Looking to improve your marketing efforts but don't know where to start? By analyzing different data, such as your leads and ROI, you can know exactly what you're doing right and where you can improve. Alex Bernath, from StorageAhead's business development team, will cover phone and reservation tracking as well as aggregators, PPC (pay-per-click) and SEO (search engine optimization).
Alright, thanks everybody for joining us today for another edition of the StorageAhead webinar series. My name is Alex Bernath and we are going to be talking about ROI. Specifically, driving more profit from your website and ROI & lead tracking from different sources online.
Let’s go ahead and get started. We will have a Q&A session at the end of this presentation, so go ahead and type in any questions as you have them and I’ll address all of those at the end. If there is something that you want me to go back over further, just let me know in that questions box and I will be sure to discuss it. So, let’s get started.
The first thing that we are going to do is, I want to outline a couple of points that we want to cover today, and really the goals of doing this webinar. The first thing is understanding how to use lead tracking to calculate ROI of various online lead sources – how do we calculate the ROI? Also, using ROI to understand performance of online marketing from various sources. We’re going to talk specifically about SEO and your website.
We’re also going to talk about pay-per-click (PPC), as well as third-party aggregators. We’re going to discuss using ROI to understand how to improve your online marketing, so what do these numbers and data come up with?
What does it tell you? How do you use that information? Like I said before, we’re going to use SEO (website), PPC, and third-party aggregators as examples.
First, let’s go ahead and define ROI. ROI is simply net revenue from a specific online marketing spend – return on investment. Of course, ROI can be calculated for anything. We’re specifically talking about online marketing today. This is measured by cost per lead and cost per rental, and those are two things we’re going to be looking at calculating today to get an idea of your ROI from those online lead sources.
Let’s define lead tracking. Lead tracking is the process of tracking leads generated through any marketing campaign. Online, of course, we have certain types of leads that are probably pretty standard. You’ve got phone calls, online reservations, direction prints (if you have the ability to print directions to your store on your website or other online marketing), coupon prints (a lot of times, printing off a coupon online will also capture user data like email address, name, information like that – what store are they printing the coupon for?), and then inquiries (that’s just simply a question that’s posted on the website – how much is your 5x5 if I want to rent from December to January?). Just the generic types of online leads presented here.
We’re going to specifically focus on phone calls. To explain why, about 95% of all leads are phone calls. I know a lot of people kind of question this or wonder whether or not it’s the same for their locations, and this does vary based on locations. The only time that you’ll find any significant difference is going to be, say, right next to a military base. Or really close to universities or other college campuses during May or August when people are leaving or coming back to school. You’ll definitely see higher online reservations and inquiries. In general, younger people tend to use those online sources a little bit better or a little bit more, I should say. We still see about 95% of all leads are phone calls, just as an average across the country. Phone calls also have the highest conversion rate. What I mean by that is, from a leads to rental standpoint, you’re going to get a much better conversion rate from a phone call than you are from an online reservation. There is that sense of human interaction; somebody has actually spoken to your manager. They can get directions to the facility from where they are located, generally it’s a local person who understands the area, and the customer feels really comfortable with that. When storing stuff, people want to store with somebody that they feel comfortable with. So there is always that level of human interaction that phone calls provide that the other lead sources do not.
The most important type of lead, in general and in my opinion, is once again: if we’ve got most leads through phone calls and they have the highest conversion rate, this is really what you should be focusing on if you’re trying to measure performance of an online marketing campaign. All of those other types of lead sources, they’re all great, but if you’re really trying to track the performance of an online campaign or any other marketing campaign for that matter, in this industry, the phone call is really the king of the lead types.
Here’s a glossary of terms that we’re going to use for this presentation:
VOIP – Voice over internet protocol. This is simply a method of phone tracking and there are multiple ways to track phone leads. We’re going to talk about VOIP simply because it is a cheap and effective way to track phone calls.
Cost per lead – Cost per lead generated through a specific marketing initiative. Cost per lead is essentially a dollar amount associated with a lead. Once again, we’re going to look at phone calls, but you can associate this with any specific lead type or just all leads in general. CPL = Total cost for marketing/number of leads.
