The 4 (or is it 7) P's of Marketing and Self Storage in 2021
by J.D. Blacklock, Blacklock Storage
Ringing in the New Year, the TSSA addresses the importance of marketing in an increasingly competitive industry. I am sure many of you are planning and executing your New Year’s resolutions. In addition to our personal health goals, such as trading in Christmas cookies for kale salads or putting up your quarantine slippers and finding your running shoes, it is important to plan for the health of your business. Implementing a strong marketing strategy was important in the past; it is now absolutely essential to your success.
Self-storage fundamentals have been negatively affected by the supply created by new development in recent years. The development pipeline dwindled this year and rental rates seem to be stabilizing in select markets. The rental rates, in most markets, are still low considering current construction costs. Although the industry seems to be on an upward trend, the amount of publicity storage has received may make the next wave of development even greater than ever before. Barriers to entry into self-storage are lower now with the growth of third-party management services and availability of institutional capital.
Elliot Management Corporation, a large hedge fund, recently purchased a significant portion of Public Storage’s stock. In a letter from Elliot to the Public Storage board, they mention, “By underinvesting in new stores, existing stores, store-level employees, innovation and customers, the Company has failed to capitalize on the considerable firstmover advantage, leaving its shareholders to pay the price of that opportunity cost.” This is a sign that competition will be increasing in years to come as the REITs battle for market share. Many new entrants to the self-storage arena believe that operations and marketing are lacking at existing stores, thus creating opportunities for innovative marketing plans to be implemented.
As a marketing undergraduate, I learned the importance of the “4 P’s Marketing Model”: Product, Price, Place and Promotion. If you take the P’s a step further, you could focus on People, Process and Physical environment. Customer service, safety and a clean retail environment are serious differentiators. The full marketing model cannot be explored in depth today but may serve as a starting point. This magazine issue will go into more specific marketing strategies such as social media marketing, Search Engine Optimization, etc. I encourage you to reach out to other operators, vendors and contributors to follow up on specific marketing plans.
Self storage is primarily a needs-based business. Our customers need safe, convenient, secure storage and FAST!
Price is only as good as your value offering in the market. Market rates can vary wildly between asset types and how the customer perceives your property. Do you know your market?
Location, Location, Location! Some firms have the best locations and brand awareness in the business, yet they are underperforming in relation to their peers. This applies to physical location, positioning of online presence and brand awareness in the community. A great location with little marketing doesn’t cut it anymore.
Do you promote your brand locally? Do your representatives give you a positive image and participate in the community? Do you have a strong, positive online presence?
Are your people excellent at sales? Do your people create a clean and safe environment?
Do you have a concise management and marketing process that is followed? Do your competitors seem more organized or professional than you?
Does your store feel more like an industrial yard or more like a retail environment?
COVID-19 changed buying practices in general, and specifically, the rental process. Tweaking your strategy to conform to new business norms and starting a marketing plan will take any business owner a long way. Small things, done consistently, add up to big things in the long run.
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