The biggest issue I see today when leasing up new self-storage space is overspending for online marketing that doesn’t produce results. I see it happen far too often and have experienced it myself.
If you’re a larger operator, you can hire a full-time marketing person. If performance lags, you let them go and replace them. But for smaller owner/operators with one or two properties, the worst thing you can do is hire a vendor, assume “thank goodness that’s taken care of,” and then check out of the process.
A well-balanced lease-up marketing plan and budget has both online and offline marketing strategies, in my opinion, but the majority of the budget today goes for the online portion. Therefore, it is crucial that this is spent effectively, or your days in the self-storage business may be short-lived today, given the amount of supply in many markets.
So as a smaller owner/operator, even when hiring a vendor, no matter what you think or don’t think about your capabilities to understand and focus on online marketing, you had better learn about it so your business strategy isn’t hoping someone else knows what they are doing.
Hoping and wishing is not a good business strategy. If you are the owner and/or on the loan, no matter who you hire, it’s your responsibility to make sure marketing dollars translate into move-ins.
Approach to a Lease-up Marketing Plan and Budget
Here are general steps I use when working with a vendor or employee to design the marketing plan:
- Define Goals: Usually, in a lease-up situation, this means how many move-ins per month. This is usually a function of our pro forma, where our break-even is in relation to occupancy, and when our interest-only period runs out on our loan.
I want to get buy-in from my vendor, manager, if there is one, and/or employees executing the plan. Often, I see vendors and owners not creating this together, and without knowing it, each has a different goal. For a vendor, it could be the number of “conversions” as defined as people who click an ad and go to a website. This is not a move-in.
For Owners, it could be money per month, and it is unfair for a vendor to be responsible for this. They have no control over what you can charge or must give away as concessions to get move-ins.
I find that a number of move-ins usually works best, and everyone is focused on the same goal. Easy to measure and see how effective ad spend is working.
- Design Marketing Budget: I don’t design the budget until everyone agrees on the goal.
For me, writing this today, it is hard for me to give you an estimate of what your budget should be. It’s usually a function of how big your facility is, what market you are in, how many competitors you have, how many others are in lease up, if there are REITs present, if the trade area is stabilized, underserved, or, as in many cases, over-supplied.
We work with whoever is in charge of executing the plan to come up with a budget we can agree on that will support the people executing the plan to fulfill it. We usually don’t start spending the full amount at the start (more on this in a minute). We hold some back for scaling up.
Again, I want to get their buy-in on it.
Here are some of the spaces our budget usually covers:
- SEO: Organic as well as paid ranking in primary Google.
- Pay Per Click: Google ads based on pay-per-click and keyword optimization. This is usually based on a bid format with a monthly budget.
- Social Content: You can do this and not pay for it, as well as add media campaigns for target groups, such as car clubs for parking. You can also use this for retargeting to people who visit your website but don’t move in.
Other parts of an online marketing plan that can cost nothing, or very little:
- Reputation Management: Strategy in place to encourage and get reviews to help with organic SEO.
- Email: Email campaigns to follow up with people who didn’t move in.
- Tracking: Its critical we know which parts of the campaigns are working and not working. If you don’t track it, you can’t improve it. Work with you vendors and/or employees to set up good tracking and tracking metrics.
Testing and tweaking are the name of the game. Test copy, images, page layouts. A/B testing is your friend. When something performs, double down. Until then, spend cautiously and scale only what works.
This should be reviewed at least weekly, if not more often. Agree on adjustments to make and do a lot of A/B testing to see what works better. When you get something that appears to be producing results, then spend more, or scale, and see how that works. As much as possible, I try to spend less until we find what is producing move-ins, then spend more to achieve the goals.
This is where owner involvement really matters. Even if you’re not doing the work yourself, stay plugged into performance, metrics, and strategy decisions.
- Offline Marketing: Don’t forget to do offline work as well, like calling on other facilities and setting up referrals for customers they have that they can’t accommodate. Other businesses in the area. We also join business associations in the area, as well as host events on-site.
As much as you can, send your customers to local business in the area so you can be adding value to the trade area. I assure you, it will come back to you in the form of move-ins.
This is, in essence, our approach to setting up a marketing plan for lease-up situations and working with the people responsible for executing it. Every property, location, and customer base is different. A lot of what we end up doing and what ends up producing results varies from project to project, even in the same city.
As an owner, stay on top of it and nothing is guaranteed, but this strategy will, in my opinion, optimize your chances for success. You can’t start too early in the process to begin.
