Does the word aggregators make you cringe? Matt Friederich, a member of StorageAhead's business development team, will share his insights on how to make online storage facility networks work for you—whether it's as a website replacement, companion marketing or a way to track results. We'll also show you how self storage networks differ from existing airline and hotel aggregators and how the search engine model truly works for our industry.
Alright, everyone. We’re going to get started here. I know we have a few people trickling in still, so I am going to start back from the top here. I know some of you, looking through the list of attendees, I’ve worked with several of you and some of you are aware of what we do. My name is Matt Friederich and I work in business development here at StorageAhead on a number of our platforms. Today’s webinar, as you know, is going to be on Aggregators: Not Necessarily a Four-Letter Word. We’re going to discuss aggregators as a whole and what they do in the self storage industry. As you’ll notice here at the bottom of this slide, we encourage you to tweet your favorite quotes, lines or comments at us. Or if you have any feedback or questions during, after, or even in the weeks following the webinar, please tweet us @StorageAhead, or feel free to use the hashtag #SAWebinars on Twitter.
The first thing we’re going to cover here is just a brief agenda of what we’re going to discuss today. The first is “What is an aggregator?” We’ll go over the general history of aggregators and show you a couple of examples of self storage aggregators that I am sure many of you are aware of or use or have used in the past; how aggregators work, and what are some of the benefits of using self storage aggregators.
What is an aggregator? As you can see here, I just typed in a basic Google search and it popped up with the results. I thought what Google came up with described it perfectly. The first definition you’ll see says “a website or program that collects related items of content and displays them or links to them.” The second one also pertains to self storage. You need to switch the words around a little bit, but an aggregator is a service who packages their service and sells it to consumers. In this case, the service being their SEO ranking and their ability to drive leads to self storage operators.
To briefly discuss the history of aggregators, as you’ll notice here, one of the most commonly known aggregators and biggest aggregators are in the hotel and restaurant industries. I know many of you are aware of several of these brands that are posted on here, you’ve probably even used either all of them or a few of them from time to time. If I was to list all of them, it would be several slides worth of aggregators in the hotel and travel industries. Really the one thing to cover on here is the industry vs. the consumer. In the hotel and restaurant industries, the aggregators were really great for consumers. The amount of people flying on airlines and the availability for people to book flights really took off. From a pricing standpoint, it made pricing more competitive across the board, and from a selection standpoint, they had the ability to go across multiple sites to see a long list of flights from a long list of companies. In the past, as many of you may remember or have dealt with yourselves, you had to go through a travel agent or you had to speak with the airlines directly, so it was really hard to shop or compare pricing. As many of you know as well, it wasn’t necessarily good for the industry. It commoditized a lot of it because people began to look at every flight as equal, and the same goes for self storage. People begin to look at a 10x10 as a 10x10, regardless of who they’re renting the 10x10 from or what other features that 10x10 may have. But one thing it does do, is it does drive consumer behavior and demand. People tend to use these sites over and over, and many of you might use the same aggregator site every time you fly, you may use two or three of them, or you may use a service like Kayak to compare all of them.
The next thing we’re going to touch on is some of the self storage aggregators. Again, many of you are familiar with the brands on this page, this is just a snapshot of some of them that are more commonly used or known about. What self storage aggregators are doing – I put in quotes there as you’ll see “leasing” the space to self storage operators. Through the aggregators’ efforts online – with engineering, development, content – the constant and long-term results of their SEO (search engine optimization) work – they’re leasing this space out to the operators to be found on the search engines to drive you business. There are a couple of different types of self storage aggregators – or two different models, if you will. The first being a subscription based model or monthly fee model, the second being a pay-per-reservation model. Many of you have probably used these or are using several of these brands on this page, and we’ll go into how each one of these works next in the webinar.
The first ones to cover are the ones that were on the left hand side, the subscription based or monthly fee model. These can be extremely cost effective, they usually charge a low monthly rate – it might be anywhere from $50 to $75 or $80 a month. While the cost is nice, there is a much higher risk, because you do have the risk that if you do not receive a rental, that you’re still being charged. At the same token, with a higher risk, they can generate a much higher ROI (return on investment) than the other pay-per-reservation models. For example, if you were to rent a 10x10 for $100/month, with an average stay of 12 months, that equals about $1,200/year. So for that low $50, $60, $70/month charge, you’re essentially making approximately $1,100 profit from that one rental. The biggest part, or the biggest thing to make sure operators are doing, and a lot of the services provide it with their subscription based or monthly fee is to make sure that you’re tracking your leads. It really is the most crucial part, whether you’re using an aggregator or any other type of advertising online. Many of these services have recorded phone calls, the ability to show you every time someone clicks on a coupon or prints directions off on your aggregator's page that they provide you, so you can get an idea of exactly how people interact with your page or the type of leads you’re getting.
