By Tim Schlee
Meet Normal Self Storage (NSS). The facility is smart with its marketing methods, tracking all lead sources with unique phone numbers, monitoring Web traffic, keeping track of costs, and generally doing a good job managing its marketing efforts. Super Self Storage (SSS), however, does even better! The company conducts tests to determine the effectiveness of its marketing materials, explores deeper calculations to more accurately identify return on investment, and knows which sources bring in the most leads for a particular kind of unit.
In this article, I’ll show you how to be more like SSS so you can take your marketing to the next level. But first, you need to be at least as good as NSS.
The most important step in advanced marketing metrics is to track everything. There are a number of ways you can track a lead source:
- Assign a tracking number
- Make a separate URL
- Hand out unique coupons at a specific event
- Use a code (e.g., a QR code or a string of numbers)
Whatever approach you choose, make sure each lead has a unique identifier that will allow you to track the customers coming from a specific source. Both NSS and SSS do this, but SSS uses its tracking as the starting point to greater insight.
Always Be Testing
SSS is always testing its marketing materials, especially with online A/B tests. A/B tests are experiments that directly compare two alternatives to determine which is more effective, usually measured in terms of click-through rate (CTR) or conversion rate (i.e., the percentage of users who rent a unit, contact you or take some other action). Let’s say you want to test the copy of a prominent heading on your home page. Do potential customers respond better to content about climate control or low pricing? Test it to find out! Here are some headlines you could try:
- Heading A: Keep Cool This Summer With Our Climate-Controlled Units!
- Heading B: We’ve Got the Lowest Prices in Town!
Experiments aren’t difficult to set up in Google Analytics and other analytics platforms. Start by creating two homepage designs, assigning each a unique URL, and then use analytics software to randomly send users to each. (You might need help from your website provider.) Look at how the conversion rates compare. If heading B performs better than your existing heading A, then change it! You’ve now increased the overall conversion rate of your website.
This kind of testing is easiest on the Web, but it’s also possible offline—just be careful to control as many variables as possible. For example, when A/B testing two billboards, consider whether you should set up two billboards in different parts of town, or use the same location and test each billboard design at different times.
Neither method controls for significant variables that could influence your results. If people in one part of town aren’t as interested in self-storage, it would skew the results. If your primary market segment is more interested in self-storage at a particular time, such as during the summer months, the increase in leads might not be from the billboard itself but because of customers’ seasonal needs. So be aware of the possible variances that could alter your findings.
Always Be Measuring
As useful as A/B testing is, an even more powerful tool can be found in manipulating the numbers you find from tracking all your lead sources. For example, NSS looks at its customer acquisition cost (CAC):
But the facility doesn’t go any further. CAC is only the first step in truly identifying where your marketing dollars are best spent. The next step is to determine average lifetime value (ALV), or the overall revenue brought in by a typical customer over his entire stay with you. It looks like this:
ALV = (Average Rate of Customer’s Rent) x (Average Length of Stay)
Here’s where you can really start to get creative by finding the ALV of specific market segments and lead sources. Let’s say the people you draw from your Yellow Pages ads are older customers who’ve acquired a lot of stuff over the years. They might not need huge units, which brings down the average rate they pay, but they also stay with you for longer. Their ALV might look something like this:
$75 x 24 months = $1,800
Your pay-per-click ads, however, bring in younger people from the Internet who only need storage during a move. They rent larger units, but for a shorter amount of time. So their ALV might look like this:
$120 x 8 months = $960
In this scenario, the Yellow Pages ad brings in customers who will generate more revenue. But we’re not done yet! We’ve got to find the overall return on investment (ROI):
Once you know how much revenue you can expect from a source, you can calculate the return you’re making on your investment. If the Yellow Pages ad costs significantly more than the pay-per-click ad, it might have a lower overall ROI despite clearly generating more revenue per customer.
With this in mind, you can focus your numbers on even more specific targets, such as market demographics. For example, college students don’t have a lot of money and usually only need storage for the summer, so they might not provide a large amount of revenue. In that case, how much should you be willing to spend on advertisements that target them? Similarly, if your 5-by-5 tenants generate less revenue than those from larger units, you might invest less in marketing to segments that, through your research, you’ve found tend to favor your smaller spaces.
Always Be Maximizing
Whatever numbers you crunch, always focus on optimizing the money you spend and the customers you attract. There’s a lot of data at your fingertips if you properly track lead sources, and you can use it to fine-tune your marketing funnel. Before long, you’ll find you’ve become a marketing master like Super Self Storage!
Tim Schlee is a Kansas City native who studied English and linguistics at Truman State University. He’s a content writer for storEDGE, which offers Web-marketing technology for the self-storage industry, including lead-generating search engines and facility management software. For more information, call 913.954.4110; visit www.storedge.com.