When you're looking to increase the profits of your self-storage business, it can be difficult to see beyond your need to attract new customers. But finding more customers doesn't have to mean finding new ones - you can also convince old customers to return.
This can mean encouraging previous customers to come back and use your services again. It could also mean simply convincing your existing customers to extend their contracts. Either way, it's a fantastic way of driving customers without having to constantly chase new ones.
More and more self-storage customers are choosing to stay with the same self-storage facility. Research shows that the churn rate (the number of customers leaving self-storage companies) has been in a steady decline since 2015. And in 2021, it took a dive right down to 76% which is a reduction of 55% over 6 years.
These impressive reductions are possible because the churn rate for the self-storage industry was so high. This means there is still a huge amount of scope to reduce the number of customers leaving.
Yet many self-storage business owners don't realise this is a realistic possibility - let alone how to make it happen. So we put together this post to help storage businesses see the potential customers already in their midst. We'll even offer tips on how to update your marketing strategy to maximise the number of return customers you get.
The benefits of repeat customers are well-known in the retail world. A return customer is cheaper to acquire and is likely to spend more. These aren't just empty beliefs either - multiple studies have shown the business benefits of customer retention.
One study by a global management company found that a 5% increase in customer retention can create up to a 25% leap in profits. Another found that the average repeat customer will spend up to 67% more than a first-time one.
Fewer facts and figures are available on services like self-storage but the basic psychology that drives this behaviour applies universally. And when it comes to self-storage, it can be much easier to convince customers to stay as you already have practicality on your side.
The process of packing up and moving the contents of a self-storage unit takes time and money in itself. In most cases, a lot of both. So if a customer is still in need of storage space, you're already at an advantage over your competitors once they're in the door. The vast majority would rather stay where they are and won't need much encouragement to pick your business for a second time.
It is easy to say you need to earn more return customers but making it happen is a little more difficult. Here are some self-storage marketing ideas that should be easy for self-storage businesses to implement to increase customer retention.
Obviously, this tactic is technically aimed at gaining new customers. However, research suggests that customers who are initially referred by word of mouth have a 37% higher retention rate.
People who sign up through a referral program will already have a positive image of your self-storage business. This can create a bias in your favour - they focus more on the positives that they heard about and can be more forgiving of small niggles and issues.
One way to encourage referrals is to give your current customers an experience worth raving about. However, referral programmes with rewards for both the prospective customers and the existing ones will actively encourage both.
Another tactic that might feel relevant only for new customers is finding the right target audience. Targeting homemovers is a great way to get the most out of your self-storage marketing costs because you will have a higher likelihood of getting them to sign up for your business. You also need to target them at the right time.
When you target a specific audience, such as homemovers, you can also build detailed customer personas to analyse what your customers are looking for. This level of insight is equally valuable for customer retention as it is for attracting new customers, and your 'existing customer' personas can be informed by any and all information you collect from your initial qualified leads.
Too many businesses only offer discounts to brand-new customers. This is great for initial appeal but will leave existing customers cold. In fact, it may even put them off if they believe only new self-storage customers are being catered for while long-term ones are being taken for granted - or ignored completely!
Encourage return customers with renewal discounts or referral incentives. These show that you care for all your customers equally so they feel more valued.
Another reason an existing customer might choose to move to a new self-storage facility is when it offers products or services that yours does not.
It is better to do fewer things well than stretch your business too thin. But there is a range of easy add-ons that customers appreciate from self-storage units that can help broaden your offering.
Things like climate-controlled self-storage units, packing supplies and smaller discounted storage units are all services people might be looking for in a self-storage facility. Diversifying and expanding your storage offering could get people to stay at your facility, as well as encourage more customers to sign-up in the first place.
Following every single point we've listed will prove pointless if your self-storage customer service is lacking. And while customer experience might feel like the retention method your business has the least control of, it really isn't.
Mistakes are made, and unforeseen problems arise. It's true that no self-storage facility can avoid them completely. But what matters is how you and your team react and how you compensate. From being helpful and supportive on a day-to-day basis to taking ownership of issues and addressing them quickly, there is plenty of ways to provide excellent customer service.
Saving the best till last; to increase your retention rate you have to learn from your previous and existing customers' experiences and improve.
This important step is one that takes time and is never over. Your self-storage facility will always have opportunities for improvement but that won't always be in areas you spot yourself. Instead, you need to learn from the sources who know your customer experience best- your existing storage customers.
Check out your negative AND positive reviews on a regular basis so you can see where you excel and where you can improve. Distribute service surveys for existing customers with incentives to fill them out ( service discounts, affiliate vouchers etc).
And when a customer leaves, make sure to find out why. Even if many of them are because self-storage space is no longer needed, people who had a bad experience or have a driving reason will relish the opportunity to make it clear.
Collect this information, study it and improve on it.