By Kerri Fivecoat-Campbell

ffective marketing is key to the success of any self-storage business. The ways to market to customers have changed over the years, and the ways to track marketing dollars have greatly improved.

One thing that hasn’t changed is the critical need to understand Cost Per Acquisition (CPA).

According to Parative.com, a self-described number crunching company, CPA (also called Customer Acquisition Cost or CAC), tracking these costs “allows companies to identify the most profitable marketing channels for their business.”

“Your marketing goals are tied to the goals of your property, which is tied to profit, and that’s the goal,” says Anne Mari DeCoster, president and COO of Kingdom Storage Partners and Self Storage Investing.

Industry standards for the marketing budget of a self-storage facility can be anywhere from 2 percent of gross revenue to 30 percent. “It depends a lot on whether the facility is established or in lease-up,” says DeCoster. “You’re going to spend a lot more in lease-up.” She adds that when the facility reaches 90 to 95 percent leased, owners and managers typically back off their marketing spends or may even suspend paid marketing for a period.

Reaching lease-up goals depends a lot on spending marketing dollars effectively by tracking CPA. “Calculating Cost Per Acquisition is the most important measure,” says Beau Agnello, senior vice president at Pogoda Companies in Farmington Hills, Mich. “Operators want to solve the equation to the lowest cost of marketing dollars spent per acquisition.”

M. Anne Ballard, president of marketing, training, and developmental services for Universal Storage Group in Atlanta, Ga., says the basic equation is as follows:

All advertising and marketing costs for a set period divided by all the leases that come in for that period. “This gives you the true cost per lease,” she explains.

Achieving lowest CPA by maximizing your marketing budget still varies by location. DeCoster says their company finds drive-bys are still the leading source of new customer leads. “We are still a location-based business,” says DeCoster. “If you have a quality product by paying attention to curb appeal, paint, and signs, this type of old-school marketing still works.”

Carol Mixon, president of SkilCheck Services Inc., in Tucson, Ariz., says when thinking of drive-by marketing, don’t be afraid to think out of the box. “We had one property that had an owner who had a mural painted on the building,” she says. “We got a ton of traffic from that mural and the facility was known as ‘the one with the clouds.’ That marketing trick helped more than we could have imagined.”

She advises to get creative with signs, flags, and other things within city ordinances to draw attention to your property.

Ballard is a big proponent of organic marketing efforts, but says customers are increasingly finding their properties online. She says 44 percent of their customers came from online marketing last year, although that has dropped slightly to 42 percent this year. USG’s data shows only 33 percent of their new tenants found them by drive-bys.

For non-digital conversions, Ballard says it’s important to have a valid way to track the methods by which customers found your facility. “It used to be managers could just ask customers how they found us when they moved in, but with contactless rentals, we have to sometimes follow up with the customers by calling them afterward.”

USG’s managers make courtesy calls asking customers if everything is OK; they also ask where they heard about the property.

While some self-storage properties still get most rentals from drive-bys, digital marketing is becoming more of a key to a successful property and industry experts say you likely will not have a profitable store without spending some money on digital marketing, including Pay Per Click (PPC) ads.

Mixon says it’s impossible to have a successful store today without starting with a good website. “The webize has become the great equalizer for smaller operators,” she says. “Even a store that is older can be successful if they have a good website.”

Mixon adds websites shouldn’t just look good but be functional in speed as well as offer services, including online and touchless rentals and the ability to pay rent online.

Mixon also says one thing owners/operators sometimes miss in setting up their own website is ensuring it has the right
keywords. “Most people call them ‘self-storage units,’ but I’ve seen some people in parts of the country call them ‘storage bays.’ Also, if there is something that distinguishes your property, such as the facility with the mural, add those keywords.” She says an example of that one would be “storage with clouds on wall.”

PPC marketing, which is developing an online ad and paying per number of clicks on the ad, is a different marketing spend that many operators still haven’t grasped. “I know a lot of people say PPC ads are complex,” Mixon says, “but I personally believe the Yellow Pages were a lot harder. You were where you were based on the name of your facility or company and it was hard to track. There are so many ways now we can track conversions digitally.”

Agnello agrees. There are many ways to track those digital conversions from PPC ads, including SpareFoot, which he says is great for single operators and smaller companies. “If you have in-house marketing, you can use Business Intelligence, also known as B.I. It’s a very cool looking report that measures the rentals back to the PPC spend.”

Agnello explains that they set budgets based on the density of the property and density of the competition and allocate the budget based on impression share metrics. “You have to make sure to add it to the right customer research using geography and ZIP codes,” he says. “You optimize your ads to spend in those areas.” Offering specials is another way to gain customers, but Ballard cautions this can be tricky. To maximize your CPA, she says you must calculate your customer’s average length of stay and determine your tenant’s lifetime value. This is done by taking the cost of your marketing and multiplying it by the average length of stay to determine the ROI or lifetime value of the customer.

“The problem offering specials with savings on the front end is determining which customers will stay the average length of stay,” says Ballard. “If you do first month free, you have a high cost to attract the customer. If you do half off over three months, they’re more likely to stay for at least the savings up to nine months.”

Of course, if you have a certain size fully occupied, you don’t include that size as part of the special.

Our experts say the CPA for each property is as unique as the property itself. “I’ve had some properties where the CPA was $5 and some that were $50,” says Mixon.

Universal’s CPA jumped to $81 in 2022. “It jumped quite a bit because we increased our PPC costs,” says Ballard.
Pogoda’s costs are currently at $100 when tracking PPC ads, but the lifetime value of their customers is at $3,000. “We’re extremely pleased with our ROI based on those numbers,” says Agnello.

Ballard says the most important thing is to make sure you have ways to track all phases of your marketing, from organic, old-school drive-bys to phone conversions, store visits, and digital efforts.

“Measuring and tracking is the key to getting new customers and also tells you where to spend your marketing dollars in the immediate future,” she adds.