This article also appeared in the June issue of the SSAA’s “Insider” Magazine…
If you spend an average of $200 acquiring a storer through various marketing channels, but they only rent a locker for a fortnight – was it really worth it? Understanding your Storer Lifetime Value (SLTV) is key to getting a grasp of the true cost of marketing for the channels in which you play.
SLTV is just an acronym I invented last year, but it’s a paraphrase of a widely used acronym in marketing circles; CLTV, or Customer Lifetime Value. It’s a prediction of the net profit attributed to the entire future relationship with a customer.
Discovering the value of this number in your storage operation goes a long way towards helping you understand if the scenario in my opening paragraph is indeed true. After all, if you don’t know how much the average storer is worth over their lifetime with your business, how can you truly justify future marketing spend?
Never Let a Lead Cool Down
In nearly all cases, regardless of where it came from, a lead costs money. Be it a Facebook lead, someone who clicked on your Google Ad, or someone who got your letterbox drop – money was spent, so action leads quickly before they cool down & your competitor responds to them first.
Throwing more money at marketing does work, but only up until a point – and usually, it’s when the spend exceeds the SLTV. As a facility manager or owner, it’s important to look at your marketing and advertising costs regularly.
Not only to see which channels are performing the best so you can redirect future spend, but also so that you can make sure your business is actually growing at the rate you need (or want) it to, to keep investors / owners / the bank happy.
Understanding Your Acquisition Breakdown
Something that every facility manager and owner should be able to do is calculate monthly marketing spend, as well as the average length of stay for your storers (there’s even a report in Storman’s range of self storage management software with this exact name).
Drilling down further, it’s also a good idea to understand where people drop out of the marketing funnel, as it will let you see the cost breakdown of every impression > click > enquiry > storer, and highlight areas to focus on for improving your conversion rates.
For example, let’s say our monthly marketing spend on online channels (social media advertising, Google Ads, etc) is $1,000/month. When collecting the data and running the numbers, you may find that:
- Your online ads get 1,000 monthly impressions (thus, it costs the business $1/impression)
- …of these, only 100 click the link (thus, it costs the business $10/click)
- …of these, only 20 make an enquiry (thus, it’s costing the business $50 per lead)
- …of those, 2 may go ahead and store with you (thus, it’s costing the business $500 per acquisition)
By incorporating the data from your Storman Average Length of Stay report (which, by the way, you can also split out by unit types) you might find that the average storer only stays 3 months …in a $100 storage unit. In other words, you’re losing money.
This is why SLTV is so important as a measurement of marketing success, and it should be one of many arrows in your marketing bow.
Find out more: Explore my self storage marketing services on the Big Budda Boom website. Also, in my workshop at the 2019 SSAA Convention in Cairns, I’ll be covering this and many other storage marketing topics, including SEO, referral programs and video for self storage. I hope to see you there!