Over the past month the SSAA Board and administration team have discussed the development of a strategy to provide clarity and purpose around non-price based marketing activities that assist self storage operators to promote their businesses to new and existing customers. Specifically, the strategy acknowledges that many SSAA members look to their Association to aid them to grow awareness and use of self storage by individuals and business customers. The framework for the intended strategy was developed by Dr Marcus Powe, Entrepreneur in Residence at Melbourne’s RMIT University.
The need for such a strategy is underpinned by the SSAA’s own research, in the form of the 2013 SSAA Demand Study, that reflects that awareness and use of self storage facilities was low for the general population of 3500 people surveyed, with 70.3% of respondents exhibiting limited knowledge of their product/service offer and 32% either currently using (5%) or having used in the past (27%).
In considering such strategy development, self storage industry critical success factors, defined as things that operators need to meet (or exceed) to effectively operate in the industry were discussed (e.g. building code approvals). Importantly, the SSAA Board and administration team also expanded their discussions to not just consider the organisational level of a self storage business (people, products and internal processes), but also the wider environment in which self storage businesses operate.
Two working parties were formed. One to consider the current state of play, in terms of the competitive behaviours self storage operators currently exhibit in running their businesses and what the very ‘essence’ of the self storage product and service offer to customers is. The second to consider aforesaid environmental challenges that operators must contend with or use to their advantage.
Current ‘State of Play’
In determining competitors for a given self storage facility discussions centred around facilities that were within an 8-10 minute drive from a given business. It was agreed that price based competition is localised and that prices charged outside of a facility’s catchment area are largely irrelevant. Facility density in the location and socio-economic factors of the area were deemed to also play a role in setting unit pricing. Other key factors driving competitive behaviour by operators include:
1) Excellent customer service (often the cheapest and easiest way to compete)
2) Process Innovation – how easy is it for a customer to engage with a self storage business?
3) Tweaks of the self storage product/service offer. Often the most complex component, but where many operators chose to start!
Essence of the Self Storage Product/Service Offer
The intrinsic nature or indispensible quality (the essence) of the self storage product/service offer was deemed to be trust which leads to consumer peace of mind.
The SSAA Board agreed that consumers place a high level of trust in the facility operator and experience peace of mind, in the knowledge that they will keep their valuable possessions safe and secure.
Discussions raised a number of alternatives to the use of a self storage unit by a customer, including:
• Granny’s, a mate’s or Mum and Dad’s garage
• Selling the goods
• Disposal of unwanted goods
• Spare room – cupboards or attics
• Use of a removalist service that enables storage and collection of storage crates
Compelling reasons for a customer to use a self storage facility to store their valued possessions over some of the alternatives listed above included:
1) Location convenience – extension of the storer’s own home
2) Security features – access control, alarms and CCTVs
3) Removes time pressure. Provides time for individuals and families to consider their options with possessions during emotionally challenging times
4) Own space – clean, dry, secure, pest free
5) Resultant reduction in spoilage likely e.g. unlikely to get knocked or broken
6) Removal of emotional burden – feeling reliant on, or unable to refuse the request of a family member to utilise their spare storage space
Stepping back from the operational level of a self storage business, the SSAA Board and administration then assessed the ‘big picture,’ or business environmental factors that all operators, regardless of industry, must consider in an attempt to build a stronger business. Such factors (e.g. laws, technology and economic factors) were considered, both in terms of opportunities and threats they pose for self storage business operators. They are described based on the following parameters – Political, Economic, Societal, Technology, Mega Trends (things society at large are doing) and Globalisation (business crossing traditional boundaries).
The table below provides a summary of issues discussed:
Where to from here?
A strategy discussion, when completed in such detail, can sometimes incite confusion for the business operator over which aspect to address first. The SSAA’s approach is to encourage self storage facility operators to address easily achievable items first. This is certainly the process that will be taken in continuing such a discussion at SSAA Board level.
1) Low hanging fruit
– Reconsider what the provision of excellent customer service looks like. Does your facility provide it? How is it measured? Is it consistent?
– Process Innovation – getting the mix right e.g. balancing making the storer sign up process easier and quicker vs. ensuring all paperwork is completed and contractual terms and consequences of breaches are fully explained.
– Improvement of Product/Service Offer – how does it compare against that of competitors? What can be improved immediately? What enhancements can be scheduled over an extended time? What would your customers change, if given the chance to have a say?
2) Business Environmental Factors
It is universally appreciated that Political forces are the most critical for a business owner to be conversant with, given various levels of Government set the ‘rules of the game’ in which all businesses operate. Put simply, if rules change, this can positively or negatively impact costs of doing business. Unexpected events like fires and floods may, for example, give cause to Governments to reconsider building compliance codes and planning permission consents. Accordingly, as stated above, it is critical for the Association to develop a closer bond with policy and law makers in order that such ‘rules of the game’ can be developed in unison vs. being in a situation where members have to respond to perhaps unintended consequences of changes.
As positive consumer sentiment (perhaps encouraged by increasing political stability) and discretionary expenditure grow, such economic indicators will provide opportunities for self storage operators to support the aspirational lifestyles of their customers, as (for example) they look to store recreational equipment.
Prevailing societal trends could be addressed to demonstrate the benefits of new customers using self storage. Indeed self storage could be the perfect solution to address the conflicting aims of Mum and Dad ‘empty nesters’ looking to downsize to a smaller home and their children instead looking to store their possessions with them as they travel overseas.
Paperless technology could be used to significantly reduce time taken to complete necessary documentation for new storer induction (process improvement), yet being mindful of the need to not discount the importance of the security of the storer’s personal information.
What is clear is that each of the six factors listed provides at least six opportunities for the savvy self storage operator to exploit and grow their business. Some have been detailed in the table and narrative above. Others will be explored in greater detail in subsequent SSAA Board Meetings. Do you want to join this important discussion and have your say? The SSAA welcomes your contribution. To express your interest please e-mail myself at firstname.lastname@example.org or call +61 3 9466 9699.
Dougal Hollis SSAA CEO