Nuts and Bolts of MarketingThe importance of research in meeting customer expectations

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Nuts and Bolts of MarketingThe importance of research in meeting customer expectations

By Harley Rolfe

Ever watch a photo emerge in a darkroom? The previous hard-nosed columns articles--as well as this one--have provided you with the tools to "develop" the picture of your market structure. So far, in the phases we've described, you haven't been called upon to spend much cash on marketing. We want to keep it that way. If you are as successful as I want you to be and have determined exactly who, why and what you want to influence, you can avoid much use of general media. That's the only way to avoid some prodigious costs and still be a force in your market area.

Research

The first thing an informed observer will examine when shown a marketing plan is the underlying research. Without that, a facility is just guessing. Not everything is quantitatively measurable, but we do need to measure what we can.

You're lucky. You currently have a house-full of readily available tenants who are receiving value from your facility. You want them to tell you what you are doing that makes it worthwhile for them to send you a check each month. This isn't difficult. The statistics involved are simple, and there are great tools available, such as personal computers. There are two basic information types: market and sales research.

Market Research

This involves coding all the users in the facility into common user groups, or segments. It is the planning tool that establishes and records what and how we're doing. It deals with totals. That is, it deals with the collective activity of segments. After examining the current tenants, you will do some prospecting to learn about past and prospective tenants.

Sales Research

Here we determine how each segment gains or benefits from the use of a unit. We need good information to be accurate and believable with prospects. It often takes the form of trials, studies or testimonials. It provides us with the objective data/information we need to be credible with our sales claims. It further helps us understand how self-storage delivers benefits to both personal and commercial tenants and coaches us on how to enhance those experiences.

We mentioned that the use of a computer for this kind of work is desirable. Fortunately, the cost of PCs and the associated programs are affordable and getting more so. Hopefully, either you or someone close to your organization is available to do this work. Aside from cost is the matter of confidentially. The identity and composition of your tenant base is sensitive information.

What you're going to be creating is a database of all your tenants. Suitable and simple programs will permit you to examine what you have now and easily keep your changes and progress up to date. The broadest breakdown is the distinction between commercial and personal. We know that, nationally, about 75 percent of the users are personal and 25 percent are commercial. That's a start, but we can't build an approach around just that.

The largest portion of our tenant base provides us the least amount of coding technical help. It would be nice if there was a nationally recognized and defined list of the user types for the personal category. A residential move would be one example. You can examine your tenant base and identify the others. There is no catalog of possible categories; you just look around. You need to uncover the segments in your facility and your service area. Part of hard-nosed marketing is identifying your segments and having good insight about each.

When you get to the commercial category, there is good help in the form of the Standard Industrial Codes [SIC]. This is the hierarchical system designed and maintained by the Department of Labor (Bureau of Labor Statistics). You will recognize this as the way the Yellow Pages structures their listings. It means that each of your commercial customers presently has an SIC code. You can use these to profile the commercial tenants in your facility and know that you are consistent with all such businesses in your area and throughout the country.

There are companies that provide those codes for all businesses. Some identify and tag growth companies. Once you have the profile, you can learn how each SIC category gains utility from storage. You will have the fodder you need to take the word to other kindred businesses. You do so with confidence because now you know exactly how each member of that group can benefit.

Going to the total geographical area you serve, there will be an activity total of all persons deemed as having potential for self-storage--segment by segment. Those that you presently serve are the "capture" or facility share of that total. Another part is that being served by your rivals, which is obviously difficult to obtain. Gathering area or national data is often a role for industry associations. The comparison of the collective capture (all self-storage operators) to the total segment population is the degree of saturation. You want to end up with a segment-by-segment picture that is primarily of interest to marketers and a collective story that is of interest to everyone. We have sketched the need for research that will give us the guideposts we'll need for the forward planning period--usually one to two years.

Meeting Expectations

There are a number of pieces that must be in place to have a facility be considered by a prospect. They have nothing to do with the high-powered marketing stuff we've been detailing. It relates to simple, basic tenant expectations. The problem is that the facility doesn't get bonus points for meeting these expectations, but it will get hurt or eliminated if they don't. We call that "getting up to zero."

We're referring to such things as good telephone manners, good grammar, neat offices, pleasant and knowledgeable personnel, tidy grounds, buildings that are in good repair, etc. While none of these things will sell a prospect per se, a facility that appears tattered or has sloppy office staff will suggest to a prospect that it's best they look around. Little things do count. A prospect depends on hints they can pick up in a short visit to clue them as to the overall picture. That may not be fair, but the prospect will feel that if the facility can't take care of the two-bit items, they may not do much of a job on the more important things. After all, they're placing their possessions in our hands.

