Numbers Don’t Whine: Using Self-Storage Stats to Evaluate Your Marketing
By Christina Qiu
Your self-storage marketing success is tethered to a multifaceted strategy of investing in effective marketing efforts that fill your units and result in positive, measurable return on investment. In a recent blog, Randy Smith insists the answer is simply mass-media advertising.
I countered his argument in this blog, where I advised self-storage operators to focus on maintaining a great website, Google Places page, ongoing search-engine optimization (SEO), search-engine marketing (SEM), online directory listings and their social-media presence. I never mentioned storage search aggregators, but thank Smith for bringing them up in his latest rebuttal, as they’re yet another useful online channel.
I checked SpareFoot’s own reservations database (based on tens of thousands of reservations running through our system) to research nationwide, storage-aggregator customer behavior, so let’s examine those trends.
Promote Transparent Business Practices
Smith rejects self-storage search aggregators because they promote transparent business practices. He asks you to mask high prices under broadcast ads featuring smooth-talking managers. But if your unit is worth more than the discounted competition, it can speak for itself on your website and aggregator listings. After all, facilities that transparently provide pricing information online tend to get more bookings.
In addition, only 20.2 percent of SpareFoot customers book the lowest-priced facility in their ZIP code. Nearly 80 percent are more concerned with location, security and good customer reviews. The average shopper spends more than six minutes on our site. If customers were only concerned about slashed prices, booking a unit would take less than two minutes. Scrimping on a hotel room or plane flight could mean a few hours of discomfort. Being stingy with storage could end in damaged or stolen belongings worth thousands of dollars.
Target Your Audience
Mass-media advertising works best for products with mass-market appeal. In his blog, Smith mentioned GoDaddy.com, whose annual marketing budget is a whopping $100 million, according to USA Today. But these astronomical costs pay off, because their ads are relevant to most viewers. Anyone at any time can visit GoDaddy.com and register a domain name. And they’ll use the website frequently enough to develop brand loyalty.
In self-storage, your ad viewers and consumer base don’t overlap nearly as well. Customers won’t drive across town for your facility after seeing a TV spot. Industry studies show 75.1 percent of customers won’t store their belongings further than a five-mile radius from their home, and 90.1 percent won’t store beyond a 10-mile radius. Most important, most of your customers only need storage at few, specific times in their lives, so don’t waste money barraging viewers with ads just to catch the small handful of those watching at the right moment.
Web marketing, on the other hand, can efficiently target those who actually need self-storage. Google Places listings and SEO efforts cost little to nothing, and allow you to hone in on consumers searching specifically for storage-related keywords in your area.
Calculate Cost Per Acquisition Accurately
The effects of mass-media ads aren’t measurable. You can’t conclude that tenants reserved units because they heard your radio jingle. They simply could have driven by your store or heard about you through a friend. Smith’s cost per acquisition (CPA) calculation overestimates the success of his ads by making this common error. He divides total mass-media budget by total number of move-ins. This overlooks the location factor. Even if a facility did zero advertising, it would receive several reservations just by having a standing store in a particular location.
Conversely, you can accurately measure each Web marketing effort through call tracking and Google Analytics. Suppose you own a facility that fills 20 units without advertising. You then create a website for $200. Attaching a tracking number to your homepage forwards calls to your main facility phone. Ten people call the tracking number to reserve a unit. You now have 30 total customers. The CPA for your website is $200 divided by the 10-tenant increase, or $20 per customer.
For some real-world numbers, we asked Kenny Pratt, president of Crescendo Properties and editor-in-chief of the Self Storage Sales Training Blog. The CPA for his website comes out to $35 per customer. This may be cheaper than your self-storage aggregator CPA, but Pratt believes the option is still worth pursuing. Think about it, even if your aggregator CPA is $75, the average lifetime value of your customer is greater than $1000.
“You’ll always have diminishing returns. Your cheapest marketing source will be drive-bys. If that’s not enough to fill up units, create a website,” Pratt said. “After that, if you’re still not filling all units, why not turn to self-storage aggregators?”
Because Smith brought search aggregators into the debate, we’re taking this opportunity to bust his myths. As you can see, the numbers don’t lie (or whine). Don’t force a choice between singular marketing strategies—TV ads or self-storage aggregators, radio spots or SEO. Experiment with a variety of marketing channels and generate your own stats.
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