What is a storage facility’s target market? What factors are present in a strong, dynamic self-storage trade area? What do storage professionals need to know about their communities and neighborhoods? Why should you care about demographics and the direction of these and other trends? How do you identify your typical storage customers so you can go out, get more of them and exceed their expectations?
These are but a few of the questions to ask in determining the most cost-effective means of attracting and retaining storage customers—whether residential, commercial, military or student populations. For an existing store, these questions are easy to answer using current marketing and demographics reports. The data is compiled from the marketing questionnaire you should be giving to each and every customer.
As an industry, we sometimes lack answers and information because we aren’t using the tools available to us. If all you change about your operation is adoption of the following three actions, you will be well on your way to understanding and identifying your store’s market:
1. Have your software vendor program your management software to “force” your marketing and demographics questionnaire so the manager has to complete it with the customer before he can accept payment or complete the move-in process.
2. Before investing in any marketing or advertising program, be sure you have a way to track its effectiveness. For example, if you participate in an industry tradeshow in which you spend $500 on an exhibit and $300 on materials, you should know what that expense earns you in business. This will help you decide if you should participate again in the future.
3. Use this valuable marketing information. Don’t just glance over the facts or fail to even notice them. Once compiled on the summary marketing report, use the data to identify the programs that work for you as well as the ones that are overly expensive for the results they bring.
We’ve Got Your Number
Here is a summary of my company’s self-storage customer base: 80 percent is residential and 20 percent is commercial; 60 percent is male and 40 percent is female; 74 percent live within 5 miles of the facility; drive-bys account for an average of 40 percent of new business; the largest age group is 35 to 45 years old; and the average length of stay is 21 months. This does not, however, tell the whole story. Each of our 30-plus stores has a unique set of statistics.
For example, the store in Hilton Head, S.C., is filled with out-of-state clients who are older and more affluent. They want large climate-controlled spaces, auto-debit options and RV/boat parking. A store in Atlanta has close to 40 percent commercial clients, most of whom are in service businesses within 3 miles of the facility and are also very affluent. A store in Roswell, Ga., has been the nation’s largest independent U-Haul dealer for box sales five years in a row. It sells $10,000 worth of boxes each month and rents more than 50 units to one local moving company. A facility in Tulsa, Okla., has pre-leased 30 percent of its first phase to a hospital in the downtown area.
Every location, like its offerings, features and benefits, is unique. Knowing this will help you fine-tune your marketing programs for generating leads and new business. Tailor your marketing efforts to best suit the products and services each facility has to offer.
The Physical Area
Let’s take a look at some generally accepted marketing guidelines for a new location. To begin, most of us look at the demographics of the immediate 1-, 3- and 5-mile radius, including competitors in the area, types of businesses, traffic counts, average household income, etc. The denser the population and the higher the average income and traffic count the better. However, you should also drive through the entire market area and personally survey existing storage operators.
We all need to take a lesson from the Roman armies who, before a battle, would walk the ground where the skirmish was going to take place. They discovered natural hiding places and vantage points and had the edge when the fight finally began. Your market is generally considered to be the area within a 10-minute drive time of the facility (not during rush hour). Keep in mind any natural or man-made barriers that could separate market segments. For example, in Atlanta, I-285 surrounds the city like a giant circle. Those who live inside the circle would likely not consider going outside for products or services. In other instances, prospects won’t want to cross a river or enter a new county.
Knowledge is power, but it is only useful when put into action. Join and visit your local chamber of commerce and the city’s economic-development department. These are two valuable resources for understanding the local economy and the dynamics behind its growth and future development. Knowing the demographic characteristics of your target market is what you need to execute an effective marketing, leasing and customer-service campaign. Consider the following:
- You want to be in a growth or stabilized market where average incomes are above $75,000.
- Traffic count should be 30,000-plus cars per day that travel less than 45 miles per hour. Drive-by traffic for this type of location can represent as much as 60 percent of a store’s business and brings in nonstorage customers who buy boxes and supplies. A showroom for retail along with other amenities will be necessary, and you want a full line of services designed to attract commercial customers, especially if you are on a freeway exit.
- Is your facility’s community filled with military or college students, or is it primarily multifamily with lots of apartment renters, condominiums and retirement housing? If so, you’ll need more small units. Also, the average length of stay will be shorter and the average income per square foot will be higher.
- What percent of households are owner-occupied and how old are the homes? Recently built homes in a high-growth area with booming subdivisions will typically have higher value and income per household than those built 50 years ago in declining market areas.
- What percentage of the homes is renter-occupied? What is the apartment vacancy rate? What is cost per square foot of the average two-bedroom/two-bath apartment? This number should equal your average rental rate per square foot.
- Is the retail and business trade area on the upswing or declining?
Stores with high visibility, easy access, strong curb appeal and a unique product offering and style enjoy the lowest cost per lease and the most rapid lease-up. Once you have identified the characteristics of the surrounding market, you can begin to understand and plan for what you’ll need to attract customers to your location vs. the competition.
In the Trenches
When examining the competition, consider all possible angles. What do competing facilities offer by way of products and services? What are their office and gate-access hours? Do they have security and access-control systems? What about advanced technology, such as individual door alarms or biometric keypads?
Do your competitors have retail showrooms? What about an e-commerce website where customers can lease or reserve units or make payments? Do they offer free move-in trucks, referral programs, package-acceptance programs, climate control, RV and boat storage, contractor spaces, incubator offices, specialty vault storage, wine storage, records storage? What outstanding products and services will best existing self-storage operators while creating a strong appeal to the local market and the unique niches you may have uncovered?
Once you have the answers to these questions and gathered all the facts, sit down with your management team to brainstorm and work toward a complete understanding of the local area and surrounding neighborhoods. What is the market asking for, what is it responding to, how has it changed recently, and what gaps in products and services can you fill? Taking advantage of this critical information and acting on it yields increased traffic to the store, improved income, lower advertising expenses and happier, more confident team members who know their unique market and its possibilities.
M. Anne Ballard is President of Atlanta-based Universal Management Co. (UMC), which provides global consulting for evaluations, feasibility studies, training and development services. The company also does full-service fee management in the United States, where it manages more than 35 locations. For more information, visit www.universalmanagementcompany.com.