility. We know if you can get them to visit, more than 90 percent of them will rent from you. In offering them coupons, you are giving them something with an incredibly high perceived value but very minimal cost to you. I know of one operator who collected 44 coupons from local merchants. Each coupon package cost him less than $1 to provide, but contained coupons equaling more than $700.
Take all of the coupons you've collected and put them together in a large envelope. Print the total package value in large numbers on the outside of the envelope. When people come in, hand them the coupons immediately. By doing this, you create an obligation for them to at least look at a unit. They "owe" it to you--you've given them something of value, and the tendency of human nature is to give something back.
Managers are sometimes resistant to the coupon system. The main reason is it involves some outbound marketing efforts. Someone from the facility will have to go out into the community, approach the merchants and make the pitch. It's an endeavor, but there are additional benefits. First, you get to meet the merchants in your market area and let them know about your facility. There is nothing better than meeting people face to face to encourage referrals.
Another important benefit is once you implement this program, people to whom you've given the coupons will start to redeem them. Later, when you visit the participating merchants (which you should do every three or four weeks), they will be delighted to see you. You've helped them build their business. You may get some free perks out of gratitude; but, more important, these merchants may now be willing to let you put coupons or fliers for your facility on their counters.
There's more: At some point, your friendly merchant is at a cocktail party. Someone in a conversation mentions his need for storage. What do you think this merchant is going to say? Naturally, he's going to recommend you and your facility. Why shouldn't he? You've been sending him a steady stream of customers.
There is absolutely no downside to this system. Yes, it will take some time; but it is time well spent. You'll be able to offer something of value to your customers. If you don't have any other USPs, this can serve as a way to differentiate your facility from the competition. If you have another USP, use this one to augment it.
Earlier, I mentioned a self-storage operator who collected 44 coupons from local businesses. It took him about 40 hours to put his coupon system in place; but, as a result, the number of calls converted into visits at his facility rose from 40 percent to 50 percent. Those kinds of increases can make a huge impact on your bottom line.
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 email@example.com. For more information, call 800.FGLEECK; e-mail firstname.lastname@example.org.