The second one to briefly touch on here is the pay-per-reservation model. Some people prefer this and really like this because they’re essentially paying for the reservations they have confirmed are sent to them by the aggregator. They can be a little more expensive, but it also has a much lower risk, because again, you’re only paying for the rentals or the reservations you receive. A lot of times with these services that are pay-per-reservation, the price can vary. For example, maybe a 5x5 might cost you $50 for the reservation, or a 10x10 may cost you $100. Those aren’t exact numbers, but just to give you an idea. Usually, the larger the unit, or maybe climate controlled or some other specific type of unit, the cost might be much higher. The other thing that a lot of these pay-per-reservation models do, is that they spend a huge amount of money in the Google Ad Words or pay-per-click (PPC) ads. Not just Google, but Bing, Yahoo! and some of the other search engines. They’re essentially taking the risk out of paying for these Google Ad Words for a lot of operators, large and small. So instead of you paying per click – maybe someone clicks on it twenty times and you never receive a rental – the aggregator is taking that risk, because they’re essentially trying to drive as much business to you as possible. Instead of you having to spend the money and be at risk, they are taking the risk. The other thing that they do as well in the PPC ads, they are also more aware of how to manage them properly. Many self storage operators do a great job of managing their own PPC ads, but there are a lot – especially smaller operators – that aren’t aware of all of the ins and outs of Google Ad Words or PPC that could be beneficial to their brand to drive them traffic, so they don’t always get the best marketing spend out of that PPC. It might be more cost effective for them to use the pay-per-reservation model.
The next one we are going to briefly touch on is the % of rent per month model. Generally speaking, these models actually pay a percentage of the rent anytime someone rents or reserves with your facility. On average, the percentage they ask you to pay for the length of the lease is 30% of the monthly fee. So, in the case of the $100 10x10 rental we used for the other ones, it can be very expensive as well. $30/month for the lifetime of the lease would cost you about $360 for that year for that one rental. Whereas the pay-per-reservation model may have cost you $100 for that reservation and the subscription model may have cost you a bit less – around the $50/$60/$70 range.
The next thing to touch on – I know there are a lot of smaller operators on here – especially one-, two-, three-store brands, there are some very good benefits of aggregators for these smaller operators. An example I like to use is the struggle of the small operator vs. the bigger market. As you’ll see in the example, I used Dallas, Texas, but really you can use any metro or any large city market. As many of you know, these markets are extremely competitive. You often have several storage facilities in the same general vicinity, you’re also competing against many of the larger REITs or larger brands in that market, or management companies that have been working on their website and their SEO for a long period of time. So it’s very hard for them to keep up from a budget standpoint, resources standpoint, and many times they haven’t spent as much time doing some of these things, so they’re already behind. I’m going to jump over to a Google search here that I have pulled up. What I searched here is just one of the most basic self storage related searches. I typed in self storage, followed by the city name and state. As many of you know, this beige box here is the Google Ad Words or PPC ads, along with the ones here on the side. This is where aggregators often spend money as well to drive you business, and they manage that on their own to give you as many rentals as possible. Going down to what are called the organic listings below the PPC ads, you’ll notice how competitive just a market like Dallas can be. Sparefoot, for instance, is an aggregator, and they’ve done very well from an SEO standpoint in this market. They’re ranked very high. The next one down here is Public Storage. As you can see, they have 58 self storage facilities just in Dallas metro. As you go down this list, you’ll see more and more of these REITS and large operators. You really don’t see any smaller brands on this first page. You can see how – I hate to use the word impossible – but, the uphill battle for a smaller operator is very steep as far as landing on a first page for search in a major metro area like this. Same thing goes for another search I typed in, Houston – there are REITs only on this whole first page essentially. To jump back into the slide here, the other thing aggregators can do with smaller brands or even medium- to large-sized brands is that they can help them be found not only in their immediate markets but surrounding markets as well. Maybe you’re one of the few markets in the area that has climate control, or maybe you have a specific type of wine storage, or maybe you have an extended amount of RV and boat parking that someone doesn’t have in your general area. Aggregators help give you more exposure in other markets. If you’re in other suburban areas when people are searching for your brand – for instance, in Dallas they may search self storage Dallas, but maybe you’re in Plano – you might be able to see that even though you’re 10-15 miles away, you find a brand that has a specific deal, maybe you like the way the facility looks – it’s clean and looks nice – or maybe they have certain amenities that might help your brand. It can help extend the range of your business.
