What are the key metrics every storage operator should be tracking to improve and grow? Christel Friberg Land lays them out for us in this third installment of the Growing Self Storage series, brought to you by Stora in partnership with Christel and Clover Four.
“What gets measured, gets done” is one of the age-old management sayings and it is a well-documented fact that what we focus on tends to change, grow, and improve. Here are 5 KPIs that I believe every self storage business needs to track in order to make the most out of their sales and marketing efforts.
Breaking Down Your Conversion Rates
Everyone in sales tracks their conversion rates on a general level, but the most important learnings oftentimes come from breaking those conversion rates down. If you think of your sales process as a funnel, that funnel will have multiple steps to it. For example, a customer will visit your website, select the storage they require, enter their reservation and payment details, verify their identity, and sign a contract.
No matter what your sales process looks like, most of your customers will go through multiple steps before they buy from you. By tracking the conversion rate from one step to the next, you can see clearly where the largest proportion of potential customers are dropping off. Knowing where that point is will allow you to focus on improving the least effective part of your sales process and this is often the quickest way to improve your conversion rates overall.
Acquisition Cost Per Channel
How much does it cost to acquire a new customer in your business? When you know where your tenants heard about you and when you split your marketing budget up by channel, you have everything you need to answer that question. That way, you can compare the cost of a lead that comes through Google Adwords with one that comes from a Facebook campaign. Or how much a referral costs versus your latest PR efforts in the local news media. Understanding the dynamics of your acquisition costs is especially important when you are looking to grow the business, because it allows you to scale your marketing budget in a realistic way when you are planning your growth.
Lifetime Value
The lifetime value of your customers is the average amount that a customer spends with you, from the moment they move in until the moment they move out. This includes retail sales, insurance, van hires and any extra fees that you may charge. The reason why it is so important to know the lifetime value of your customer is that it will help you determine what kind of discounts you can offer and what your ROI is on your marketing expenditure. You may find that you can make your referral offer even more appealing or that the pay-per-click advertising you are running should be tailored towards the longer staying tenants, because you are too close to the break-even point on customers who only stay for a few months.
Length of Stay
One of the things that has fascinated me as I have worked with different self storage companies is how different the average length of stay can be between two businesses in the same market.
Why? Because it all comes down to who they are targeting in their marketing. If you are primarily targeting movers, then your average length of stay will be quite short. The leads you get will be quick and easy to convert, because they have an immediate need. But they will also be out of your facility quite quickly and this churn rate will require you to have a well-oiled marketing machine to keep “feeding” your sales funnel with new movers. On the contrary, businesses who target many different customer segments in their marketing and who accept that some segments will be slower to convert, will often have a longer length of stay.
The correlation between length of stay and marketing activities is a powerful area of your business to dive into. If you make changes, these will take time to trickle through to the KPI level, but it is absolutely possible to shift this over time.
Abandonment Rate
This is potential buyers who get as far as your rental or payment form, then abandon it before finalizing a purchase. There are a variety of possible reasons for why this could be happening, a few of the most common are:
- Unexpected additional fees
- Unsure if they’re making the correct purchase
- Long checkout process with too many fields
- Payment security concerns
- Overall poorly structured user experience
This is an essential metric for self storage business owners to track, and it can point to greater problems that are occurring on your site or with your general offering. If you can learn why visitors are abandoning their purchase, you can take action to minimize it happening in future.
Your Turn!
Did I get the list right? Which KPIs make the biggest difference in your business and what changed when you started tracking them?
