Customer Satisfaction Is Paramount
Several years ago, The Self-Storage Almanac, published by MiniCo, provided data on the various user groups’ average length of stay. Reporting that military and students were an average of four to six months, residential customers averaged approximately nine to 14 months, and commercial customers 28-plus months.
We still see these same trends today, but with the extension of stay times for both residential and commercial customers. Now, we use operating software that reports our store’s unique set of measurements and characteristics for our customers.
It is always interesting to look at the various stores’ reports and see the average length of stay for their current customer base. For the older locations, this can be amazing as they can have over 50 percent of the customer base with them for more than five years.
The charts below represent the data we collect in SiteLink for our entire portfolio each year and represent a summary or cross section of the industry. The report called the “Marketing Summary” tracks the demographics and other attributes of our customers and lets us see where we have special or Gold Star customers, as I call them, who have been with us a long time and have a great transaction record deserving of some special treats or goodies such as double referral fees or annual gifts.
As you can clearly see above, the recession took away some of our long-term customers from 2008 until 2010. However, since the recovery began in 2012 and 2013, we are recouping those long-term customers on a steady upwards trend.
Understanding how the population uses our product and the drivers for length of stay and customer satisfaction are paramount to keeping them happy and in place while still growing income and NOI. That, along with clean properties, excellent customer service, signing them up to our “No Late Fee Guarantee” using their credit card to auto debit the rent and insurance each month, consistent rate increases and communication with them via emails and texts, all assist us in not giving the customer any reason to move out. Of course, customers who are moving will make changes. And, should their circumstances change, they may no longer need storage. However, there is still a large percentage of customers who will stay for many years, even decades, if treated well and fairly at a property kept clean and well maintained. We see from our data that customers will change if given too many rent increases in a year or if customer service suffers or is inconsistent.
Our observations indicate that we have in our portfolio an aging population of customers given our mostly suburban locations. This older group of baby boomers have higher disposable incomes and more “stuff” they believe to be valuable and want to keep, showing 38 percent just storing excess stuff. The charts below show what makes up the contents of the units and their reason for storing, as well as the age of our customer base and how that has grown over time. Boomers are going to use storage as a lifestyle management tool; i.e., they can put off emotional decision making and just rent from month to month.
The Marketing Summary report showing the Average Length of Stay provides the following information, and notice how the aging of customers tenancy shows up in bands. I have chosen a Class-A location that has been open since January of 2009 for this purpose. Notice that over 34 percent of the customers have been with us for more than three years; the average length of stay for this store is 2.48 years.
All those in the greater than three years column can be treated with double referral fees or a special holiday gift such as a bottle of wine and personal note. Customers tend to refer others like themselves, so we would want to cater to that group or base.
Knowing these things about our customers helps us make sure we treat them to amenities they will have a positive strong response to, as will all our customer groups; amenities may include warm cookies, coffee bar with cold water bottles, conference rooms for free meeting place, on-site events and parties, a neighborhood board showcasing local businesses, and email contact with them frequently.
In closing, it is important to understand your customers’ motivations and measure your performance. Look to your software reports to understand your current customers and seek out new types to grow your average length of stay and happy customer base.
M. Anne Ballard is the president of training, marketing, and developmental services of the leadership team at Universal Storage Group.