Self Storage- Advertising

[Henry Clark]

Just a note on one small component of our Advertising efforts.

We do Self Storage.  One of our advertising outreach approaches is Sparefoot, who is a Self storage Consolidator.  When a person does a search for Self Storage in an Area, there are about 18 "channels" by which Sparefoot captures their search and then will direct it to one of the storage locations in a zip code, city or geographic area.  

Depending on a weighted factor Sparefoot will show you as a recommended location for an area, you might even be 15 miles away, but if their algorithm says you're the best then you will show up at the top or closer.  For our area we are generally number 1 for our city and even the larger city 1mm people area next to us.  We have used them for about 9 years.  As one of our locations gets close to 100%, we turn off that account, since our normal "funnel" of customers will feed our needs from then on.  

When we started it Cost us 1.5 months of rent for a "Reservation" that turned into a rental.  Their system is on the honor system. At the end of the month you have to say which reservations turned into actual rentals. It would be very easy for a location to take rentals and not report the rental so you don't pay the fee. But to be ranked at the top of their search, you have to show you converted a larger % to actual rentals. That is a part of the Algorithm. We have learned their Algorithm. We are small Mom/Pop versus industry REIT giants, but still compete at the top.

About a year ago they started charging you a minimum of 50% of the reservations they sent you.  To exaggerate, even if none turned into rentals, you would still get charged 50%.  You could tell the pressure at the call center was on, because you would get reservations, talk with them and they would decide not to rent from us.  After a while, I asked why?  Said they were just looking but the call center booked a reservation.  I have even had 2 and 3 reservations from the same customer for different sizes of units or the same on different days.  You call the center and they normally will take them off as bogus reservations.

Last year they moved our 1.5 months fee up to 1.75 months.  Then last month they moved it up to 2.0 months.  For each rental they charge us 2 months rental for that reservation.  Doesn't matter if for 1 month, a year or 10 years.  Plus, you pay 50% of the "Reservations" if your rental conversion doesn't go over 50%.

Last month I looked at our Rentals and saw how many come from Sparefoot and turned them off for our largest location.  We are about 82% full, use google ads, have a large bill board, plus our Vortex of community renters has picked up and we add renters organically.

This is really the story of a PE firm buying into an industry.  Pushing for revenue/income scaling on a shrinking market base.  But unfortunately, the industry is consolidating.  The Large REITS can build their own advertising systems, plus google ads, etc.  

If you're in Self storage, what other avenues are you using for marketing from a Consolidator standpoint?  We have website, SEO, Billboard, google Ads, Bus seats, covered.

If you're not in Self Storage, what RE industry trends are you seeing in your consolidator or Advertising methods? See if I can take some queues from AIRBNB, ST/MT/LT rental markets.

As we get close to 90% at all locations, we turn off Advertising, since our local Vortex feeds enough renters to us.

Start small and Make Your Big Mistakes Early.

[Don Konipol]

Quote from @Henry Clark:

Just a note on one small component of our Advertising efforts.

We do Self Storage.  One of our advertising outreach approaches is Sparefoot, who is a Self storage Consolidator.  When a person does a search for Self Storage in an Area, there are about 18 "channels" by which Sparefoot captures their search and then will direct it to one of the storage locations in a zip code, city or geographic area.  

Depending on a weighted factor Sparefoot will show you as a recommended location for an area, you might even be 15 miles away, but if their algorithm says you're the best then you will show up at the top or closer.  For our area we are generally number 1 for our city and even the larger city 1mm people area next to us.  We have used them for about 9 years.  As one of our locations gets close to 100%, we turn off that account, since our normal "funnel" of customers will feed our needs from then on.  

When we started it Cost us 1.5 months of rent for a "Reservation" that turned into a rental.  Their system is on the honor system. At the end of the month you have to say which reservations turned into actual rentals. It would be very easy for a location to take rentals and not report the rental so you don't pay the fee. But to be ranked at the top of their search, you have to show you converted a larger % to actual rentals. That is a part of the Algorithm. We have learned their Algorithm. We are small Mom/Pop versus industry REIT giants, but still compete at the top.

About a year ago they started charging you a minimum of 50% of the reservations they sent you.  To exaggerate, even if none turned into rentals, you would still get charged 50%.  You could tell the pressure at the call center was on, because you would get reservations, talk with them and they would decide not to rent from us.  After a while, I asked why?  Said they were just looking but the call center booked a reservation.  I have even had 2 and 3 reservations from the same customer for different sizes of units or the same on different days.  You call the center and they normally will take them off as bogus reservations.

Last year they moved our 1.5 months fee up to 1.75 months.  Then last month they moved it up to 2.0 months.  For each rental they charge us 2 months rental for that reservation.  Doesn't matter if for 1 month, a year or 10 years.  Plus, you pay 50% of the "Reservations" if your rental conversion doesn't go over 50%.

Last month I looked at our Rentals and saw how many come from Sparefoot and turned them off for our largest location.  We are about 82% full, use google ads, have a large bill board, plus our Vortex of community renters has picked up and we add renters organically.

This is really the story of a PE firm buying into an industry.  Pushing for revenue/income scaling on a shrinking market base.  But unfortunately, the industry is consolidating.  The Large REITS can build their own advertising systems, plus google ads, etc.  

If you're in Self storage, what other avenues are you using for marketing from a Consolidator standpoint?  We have website, SEO, Billboard, google Ads, Bus seats, covered.

If you're not in Self Storage, what RE industry trends are you seeing in your consolidator or Advertising methods? See if I can take some queues from AIRBNB, ST/MT/LT rental markets.

As we get close to 90% at all locations, we turn off Advertising, since our local Vortex feeds enough renters to us.

Start small and Make Your Big Mistakes Early.

As usual, Henry’s post are precise, accurate, and chock full of great information.! Thank you Henry. 

one of our main advertising media was Scotsman Guide, a magazine and online directory of direct lenders for the mortgage industry.  Due to extensive reach, high use, accurate listings, and ease of use it is far and away the biggest and best method for a lender to reach mortgage brokers with needs relevant to the lenders offerings. 

We were medium size advertisers / listings  for about 8 years.  Three years ago we received  notification that Scotsman Guide has been able to streamline, and to “share” the savings with their advertisers there would be no increase in rates for the new year.  However, there would be some “changes”  to our existing contract. 
Turns out the “changes” are that our directory listing that previously covered us nationwide (50 states plus DC and PR) would now cover 5 states we select - and any additional states are available for an additional $200 / month EACH.  This “change” in actuality increases our bill from $7,200 per year to $120,000!  We decided to place our advertising $ elsewhere.