Some of the other benefits of using aggregators – again, as many of you know, it’s an additional way to drive leads – there are a lot of people that use aggregators on a temporary basis, just during busy season or maybe during the slow season when they’re not receiving as much traffic, they want to generate some higher occupancies. The good thing about that is that aggregators usually have no contract or long-term commitment, so you’re not locked into anything. Maybe you just need it for two months, maybe you need it for six or a year, you really pick and choose how often you come and go from using the aggregators. If you are around 80/85% occupancy and you want to get above that 90/95% range, you might use the aggregators for a couple of months to help fill up your facility. You can then get off of it and do the same thing five months down the road if you drop down to 80% again. The other thing it does, and a lot of people will use it for, is that it gives you an additional spot to be found on the search engines. As we went over that first search, it’s very competitive on the first page. Not only in big markets, but every market, and there are only so many spot on that first page. If your website is on the first page, that’s great and I definitely commend you for that. It takes a lot of effort to get there, but having another piece of real estate – or what we like to coin it – another ticket in the raffle to be found on the search engines. You are only helping your brand out by having more spots on that first page, because if you’re not doing it, someone else is most likely taking advantage of that. In smaller markets or medium-sized markets as well, you usually tend not to have as many people on the aggregator sites. In Dallas or Houston or some of these other metros, on a lot of the aggregators there are 50-100 or even more brands all listed on these pages. In smaller markets you might find only small handful, or you might be the only one, so essentially all of the traffic for that extra spot on the first page of search, all of that traffic is essentially being funneled into your store. You might have your website coming up first or second or third, but there might be an aggregator listed fourth or fifth, and that just gives you another way to be found. If someone does pass by your website, they’re able to find it again. The other thing that goes along with a search from an SEO standpoint is that aggregators can help brands come up for a wide variety of searches. A lot of people might use a local guy or a local SEO company or even a small design firm that doesn’t put in as much time and effort because they don’t have the resources to research that there are not only five basic terms that everyone looks at, but there are hundreds of terms. Even the most awkward, long searches, such as “storage units near I35 in the Quick Shop on Main Street.” We see a long range of searches that people search, and aggregators want to help you come up for those searches as well. Your website might be nowhere to be found on these searches, but the aggregators are. It’s allowing you to come up for not only those main searches that most people optimize for, but that wide range also. That being said, there is less competition for those off-the-wall searches, and if you’re on the aggregator site, that might be the only way for you to be found on that search, so it can only benefit you from that standpoint.
This is kind of a rare example, and I added this slide in later on in the presentation after I had seen there were a larger number of small operators that would be attending this webinar. There are some smaller operators, especially in small markets, that use aggregators for their website. I’ll show you an example of that here shortly. The reason for that is if you really want a nice website with a lot of features that the aggregators have, it can be very expensive. It could cost thousands of dollars. We always encourage you to have your own website, because it’s very important to drive the majority of the leads from your website, and allow aggregators to fill the void. But there are a number of people in the industry that use aggregators for their actual website. A couple of reasons for this that I have listed here is the low cost – again, if you’re paying a low monthly fee, or you’re paying a low cost per rental, or even a percentage, you can get a nice looking site for a very low cost. The other side of that is many of them have a clean design, they also have a conversion design that they’ve put a lot of research into and they do a lot of ongoing research as well as far as what layout is the best for you to drive leads to your store that the average person building a website might not be aware of, because they don’t deal in our industry. The other thing a lot of them can do to help you out as well is that they can do maps management. Many people manage their Google, Yahoo!, Bing maps themselves and can do very well at it. The benefit of having an aggregator handle it for you is they can use the knowledge they’ve received from managing maps in almost every market in the United States to help your brand. If different terms are working in other markets, they can plug those in. If there’s a new practice that Google comes out with that they prefer on their maps, an aggregator is probably going to be more aware of it than you as an operator, who have your hands full with just running your business – this just takes something else off of your plate. Many of the aggregators make this an optional service or some of them charge an extra fee to do that, but it’s just another way to drive traffic to your store through an aggregator. To touch base on a few more of these – mobile website – a lot of them have a mobile version of your site. Instead of having to pay someone to make a mobile website, your aggregator page already has one. Call tracking – many of them include call tracking and then you get the SEO efforts that are already proven with the aggregators showing up very high. Instead of building a site and not knowing if it will ever show up in search, you know that the aggregators are already there. Down the road, maybe you want to build your website, but for the time being, you know you’re going to show up in the first page, especially if it’s short notice. Maybe you acquired a facility in January and you want to make sure you’re on the first page in March when busy season starts to pick up. The last thing on here is site management software integration. If you’re using some of the larger site management software like SiteLink web, CenterShift, Web Self Storage, many of them integrate with your aggregator’s self storage website, so you can get a lot of advanced features such as pulling pricing and availability, using push rates, et cetera, that you might not have with your normal website.
