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Containerization: A New Marketing Edge

Harley Rolfe Comments
Posted in Articles, Archive

The simplest and most profitable type of self-storage operation is one that operates as a commodity. It offers conventional self-storage units with no bells or whistles. If an owner can operate that way, stay full and apply steady rate increases over time, he is in self-storage nirvana.

I know there is a lot of talk about the increasing role of marketing in the self-storage industry. The reason to engage in marketing is to solve a problem confronting the operation and, usually, the problem is the onset of competition. I sometimes speak to an operator who tells me he has a killer feature that saves him from aggressive competitive pressure and, generally, it's location. Then I ask if he regularly gets calls asking for the rates on a 5-by-10 or 10-by-20. If he says "yes," I know his prospects don't regard him as unique and he is being shopped.

With competition comes the endless tussle to make your offering different and, hopefully, better. The process is continual; the ideas that work will be copied and you'll drop the ones that don't. Our job as marketers is to continuously come up with approaches that dazzle prospects and confound rivals. Let's take a look at one approach that holds promise.

Horse of a Different Hue?

In the January 2001 issue, I commented on the market power of convenience in the design of self-storage offerings. When convenience is evident to a prospect, he will accord preference and premium to it. "Preference" means he buys your product over that of others, and "premium" means he'll pay more for it. Since tenants often dread the grubby work associated with the use of our product, an approach that relieves that woe is welcome.

One approach does just that. Known by several names, I'll refer to it as "containerization." You may know it as mobile or portable storage--the use of transportable vaults to store tenants' property. The portable storage unit is delivered to the tenant's home or office, filled with his property, then picked up and transported to a storage location until the tenant is ready to access it again. This approach offers several advantages for a self-storage prospect:

  • The use of a self-storage unit is always hobbled by one choke point--transportation. The prospect must have a way to transport his belongings to his unit. While business/commercial/government entities usually have ample transportation, personal-use prospects often do not. Facilities offering the container approach solve the problem for the tenant.
  • With portable storage, the prospect does not have to handle his stuff twice, moving it into and then out of the conventional storage unit. He loads it once at home and unloads it once at the final destination.
  • As an operator of portable storage, you become a warehouseman rather than a landlord and accept liability (insured) for damage to or loss of the prospect's possessions. You may not consider that to be an advantage, but your prospect will.

The portable-storage approach also offers some advantages to the operating facility:

  • Your effective service area is no longer confined to physical proximity to your address. Considerations of location disappear. The effective service area goes to many miles--I've heard as many as 35. That kind of radius will usually include the whole metropolitan area and some cornfields to boot.
  • You can use any size storage unit you happen to have available to store vaults--it's your choice. You orient your offering/pricing to the number of containers the user needs. The fact is, you don't really need a regular self-storage unit as long as you can protect the containers from the elements and offer security. I once suggested to an operator that the approach didn't even require he be in the self-storage business. He could just operate with trucks, containers and any storage area that offered physical protection and security. He disagreed. I never knew why.
  • The cost of entry to an existing self-storage operator is not high. Initially, you can rent trucks with suitable loading accessories. If you confine pickup and delivery days, you can use low-rent periods to further control your start-up costs. Since the tenant loads the containers, the only facility personnel needed is a driver who can handle loading containers on and off the trucks. You would also need some suitable material-handling equipment (also rentable) and containers.
  • Portable storage is different, and that's always a marketing advantage. It prevents the prospect from directly comparing your offerings with those of rivals. That's the only way out of the commodity spiral. The trick is to be different and better. This approach qualifies.
  • Once operational, container storage is a crafty way to test a new market. You can rent any suitable space in a proposed market area and be functional with very little preparation.

Keep in mind not all storage applications are well served by the portable-storage approach. Applications that require regular access are awkward. The way to accommodate that situation is to have a secure room dedicated to a particular tenant for purposes of access. The container is taken from its normal location and placed in the access room. But there is administrative clumsiness in this approach. The tenant must make and keep an appointment to get to his property and, inevitably, he must be charged extra for that effort. But in situations where the tenant can store the container and forget about it, the container approach is superb and should earn you the convenience premium.

The portable-storage option gives you the chance to tout something new and different. I've written before about the power of choice in appealing to tenants. Many of the options offered tenants are contrived. This one is for real. It offers a real difference replete with great advantages. Even if few actually take advantage of the option, you can change the focus of tenant consideration from choosing among rivals to choosing among your offerings.

As the press of competition increases, more operators will be searching for ways combat it. Many will make their appeal through traditional self-storage. Others will understand that to be truly unique, they need to look at the problems confronting prospects and solve them. And that solution may be the offering of portable storage.

Harley Rolfe is a semi-retired marketing specialist whose career includes 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. Further information can also be found in Mr. Rolfe's book, Hard-Nosed Marketing for Self-Storage.

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