To find success in the self-storage business, you need to rely on data. For example, as an investor, it’s important to know where to focus your acquisition and development efforts. As an operator, you need to understand who and where your customers are, and how to tailor your marketing efforts to capture more leads.
The problem is data doesn’t automatically translate into actionable insights. You sometimes need to leverage disparate pieces of information and tools to arrive at smart business decisions. That said, using data strategically will sharpen your focus and understanding during critical tasks such as site selection, feasibility analysis, due diligence and revenue management, to name a few.
To lower risk and increase your odds for success, you must learn to source, interpret, integrate and apply data, as well as become savvy about commercial analytics platforms. Let’s look at a few ways this can be helpful in the self-storage industry.
Gathering Market Info
If you’re interested in buying or building a self-storage facility, you can use data as well as analytic and mapping tools to clarify the markets you’re interested in pursuing. By using customized combinations of demographic and economic variables, and establishing thresholds, you can identify areas with high growth.
For example, when considering the feasibility of an individual site, look at relevant factors, such as consumer spending on moving/freight/storage. Examine consumer behavior and sentiment around self-storage and compare it to neighboring trade areas. Third-party providers such as Esri and Experian can provide this kind of information.
Another common task when gathering feasibility intelligence is to reverse geocode locational data for import into a mapping system. This is essentially knowing how to quickly transform addresses into coordinates or vice versa. Lacking this know-how can be a barrier to meaningful analytics.
Sometimes you’ll be exploring land-parcel data on a jurisdictional mapping system or performing a self-storage competitor or trade-area analysis. In that case, you may have to figure out how to transform nonstandard and geographic data into an intelligible, structured table or analyze the data through third-party software such as ArcGIS.
If what you’re looking for is industry-specific data on market rents, square footage and occupancy, there are numerous providers. Some even offer analytics. Each service is different, however, so you’ll need to weigh your options. There’s no single, truly comprehensive solution. Some provide better data, while others have stronger diagnostic ability. Some are easy to use, while others require you to have more technological savvy.
Merging Data to Make Meaning
When you have multiple sources of similar information, you need to integrate and make sense of it. Excel has a data function that allows you to combine multiple spreadsheets of the same schema. Software firm Alteryx has a more advanced tool that allows you to combine spreadsheets of different schemas, including from different file types.
Another time you may need to merge data is if you operate multiple self-storage sites, but they don’t all use the same management software. For example, perhaps you’ve just purchased a facility and haven’t yet had time to migrate it to your preferred program. In this case, to effectively audit your portfolio, you’ll need to build a custom solution to consolidate and normalize the disparate platforms into one data source.
Being able to derive meaning from a single or integrated dataset allows you to present information in a more logical or visually appealing way. For example, you may want it to appear in a static or interactive chart, graph or map. The goal should be to get the data standardized in a format that benefits most users. Third-party tools such as Tableau Software or even Excel’s native charting capabilities can be useful in this regard.
Wielding Knowledge as Power
To take your self-storage business to the next level, you must learn how to leverage data and related tools. While a scientist or savvy analyst can drive a ton of value from data, so can any business that invests in the proper resources and training. Understanding how to source, interpret, integrate and apply various types of information, as well as how to use analytics platforms, will improve your self-storage business efforts, regardless of your industry perspective.
The ability to use data well can elevate a small, otherwise siloed company to institutional-level performance. It can also make your business agile and adaptable enough to succeed in an ever-changing, competitive environment.
Lindsay Lewis is the director of business intelligence for Spartan Investment Group LLC (SIG). She applies more than 10 years of experience in competitive and advanced analytics to develop and implement strategies for leveraging data, technology and research to quickly identify opportunities for SIG and its investors. In 2021, SIG plans to acquire 24 self-storage facilities representing $150 million in new projects. For more information, call 866.375.4438.