That being said, I want to jump into one quick example for you smaller operators on the site, to give you an example of a brand that I’ve personally worked with that uses a self storage aggregator as his website. Scrolling down here, you can see that again, Sparefoot has done very well in the Toledo area. There is a larger brand listed at the top and another larger brand listed in the maps, but if you go below here to Bayshore Self Storage is pointed at his StorageFront page, so through the aggregator’s efforts, he’s coming up higher on the search. You find StorageFront again here below where he’s coming up high as well. So for that low monthly fee he’s paying, he’s coming up twice on that first page. Now, this doesn’t happen in every single market, it’s not fair to say that and many of you know that. But for this particular brand, he thinks that having StorageFront as his website has been beneficial to him. If he were to call me and ask me if he should build a website, I would definitely tell him to do so. Again, that goes back to you should always be driving the majority of your leads from your website, and aggregators should be used mainly to fill the void. But, in certain situations like this, it made sense for him to have this as his website.
Jumping back into the slides, the next thing we’re going to discuss is the conclusion. I know this webinar was kind of short and sweet, but for many of you some of this was repetitive. I just wanted to give everyone an idea that aggregators can benefit your brand in a variety of ways. Businesses large and small use it to compete for leads online. If you’re spending any type of advertising dollars, whether it’s through an aggregator, your website, a billboard, a newspaper ad, we always encourage you to slap that tracking number on there. I know just from personal experience, we’ve saved a lot of people money. I’m sure other companies that you have used for tracking can save you an extensive amount of money. When you can actually see where that money is going, you can get an idea of how many tracked leads you’re using each month and what type of ROI they’re generating. Aggregators can be good for operators, but yes, from an industry standpoint, it is making it harder for other operators to end up on the first page, because the aggregators are spending a lot of time and effort to be there. Also, on that same token, as we went over on this, it can help the smaller brands.
The next thing we’re going to do here is plug our next webinar! Abby Madison will be giving one on Social Media “How to Make Storage Social.” A lot of questions we get at StorageAhead are “How can I use Facebook, Twitter and G+, and what are some of the best practices for that and ways to improve my brand?” We’ve noticed there’s a real lack of information out there for someone just trying to learn some social media basics, and Abby will be discussing that on October 3rd at 11a central time.
That being said, we’re going to jump into Q&A here. If you have any questions or information you’d like us to discuss again or go over, feel free to chat us your questions! We’re kind of limited on time, so we’ll get to as many as we can, but we always encourage you to call us, the number is listed there and on the StorageAhead site as well. Also feel free to email us at any time, with any questions and we’ll make sure we get them all answered. That being said, I appreciate everyone’s time, and at this point if you have any questions, let us know and we’ll answer a couple of them here on the webinar.
Q: How popular is the percentage of rental fee model today, and what trend do you see with that model?
A: I know some of the services that use that model, it has picked up in the last year or so. It is relatively new to the industry, and what we feel is, yes, it can be more expensive, but if it is driving you an ROI, then we encourage you to use that. Whether it’s the percentage, the reservation or the subscription, if they’re driving that ROI, we encourage you to use them. The trend we see with this model is that it has really picked up. We said that 30% is generally the percentage people pay per month for the lifetime of the lease, it’s really up to each individual brand what they feel is best for a particular facility.
Q: What storage management software do you like?
A: Really, I think there are a lot of great ones out there. I would say that the more common ones we hear about are SiteLink Web, Centershift, Web Self Storage is very popular – and then you hear of other ones that are a little smaller, with not as many customers, that also do very well – Syrasoft, Storage Commanders. We really don’t prefer either one, SiteLink Web and Centershift are definitely the most robust, but that being said, they can also be the most from an investment standpoint for a self storage operator.
I think we’ve got one more question coming in, give me one second, someone is typing. The next question is…
Q: Do you integrate with self storage software providers?
A: Yes, there are several services that do integrate with some of the site management software providers, most of those being SiteLink and Centershift. Some of them have integration with Web Self Storage. Obviously eMove and Web Self Storage are roughly the same thing through U-Haul that are integrated.
Next question here…ah, it looks like that person stopped typing! If you have any more questions though, I know some people don’t like to ask them online, feel free to contact us again. That being said, we really appreciate everyone’s time, I know you guys are busy – especially this time of year. Again, I appreciate your time. If you guys are going out to the national self storage association show in Vegas here in a week or two, I encourage you to stop by as well. It’s always nice to put a face to a name in the self storage industry since we only get to see operators so often. I appreciate your time again, and hopefully business is good. If you have any questions, let us know! Thank you.