Excellent housekeeping has another solid benefit. The neat and clean appearance means that someone is out in the facility regularly keeping it that way, and nothing beats a trained pair of eyes in watching out for problem activity. Use good housekeeping as the basis for claiming high interest in keeping a quiet facility. (Usually, it has to pointed out to a prospect.)

Design of Offerings

We're putting to work the revelations of our examination of the various segments. Having dissected the segments that are important to your facility (as we just did with the residential move), we are in a position to design a set of features for each one we care about. Treat each as if it were the only one in the facility. As a practical matter, to each tenant, it is the only one there.

The only way that a price war can occur is when the user believes that all the contenders are the same. Much of the industry does little to interrupt the customer belief that various self-storage operations are very similar. We must compose offerings that defeat the ability of buyers to regard all facilities as the same. Then, simple commodity comparisons cannot occur. The surest way to do so is to have offerings that are specifically useful to the key segments the facility wants to attract. The facility is not likely to have grand, killer features that give it exclusives for everyone. But, it certainly can do so a segment at time.

Location

Any time there is a discussion about the prosperity of any real-estate oriented business, the wise men intone, "l-o-c-a-t-i-o-n." Indeed, location is certainly an important consideration. But, what happens when one says, "OK. Tell me what a 'good' location is." That's when the fun starts.

All of us have seen all kinds of successful locations. Some are on thoroughfares, some in industrial parks, some in residential neighborhoods, some in dense urban centers using multistory structures, etc. The most common suggestion is that thoroughfare locations are good. That is a retail orientation. Locations of that type are actually a type of media. They expose the facility to thousands of passersby in the same way that various types of media (radio, TV, newspapers) hammer away through repetition of the advertiser message. For a retail store that is a real plus, and the premium paid for such locations by retailers is well known. But the location advantage for self-storage is made up of more components.

The thing we know for sure is that distance or proximity to something germane to the tenant is a main issue. Most tenants resist traveling very far from that point to store their stuff. The question becomes, distance to or from what? A couple of examples: Consider our famous residential move. Is it the distance from the new digs that is important or the distance from the old residence? Or take an interior decorator that needs to remove furnishings from his job site to clear the way for his work: Is it the distance from his office or the distance to/from each job site that controls? Or consider a drop-point distributor receiving bulk goods from a distant supply point: Is it the distance from an efficient, off-loading, interstate exit or the distance from the organization's local office that controls that decision? Thus, it is used by particular segments that will determine the appeal of a given location.

If you are located in a sizable community (125,000 or more), do a study on the locations of your tenants. Spot the locations you serve on a street map using tenants' lease addresses. (You can do this by hand with a marker or, using a cheap software program, such as one that I use by Rand McNally, you can quickly and precisely pin addressees on a local street map.) Take about a 25 percent to 35 percent sample from an alpha tenant file (to get randomness), and I think you'll be surprised at the wide distribution of home or office addresses of your tenant base. Many will be located nearby. But why have you attracted all those others? Contact them and ask. You will find that there is a very good reason. You were not chosen by lot. You were near some kind of destination that you may never have guessed.

There is another aspect of location that isn't talked about much--security. A location that is off the beaten track and even on a dead-end street can be effectively sold on the basis of not being as vulnerable to drive-by or casual incidents. While the industry is loath to guarantee security or even talk about it much, security is certainly on the mind of tenants. Anything that would seem to subdue that problem is an important bonus point.

Studies that have been done--assuming that the density of either personal or commercial local addresses is a determinant of location advantage--are incomplete. Only by knowing the location preferences of segments can you obtain any real picture of the potential of any given location. Likewise, only by knowing such things can you exploit the appeal of a specific location--off the beaten track is often successful, and cheaper.

We've saved the best for last--pricing. Next time we will show that a price for a marketer is more than one of the terms of a business agreement. A question: What role does cost play in the setting of prices? You may be surprised.

Missed some previous issues? Check the Web at www.hardnosed.com.

Harley Rolfe is a semi-retired marketing specialist whose career included executive-level marketing positions with General Electric and AT&T. He also owned lodging and office facilities for more than 20 years. Mr. Rolfe holds a bachelor's degree in economics from Wabash College and a master's degree in business administration from the University of Indiana. He can be reached at his home in Nampa, Idaho, at (208) 463-9039.

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