Let’s talk about financeas it relates to the marketing of your self-storage business. First, you need to understand the concept of “return on marketing dollars” (ROMD). You want to spend the least amount possible on marketing while maximizing your return. Most owners go for Yellow Pages advertising before any other marketing technique, but surprisingly, there are six other methods that are far more profitable, dollar for dollar, and more efficient than Yellow Pages:
- Repeat Customers—Treat people right and provide them with great service, and they will come back and use you when the need for storage arises again. If you can, send past customers a postcard every quarter to remind them that you’re still there or to tell a friend about your business.
- Referral Customers—Encourage existing customers to tell others about you and your facility. You can offer them any number of incentives to do so, but the most important thing is to ask them for the referral. The best time, obviously, is immediately after you have helped them with something or otherwise pleased them.
- Storage Hotline—Every facility should have an automated response (answering machine or voicemail) hooked up to a separate hotline number. The message should be educational, explaining storage use to customers and highlighting the benefits of your particular site. A hotline is a great way to publicize, because people are more apt to call when they know they won’t get trapped on the phone with a salesperson.
- Centers of Influence—Find people in your community who are in a position to influence the decisions of others, and convince them to recommend your business. Centers of influence include apartment-complex managers, real estate agents, chamber-of-commerce members and so on. You can use a variety of creative means to make yours their facility of choice.
- Direct Mail—A well-targeted direct-mail campaign can be very effective in the storage industry. Unfortunately, most owners use it incorrectly, sending a generic mailer to everyone in the community. This is unproductive and wasteful. Instead, focus on a particular market niche and tailor the mailing accordingly, i.e., local businesses that might need storage for inventory.
- Public Relations—As often as possible, get news about your facility into the local media. It's always best if it ties into current events. For example, if your community suffers from a natural disaster, offer free storage to people in need, and then contact the local newspapers, radio stations, etc. The media loves this kind of story, and it'll get good coverage for your business.
Measurement Before Method
I’m not suggesting you drop your Yellow Pages ad, but if you use these other methods effectively, you may be able to reduce your advertising costs. The key is to know the source of your business and measure it effectively. Before embarking on any marketing campaign, know the answers to the following questions:
How many phone calls do you get each month?The total number of calls you receive gives you an idea about the effectiveness of your marketing. it's a very rough barometer, but it's helpful for tracking a general trend. You can track this number by hand, use an automated device or hire a service to do it for you.
How many callers did you turn into visitors?The first step in getting someone to rent a unit is to convince him to visit your facility. You need to keep an accurate count of how many callers later walked in your door.
How many visitors became renters?Most operators claim to have a high conversion rate. In most cases, if a prospect visits your site, you will make the sale. If he doesn't rent from you, make sure you understand why and correct the problem, if there is one.
Where do you get your leads?Without this information, it's very difficult to make intelligent decisions about your advertising and marketing. Identify the source of every lead and keep a record of it.
How much do you pay for each lead?There is a cost associated with every marketing method you use. To evaluate a program’s value, divide the total cost by the number of leads it produces. Then you can compare the cost of leads in each category to determine their overall effectiveness.
Where do you get your actual tenants?This is different from knowing the source of your leads—leads are only potential customers. Once someone signs a rental agreement, record the source of that tenant in your data. This information will be extremely valuable in future marketing decisions.
How much is your average renter worth?Take your average length of stay and multiply it by your average rental rate. For example, if the average customer stays for eight months and pays $80 per month, his value to your business is $640. Let’s assume a 50 percent deduction for expenses and overhead. Now that customer is worth $320. Compare that with your cost per lead. The less you have to spend to get that $320, the better the marketing method.
Online marketing is becoming increasingly popular. Most facilities have a website of some sort. The trick is to drive self-storage prospects to your website before they find those of your competition. There are several ways of doing this, which have been addressed in past columns. For now, you just need to know the following:
How many unique visitors hit your website each month?A “unique visitor” refers to someone who has not visited your website ever before. This number is the most critical when it comes to web data.
How many of those unique visitors rented?If you manage to drive a lot of traffic to your website but nobody rents, you're wasting valuable leads. If you actually paid to drive that traffic, you're also wasting money. There are two conclusions you can draw: People who were driven to your site were not qualified leads, or your website is somehow insufficient.
From where do you get your website visitors?You need to know how people are finding you on the web. Which search engine did they use? Did they find you through an online directory? Record this information with your other marketing data.
When it comes to the finance of marketing, it's critical to track your numbers. Know the sources of your business and how much you pay for each one. This will allow you to make intelligent decisions and create an effective program.
Fred Gleeck is a self-storage coach and consultant who helps owners and operators maximize profits. He is an expert in the field of information and seminar marketing and the author of more than 10 books. For more information, call 800.345.3325; e-mail firstname.lastname@example.org; visit www.self-storagesuccess.com. To subscribe to his e-zine, send an e-mail to email@example.com.