By Randy A. Smith

Im glad to see opposing viewpoints on marketing self-storage, no matter whether its from someone in the industry or someone selling to our industry. A robust and healthy debate brings creativity and outside-the-box thinking to the table. Let me throw another figurative log on the fire of this modest debate comparing the effectiveness of broadcast media and the Internet in generating self-storage rentals.

A recent blog by Christina Qiu, marketing assistant for SpareFoot.com, may leave one with the impression that broadcast media is not necessarily a good choice for modern audiences and online branding techniques are cheaper. Well, again, let me disagree. Im not saying you should not be using the Internet. What I am saying is we should not be throwing the sums of money at it that our Web-marketing friends say we should be throwing at it. Let me share my concerns about our industrys rush to the World Wide Web.

Buying listings on aggregator websites or paying for reservations/rentals is not branding in the proper sense of the word. Entrepreneur.com (See, I use the Internet, too!) defines branding as the marketing practice of creating a name, symbol or design that identifies and differentiates a product from other products. Emphasis on the word differentiates. Theres no practical differentiation of facilities on aggregator websites. The only noticeable differentiation is pricenot a good thingwhich leads to the following.

Widespread use of the website-aggregator, customer-capture model will lead to a decline in industry revenue due to this price-only differentiation. In other words, since theres no noticeable differentiation on these sitesa first-generation facility can look like a third-generation facility. Tthe sole competitive basis is predicated on who will offer the biggest discount in your ZIP code. Those hurting the most will discount the most. This keeps rates soft and conditions consumers to think selection of a self-storage facility is strictly a price-based one.

As an industry, is this what we want? Ms. Qiu also said in her blog we need to reach potential tenants on their turf, on their terms. I couldnt disagree more! I want to manage the customer relationship. Smart marketing is making the customer want to meet you on your turf and your termsnot theirs! I believe in capturing rentals online, but from your own company website. Hint: Use local broadcast media to drive people directly to your website, bypassing all the competitors.

And if you want an effective tool to objectively gauge the effectivenessreach, bounce rate and page visit before and after statsof any self-storage aggregators website, visit www.alexa.com and choose the clickstream tab. Then type in your favorite storage website aggregators name. If you study the data closely, you may be surprised at what you see, or dont see. Look closely at the bounce rates and next site visited once people leave an aggregators website. You can even compare one against another. Keep these stats in mind when youre quoted traffic data by those offering these services.

Broadcast media is by far the most cost-effective way to truly brand yourself in a local market and generate rentals, especially when compared to the cost of website aggregators. Dont let people who sell against broadcast media tell you how pricey it is. Do your own research and get the facts. In fact, using local broadcast media is two to four times more cost-effective and will build brand equity, not destroy it like the practice of indiscriminate usage of aggregator websites. Let me share some statistics with you.

Even though Another Closet Self Storage operates in one of the lowest per-capita income locations in Texas, our corporate location (McAllen) is certainly not in a small, impoverished town as its been called. Another Closet has been featured on the Inside Self-Storage Top-Operator List for the past four years, and now has close to three-quarters of a million net rentable square feet. Our market area encompasses about 4,300 square miles, an area more than 1.5 times the size of the state of Delaware, and includes a population of just more than 1.2 million people.

Ive identified roughly 165 competing facilities in this area. Of the 210 DMA (designated market areas by the Nielsen Ratings agency), this TV media market is ranked 64^th, just ahead of Charleston, S.C., and Tucson, Ariz. This is the 10^th largest Hispanic market in the United States, 11^th being Sacramento, Calif. Lest you think this is a rural, sparsely populated area, McAllen, Texas, has a population density of 2,689 inhabitants per square mile, beating even Austin, Texas, which has a population density of 2,653 inhabitants per square mile. Area wide, the population density is 294 inhabitants per square mile, which compares to the state of Pennsylvania at 284, Hawaii at 211, and New Hampshire at 147.

My marketing budget is an industry average of $0.25 per year, per total net rentable square foot of space. This works out to 3.5 percent of projected gross revenue this year. With this budget (90 percent of it spent on radio and TV), Im able to produce a lease for roughly $32 marketing dollars spent, expecting well over 4,000 rentals this year. Even figuring in an average total concession of about $11 per lease over the lifetime of the average lease, which is two-plus years, Ive generated a rental for about $43. My goal next year is to be at $30.

How does that compare to the website aggregators fee? Its a little more than half the going average rate, even for the performance-based models. But wait, it gets worseor better depending on your perspective. Since all the digitized Yellow Pages-like online listings are deeply discounted to generate that click on a facility, the average concession on those sites looks strangely like a free month. When you add the average $75 fee for the referral/rental and give away a free month, that cost per lease looks more like $150 to me. Ill stick with my $43 per lease, thanks!

By using local broadcast media you can build tremendous brand-equity, which is added value brought to your companys products and services that allows you to charge more for your brand than what identical, unbranded products and services command. With a catchy jingle, your name and phone number, you can bypass the Internet search totally. And if not totally, they already know your name when they sit down at the computer and type it into Google, bypassing your competitors.

Conversely, indiscriminate use of storage referral/rental website aggregators will destroy what brand equity you do have. Although I could take an hour to explain this, let me sum it up with these few sentences: If you have the best product, best service and offer the best value, you should get full price for it. Be the market leader. By positioning yourself amongst others who are willing to give away their product, you negatively impact your perceived value.

Consider this example. Coca Cola brought down Crystal Pepsi years ago by purposely positioning Tab Clear on the shelf next to it and launching a multi-million dollar suicide campaign. Tab already had a poor public reputation as a second-tier drink and was a dying brand. By positioning this greatly inferior product as a direct competitor of the new Crystal Pepsi, they destroyed Crystal Pepsis brand equity. The Crystal Pepsi product went down in multi-million dollar flames. I hope you can see the analogy.

Just for fun, heres a story of a Web company that discovered the power of broadcast media. Prior to 2005, this domain name registrar knew it had the best pricing, product line and services its competitors could not offer, but still had only 16 percent market share. The company hired a savvy consultant to research the issue, and the basic answer was, the reason everyone isnt your customer is because they dont know you exist. What you need to think about is moving into the mainstream media. They said, lets do it, and by the way the Super Bowl is coming up. After Super Bowl XXXIX, the Patriots beat the Eagles and the only domain-name registration company anyone could recall was Go Daddy, thanks to the first Go Daddy Girl. Now, Go Daddy has more than 50 percent market share, is the biggest player in the industry and the fasting growing one, too.

My final bit of advice to you: Realize people dont know you exist. Your job is to make sure they do. I still believe the best way to do this in your local market is by using a lot of broadcast media, and a smidgen of the Internet. But dont let me or anyone else tell you how effective or ineffective broadcast media can be. Make some calls, get some proposals and referrals of local merchants whove tried it. Just dont be a lemming and follow everyone else off the cliff.

Randy A. Smith is director of operations for Another Closet Self-Storage in McAllen, Texas. The company operates seven facilities in Texas. To reach him, e-mail [email protected].