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What Every Seller Dreams About...Part IIExamining segments empowers owners to understand user needs

January 1, 1999

11 Min Read
What Every Seller Dreams About...Part IIExamining segments empowers owners to understand user needs

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What Every Seller Dreams About...Part II

Examining segments empowers owners to understand user needs

By Harley Rolfe

Moving is grubby work. It's dirty and physically demanding. Friends are imposed upon,vehicles rented or borrowed, and stuff gets misplaced. The hope of the person moving isthat some of these things won't happen or be necessary. Use of self-storage means a doublemove, and people sure would prefer to avoid that. That's why we often get the tenant atthe last minute. They were hoping to avoid the need for self-storage all together. No oneis saving their pennies to rent a self-storage unit.

No news here, but lots of opportunity. Take the woe out of that move. Get to the"place" where the prospect is. That doubtless involves things besides storage:transportation, packing materials, planning tools (How much space do I need? How do I keeptrack of where I put everything?), man power, etc. Spare the tenant the need to worryabout how to get the necessary things arranged. Your role is to facilitate by knowingexactly how, who and where the prospect can get the help they need. You may want to offersome things yourself. The important thing is to distinguish yourself as the one who willease the burden and distress of moving.

Incorporate the unit into a package that solves the tenant's whole problem, then nameit. You are no longer a 10-by-20 unit, rather you have created a product: "EZ Movefrom A to Z." You have made it more difficult for the prospect to shop, but made itmuch easier for him to get what he wants. Not bad.

Other pieces of that whole picture may well try to influence the prospect in anotherstorage direction. If we aren't involved in anything other than the unit, we don't haveany claim on all the other considerations the prospect will undergo in order to achievehis end. The rental trucking company may well have a storage deal for the prospect. Thereal-estate agent may also. We'll never know because we're not involved. My suggestionhere is simply that there is a risk in not tying up the prospect by being certain we'reunavoidable when any prospect pursues any objective that might have storage as acomponent.

We should be there the moment the prospect begins to consider a need that could involvestorage. We already know that most people think of storage last when considering a move.What can we do to have them think of us first? Seem like a lot more trouble? It is. But asthe great department-store founder, Marshall Field, said, "Give the lady what shewants!"

The Packaging Bonus

You have added an additional feature to the offering--convenience. This results insynergy and carries a premium. The sum is greater than its parts, and the added valuetranslates into a premium for you. You have created additional utility and can take thatreward. Note the franchises and food products aimed at making life simpler. It would bemuch cheaper to buy the ingredients (commodities) and cook at home. But, Sara Lee makes iteasy for the user to get his needs accomplished--at a whopping margin. The moving prospectmust deal with the whole picture to satisfy his needs. Help him.

It is less likely that the prospect will "call around" when attracted to youbecause of a good package. He knows that you have thought about his needs and have takenuseful steps to meet them. He knows that you are only one to offer the package. Further,it causes you to engage with him in such a way as to delve more deeply into his situation.To confirm that you truly do have an offering more suited to his need, you must askquestions about his intended use. Now you have shifted the focus of the discussion fromwhat you're doing to what he is doing. That's where you want it. Convenience is a verystrong appeal. It is a separate and additional source of benefit to the prospect. Itearns its own premium. Not only have you improved the price of your offering, but youhave also vastly improved your competitive stance. Pretty good, wouldn't you say?

As you move into this kind of approach, you may discover that you need several optionsfor the tenant to consider. So much the better. You want the tenant preoccupied withseveral options that you control. Do you care which he chooses? Nope.

The problem with using packaging is that you must know enough about the prospect todesign them. Your exclusive features must be relevant to be effective. That means that youneed to know a considerable amount about how each target will gain utility fromself-storage and figure ways to enhance their experience.

There is another response to competition that is a form of media, but it is soeffective that it deserves individual comment. This approach is branding. Itderives its effectiveness by simply isolating a particular offering in the prospect'smind. In its purest form, it accords no particular special features except for thesupplications by the seller to "buy mine" and use the media to make it familiar.Strangely, that effort pulls you name from the rest in the hat and makes it familiar. Inour discussion of packaging, the new package entity needs its own brand in addition to thename of the facility--much like the relationship between General Motors and Buick. Thingsthat were known (Sure, I've heard of that!) are preferred and improve the odds that theywill be chosen over rival choices. Branding is the first step.

Consider the prospective tenant's view. He's never stored before. He's about to committhousands of dollars of cherished stuff to a facility. He will respond to stimuli thatgives him assurance that what he's about to do is OK. From our view, we want business, butwe want no part of even implying that we are assuring him of the safety and security ofhis possessions. Making our facility familiar is a tiny concession of such assurance--andtechnically harmless.

About Hard-Nosed Marketing

I've delayed until now a more specific discussion of what hard-nosed marketing is. Youneeded a better look at what professional marketers do. People just curious aboutmarketing should get off here--"come-and-get-it" marketing may be just right foryou. For the rest of you, an analogy: If I invited you to go fishing, we have a couple ofchoices. We can show up at the lake, put a worm on the hook, throw it overboard, open abeer and hope. Or, we can get serious about our outing.

