Nuts and Bolts of Marketing

The importance of research in meeting customer expectations

By Harley Rolfe

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

Research

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

You're lucky. You currently have a house-full of readily available tenants who arereceiving value from your facility. You want them to tell you what you are doing thatmakes it worthwhile for them to send you a check each month. This isn't difficult. Thestatistics involved are simple, and there are great tools available, such as personalcomputers. 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, orsegments. 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. Afterexamining the current tenants, you will do some prospecting to learn about past andprospective tenants.

Sales Research

Here we determine how each segment gains or benefits from the use of a unit. We needgood information to be accurate and believable with prospects. It often takes the form oftrials, studies or testimonials. It provides us with the objective data/information weneed to be credible with our sales claims. It further helps us understand how self-storagedelivers benefits to both personal and commercial tenants and coaches us on how to enhancethose 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 moreso. Hopefully, either you or someone close to your organization is available to do thiswork. Aside from cost is the matter of confidentially. The identity and composition ofyour tenant base is sensitive information.

What you're going to be creating is a database of all your tenants. Suitable and simpleprograms will permit you to examine what you have now and easily keep your changes andprogress up to date. The broadest breakdown is the distinction between commercial andpersonal. We know that, nationally, about 75 percent of the users are personal and 25percent 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 technicalhelp. It would be nice if there was a nationally recognized and defined list of the usertypes for the personal category. A residential move would be one example. You can examineyour tenant base and identify the others. There is no catalog of possible categories; youjust 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 abouteach.

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

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

Going to the total geographical area you serve, there will be an activity total of allpersons deemed as having potential for self-storage--segment by segment. Those that youpresently serve are the "capture" or facility share of that total. Another partis that being served by your rivals, which is obviously difficult to obtain. Gatheringarea or national data is often a role for industry associations. The comparison of thecollective capture (all self-storage operators) to the total segment population is thedegree of saturation. You want to end up with a segment-by-segment picture that isprimarily 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 theforward 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 bya prospect. They have nothing to do with the high-powered marketing stuff we've beendetailing. It relates to simple, basic tenant expectations. The problem is that thefacility doesn't get bonus points for meeting these expectations, but it will get hurt oreliminated 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 appearstattered or has sloppy office staff will suggest to a prospect that it's best they lookaround. Little things do count. A prospect depends on hints they can pick up in a shortvisit to clue them as to the overall picture. That may not be fair, but the prospect willfeel that if the facility can't take care of the two-bit items, they may not do much of ajob on the more important things. After all, they're placing their possessions in ourhands.

Excellent housekeeping has another solid benefit. The neat and clean appearance meansthat someone is out in the facility regularly keeping it that way, and nothing beats atrained pair of eyes in watching out for problem activity. Use good housekeeping as thebasis for claiming high interest in keeping a quiet facility. (Usually, it has to pointedout 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 theresidential move), we are in a position to design a set of features for each one we careabout. Treat each as if it were the only one in the facility. As a practical matter, toeach tenant, it is the only one there.

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

Location

Any time there is a discussion about the prosperity of any real-estate orientedbusiness, the wise men intone, "l-o-c-a-t-i-o-n." Indeed, location is certainlyan 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, somein industrial parks, some in residential neighborhoods, some in dense urban centers usingmultistory structures, etc. The most common suggestion is that thoroughfare locations aregood. 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 ofmedia (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 byretailers is well known. But the location advantage for self-storage is made up of morecomponents.

The thing we know for sure is that distance or proximity to something germane to thetenant is a main issue. Most tenants resist traveling very far from that point to storetheir 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 isimportant or the distance from the old residence? Or take an interior decorator that needsto remove furnishings from his job site to clear the way for his work: Is it the distancefrom his office or the distance to/from each job site that controls? Or consider adrop-point distributor receiving bulk goods from a distant supply point: Is it thedistance from an efficient, off-loading, interstate exit or the distance from theorganization's local office that controls that decision? Thus, it is used by particularsegments 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 thelocations 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 softwareprogram, such as one that I use by Rand McNally, you can quickly and precisely pinaddressees on a local street map.) Take about a 25 percent to 35 percent sample from analpha tenant file (to get randomness), and I think you'll be surprised at the widedistribution 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 thatthere is a very good reason. You were not chosen by lot. You were near some kind ofdestination that you may never have guessed.

There is another aspect of location that isn't talked about much--security. A locationthat is off the beaten track and even on a dead-end street can be effectively sold on thebasis of not being as vulnerable to drive-by or casual incidents. While the industry isloath to guarantee security or even talk about it much, security is certainly on the mindof 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 commerciallocal addresses is a determinant of location advantage--are incomplete. Only by knowingthe location preferences of segments can you obtain any real picture of the potential ofany given location. Likewise, only by knowing such things can you exploit the appeal of aspecific 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 amarketer is more than one of the terms of a business agreement. A question: What role doescost 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 includedexecutive-level marketing positions with General Electric and AT&T. He also ownedlodging and office facilities for more than 20 years. Mr. Rolfe holds a bachelor's degreein economics from Wabash College and a master's degree in business administration from theUniversity of Indiana. He can be reached at his home in Nampa, Idaho, at (208) 463-9039.