Concrete examples to help you formulate a self-storage marketing budget

To establish a marketing budget for your self-storage operation, you need to have an action plan for your marketing efforts. Otherwise, you’ll be wasting valuable resources on strategies that bring little or no results.

The overriding goal of marketing should be to make sure potential customers know about your brand. The better your brand visibility, the more prospects will think of you when the need for storage arises. This can be especially true if you have created and promoted alliances with local organizations and businesses. You want to become a trusted community resource, emphasizing your position with frequent testimonials and networking.

Getting the whole neighborhood talking about your store means leveraging referrals, engaging social media, participating in community organizations, visiting local businesses, hosting on-site events, and posting reviews online. Your outreach should include email campaigns, direct mail, and many other methods to increase your contact database. All of these efforts strain your resources in different ways and require thoughtful planning and measurement.

To understand how all the elements of a marketing budget work together, let’s do a bit of reverse engineering, using a reference example from my property management company.

Define aims

My company uses an internal Personal Marketing Goals (PMG) form for each installation in its management portfolio. It’s a one-page spreadsheet where we list the goals for each marketing activity and then measure performance against them. The PMGs are completed at the end of the year, coinciding with the overall budget planning.

In 2017, our teams sent an average of 35,234 marketing messages per store through outbound calls, emails, weekly visits to local businesses, onsite events, social media posts, club meetings, exhibitions and other off-site networks. Our facility managers have made over 23,000 visits to local businesses. Nearly 41,000 visitors attended events at our properties; that’s more than 1,000 visitors per store for the year!

All of these touchpoints help a self-storage operation gain visibility and build reputation, which should translate into unit rentals. A good way to determine their effectiveness is to calculate your average cost per lease (CPL) by dividing all advertising costs by the total number of new leases. In 2017, our CPL was $65.74.

Create guidelines

To come up with a set of budget guidelines, let’s look at what my business spent on marketing versus other expenses. The following chart shows a decade of spending expressed in dollars per square foot. Marketing costs are represented in the “Advertising” line. This includes everything we do, from promotional items to candy giveaways.

In 2017, our marketing spend was 25 cents per square foot. Our facilities average 60,000 net leasable square feet, so if your property is smaller, that number will be larger. Conversely, if you operate a much larger facility, your cost per square foot will likely be lower.

We also measure expenses as a percentage of income to help spot trends. The following chart illustrates how technology has helped us reduce marketing and advertising costs and get a better return on investment. In 2007, our marketing expenses represented nearly 4% of our actual revenues; 10 years later, they have fallen to 2.2%. (Keep in mind that a rental property will require entirely different outlays, but once it stabilizes, the percentages should drop the same way as in this example.)

Marketing costs

For budgeting purposes, we divide marketing spend into nine categories:

• Advertising: Expenses related to the production of leaflets as well as local printing/promotions managers may want to make
• Advertising printing: Sponsorship cards, business cards, advertising cards and roll-up banners
• Donations: Contributions to charities and fundraisers
• Advertising by e-mail: Expenses related to our email platform
• Events: Costs of attending or hosting events, including ribbon cuttings, garage sales, chamber shows, etc.
• Online marketing: Costs associated with pay-per-click (PPC) campaigns, online aggregators, search engine optimization, and search engine marketing
• Memberships and dues: Membership fees for professional and community organizations
• Promotion: Costs associated with promotional items we distribute during visits to local businesses as well as on-site event giveaways, catering and refreshments
• Sponsorship fees: Money paid to those who recommend new moves

In the following example, we’ve allocated $1,310 per month for all of these items. Because we focus on outreach, our three biggest costs are referral fees, promotion, and internet marketing. These account for nearly 90% of our monthly marketing output, with Internet marketing alone consuming 61% of the budget.

Keep in mind that these numbers will differ between a fresh install and an average, stabilized location. In the following example, you can see a progression during the lease in which marketing is expected to require a lower revenue percentage despite an anticipated annual increase in associated expenses from year one through year five.

Measure and study

List all marketing and advertising expenses in your management software. For example, if you are a member of your local Chamber of Commerce, make sure it is listed. Similarly, track performance across all channels to gauge effectiveness.

This includes surveying new customers when moving in. It is essential to confirm how a new tenant discovered you. Make sure your managers use a marketing questionnaire when moving in and record the responses. The results will help you understand what works and how to adjust and allocate marketing dollars for future budgets.

The following chart shows how our teams measured customer traffic sources last year. At just 0.01%, it’s obvious that the Yellow Pages are no longer a valid source of acquisition for us. On the other hand, with nearly 34% of new tenants citing the Internet as their point of contact, we need to have an adequate budget for our corporate website, online aggregators, PPC campaigns, network ads social and email marketing.

The engagement of your customers and community members is essential to being prioritized. By planning your marketing, then working and measuring that plan, you’ll be able to adjust your annual budget with confidence, knowing that all of your touchpoints are contributing to your bottom line.

Mr. Anne Ballard is president of training, marketing and development services for Universal Storage Group and founder of Universal Management Co. She served as president of the Georgia Self Storage Association and served on the board of directors of the National Self Storage Association. She has also been involved in the planning, design and operation of numerous storage facilities. For more information, call 770.801.1888; visit www.universalstoragegroup.com.