We both know that success is governed by how much we know about our quarry. We wouldneed to know about the habits, haunts and habitat conditions that makes our targetaudience's behavior predictable. If fishing, we would visit the local tackle shops to getsuggestions on lures, locations, etc. They would tell us that the pike are still in theshallows and are taking surface plugs.

We accept the idea that it is only good sense to do a little research to enhance ourchances for success. We admire a sportsman who knows his stuff on the lairs, drop-offs andlikely habits of fish and game. We might even try to get him to take us along one day. Heis the one with a full creel and a bulging freezer. When it comes to hunting or fishing,he's hard-nosed--knowledgeable, confident, unrelenting. He expects to be successful.

But when I suggest that we isolate the various segments of users that we all have inour facilities and study their habits so we can go "get some more," at times Iam met with glazed eyes. I think it's because with wildlife, we easily recognize thatdifferent types and species look different from each other, and it follows that they willhave different habits. But people all look the same. It's difficult to accept that theiruses could be so different and that the differences are so significant.

More About Those Segments

The first part of getting to hard-nosed marketing is learning more about how customersgain benefit or advantage through the use of my product. Others may be concerned with themarket, but marketers can only work with segments. Why? Gross measures obliterate the useor behavior by users, which obscures the chance to understand what's going on. Thebusiness volume from some groups is increasing, some decreasing--the total is steady.

So, it is not as simple as saying that is total revenue is going up, it's good and badif it's going down. Having noted one or the other, what does that prompt you to do? Youwill find that in any one facility, different segments are behaving differently. Some ofit may be seasonal, some inspired by the competition, some by a general downturn inreal-estate exchanges or construction activity--but you are helpless to deal with any ofthese unless you know what changes in behavior there are among segments. We need todetermine--and then track--what is going on by segment. (I know we treated segments lasttime, but we need it clearly in mind as we explore how we put it to use.)

We all know that there are two general classes of segments: personal and commercial.Those are too general to do a marketer much good. There is more to know. For personal use,a disturbance is often what creates a need for storage--job promotions or loss, childrenarriving or leaving, changing residences, divorce, growing older--these are the lifedisturbances that occasion decisions to use storage. Note that most are transitory. Theybegin and end. Sooner or later, the need for storage evaporates and we must find new onesto replace them. Those are conditions of those segments.

For commercial use, the reasons are often more enduring. The need is inherent in whatthe organization does to create their own income. Certain kinds of industries must havestorage. We know about the records-storage needs of professional people, banks, etc.Distribution organizations are another large segment. In both of these cases, every singleone needs storage. The relevance to us is how they solve their storage need, not whetheror not they have one. Thus, most needs are permanent, and the reason the commercial tenantwill move out is for some condition other than need.

A qualifier for us relates to size. We're constrained because our units usually max outat 400 to 600 square feet, but one study showed a distribution of commercial for all sizesthat a facility had. So, we have plenty to offer commercial prospects. One of the furtherstimulants is growth by an entity within the commercial segments. Growing businesses areusually strapped for capital. Self-storage credit terms are unusually generous. The trickis to determine which businesses are growing.

Beyond the desire to identify those segments, there are some other mundaneconsiderations. There is a matter of "segment ID quality" in identifyingsegments. We want to identify segments to help us market them. So the IDs should offer thethings that we need to help us do that.

  • A segment should be measurable in total terms; that is, how many instances are occurring in my service area that will produce this use? You need to know whether the segment potential is increasing or decreasing in order to figure out how important it is.

  • It is very handy when there is a correlation base available, both for comparison and for forecasting. The availability of correlation information tells how we're doing compared to some other related or connected data. For instance, housing starts or real-estate-sales activity are residential-move indicators. Further, such data is forecasted by local organizations (power companies, public highway and sewer planning organizations, banks, etc.) This can reassure us that our target segments are worth pursuing--or that they are not.

  • Availability of media is a very practical issue for self-storage. Are there media choices that connect directly to the segments? After we have identified our segments, we want a practical, cost-effective way to reach them.

  • How you get the word out to everyone is a matter of media choice. But, at this point, you know you have completed the most important part: You have determined what the various segments are and what message you have for each.

Putting Our Act Together

Recall in an earlier column our reference to football. We said that we should set theterms of the game (field size, number of players, scoring system, etc.). We also said thatthis could not be the specific game plan for a particular opponent, since that is veryspecific to the game involved. Same goes here. We need a market plan that melds everythingwe learn into a plan of attack.

Keep one more thing about football in mind: Every offensive play is designed to score atouchdown. Every defensive formation is designed to stop the opposition cold. It neverquite works that way. The respective offenses and defenses adjust. It is a dynamic system.Your competition and the changes in the market will create the same for your plans. Youjust keep at it.

The remainder of the hard-nosed marketing series fills in the blanks with more on howto apply the segment approach. There is nitty-gritty work to be done plus thought andsegment-planning in preparing to go to market. We treat the prerequisites for hitting the"market-running."

Missed some previous issues? Visit the Web at www.hardnosed.com.

Harley Rolfe is a semi-retired marketing specialist whose career includedexecutive-level marketing positions with General Electric and AT&T. He also ownedlodging and office facilities for more than 20 years. Mr. Rolfe holds a bachelor's degreein economics from Wabash College and a master's degree in business administration from theUniversity of Indiana. He can be reached at his home in Nampa, Idaho, at (208) 463-9039.

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