Common Marketing Mistakes

If you were to survey self-storage tenants across the country, you would find, that the distance to home or office was their No. 1 reason for using a particular facility. People want their possessions close to them. It's as simple as that.
If you were to analyse your database you would find that most customers live within the 1 percentage radius factor explained below. So, why do so many storage facilities advertise outside that radius? If you run radio commercials, most of the listeners wouldn't rent from you even if your space was free, because they're too far away. The same goes for most newspapers, TV stations and so on.

 

Rather focus on the 1 percent rule. If you have 400 units, your target market is the closest 40,000 households. If you have 295, your target market is the closest 29,500.

 

Depending on the density of the population surrounding your facility, it might take 1 kilometre or 10 kilometres to achieve that household count. Don't focus on distance, because people in rural areas are accustomed to driving further for everything. You're OK if you need to go out a few kilometres to get your count. I have yet to see this rule fail.

 

Analyse your marketing budget. How much is spent advertising to people outside the 1 percent radius? Reallocate those dollars to media directly delivered to your target market.

Unless you are the only self-storage facility in town, you must differentiate. You have to make it instantly clear why your prospects should choose you over the other options in town. While this is definitely not a new concept, few self-storage facilities run differentiating ads where it's necessary. Instead, they run me too ads.

 

Take a quick acid test to see if you are guilty. Open up the Yellow Pages and go to the storage section. Now, take a look at your ad and the competitors ads. If you're saying something they're saying, cross it out; it's not differentiating. How much of your ad is left after doing that? I'll bet you could cross out your name and write in your biggest competitors name in its place and more than 90 percent of the ad would still apply!

 

Try this: Next time you run an ad, focus on what makes you different. If you have got nothing, you need to innovate. Extend your access hours, adjust your pricing structure, offer services such as loading and unloading assistance, etc.

Your primary asset is your customer base. Without it, you would have no revenue, no referrals and no retail sales. Most self-storage operators spend their time trying to acquire new customers instead of serving those they are already spent so many resources trying to get.

 

What if all your customers rented for just one month longer? What if each referred one more person? What if 50 percent more of them purchased tenant insurance? Imagine selling them all the boxes, bubble wrap, padding and tape they need for their move-outs? Answer: Your profits would soar!

 

I'm not trying to tell you to ignore new-customer acquisitions. I'm simply telling you to put together a database-marketing program focusing on existing customers. You have already built trust with them. Every storage facility in this country should be marketing to their customer base at least once per month, offering a referral program and other ancillary products and services.

What is the lifetime value of your customers? If your average rent rate is $100, and the average tenant stays eight months and purchases a box and a lock at $15, then the answer is $815.

 

I've seen lifetime-value numbers range from $300 to more than $2,000. In this business, so many variables will drive value up or down, you shouldn't rely on industry averages for your facilities. Figure it out for each facility it doesn't take long.
Now, why is this relevant? Because, when you market your facility wisely, you'll know what your cost per call and acquisition is. If you are spending more money to acquire a customer than he's worth, you're in trouble.

 

But more common in this industry is owners and operators who aren't willing to spend $100 to make $815. I'm not quite sure why this is, but I'm certain if they knew how much a customer was actually worth, they'd think differently about marketing. So, figure out the value of a customer at each of your facilities and use the information to drive your marketing decisions.

 

Of all the mistakes I've seen, these are the big ones. Hopefully you'll be able to make a few course corrections and have a wildly successful business.

 

Acknowledgement to Derek Naylor Storage Marketing Solutions for information included in this article.