Cost per rental – This is calculated using that cost per lead number that we just discussed. A good approximation is 1 in 7 phone calls rents That’s online – different marketing sources have different conversion rates. But just for the purpose of this webinar today, we’re going to assume that cost per rental is the cost per lead times seven. CPR = CPL*7.
Maximum Cost per Acquisition – This is the amount you are willing to spend to “buy” a tenant through marketing. If you break down a renter and the value of a renter, which is the next one “lifetime value of a tenant or the average revenue you generate from one tenant,” you then have to decide what is the maximum amount that I’m willing to spend to fill that unit? This is something we’re really going to look at later in the presentation when we’re doing those examples. You’ve got to have that number, and understand your lifetime value of a tenant and understand your maximum cost per acquisition so that you can decide whether or not you are really getting what you need to be getting out of your online resources and whether or not they’re sustainable.
Lifetime Value of a Tenant – The average revenue you generate from one tenant.
Let’s go ahead and talk specifically about lead tracking. Why track leads? Many people still use visitors as the only method of performance tracking for their marketing. This is actually very common. Traditionally, this was one of the only ways, or the only accessible ways, to track performance of a website. Visitors are a very good metric, but it’s not the only metric. What I mean by that is, you can really get an idea of performance of and SEO campaign. Where is my website showing up? How many click-throughs is my PPC campaign actually driving? Visitors are an indicator of that type of performance. However, there is a whole other piece to that. If you’ve got great visitors and great traffic on your site, but you have very few leads or you’ve got a really bad website where all of the pages are broken, you’re not going to drive any phone calls or any rentals off of that website.
Really, it’s better to understand how many leads are being generated and there are two parts. Visitors are driving traffic to your page, your website is driving those leads based on the quality of the website, the ability to interact, how fast they can interact with the website, so user interface and user experience (UI/UX). Lead tracking, in my opinion, is the only way to truly know whether or not your marketing dollars are working – from driving traffic to actually getting rentals and filling up your units.
Let’s talk about tracking phone calls. Like I mentioned earlier with tracking numbers, which is the VOIP, these numbers are managed over the internet instead of the public switch telephone network, which would be cell phones or land lines or any phone number you get from a carrier. VOIP numbers must forward to a number on the public switch telephone network, so those have to forward to a number managed by a carrier. Essentially, they’re just placeholders in between the caller and your actual landline that capture data. They can capture data such as recording the call, the caller ID or the time & length of the call. Depending on what you’re really trying to access, VOIP numbers have tons of capabilities so you can do a lot with them. VOIP is cheap and effective, as I mentioned earlier. Out of installing hardware and some other options – where, you know, a lot of time people think of phone call recording and they think that they need to install hardware at their location to actually capture that data – VOIP numbers are extremely cheap, effective, and they’re so easy to set up. You set up one phone number, you put it on the website, and it will start recording all of that data instantly. One thing I did note, there are many providers, so if you are looking for VOIP tracking numbers after this webinar, and you decide that it’s worth looking into, make sure that you shop around online. There are tons of providers and some of them provide a lot more data, but they’re more expensive. There are a lot of them that are made for agencies. You’ll find that it’s pretty cost-effective if you buy 10,000 phone numbers, but nobody needs 10,000 phone numbers unless you’re a marketing agency. Shop around and you will be able to find a pretty good deal on VOIP.
What does phone tracking tell us? Like you guys know, phone tracking really gives us two bits of data that we really need. One is “how many leads are we getting?” So, for my website, Alex’ Storage, and on my location A, this is how many leads we are getting. So this is much better data than the visitors, right? I know this store vs. this store gets ten more phone calls per month, and I know that it’s going up. When I look at the historical data, my leads are going up and my phone calls are going up through my website. It also tells me the quality of the leads. There are a lot of lead sources online that may not drive the same quality of leads as others, so you can listen to those phone calls and you can really see that this is a great lead source. We’re getting a great conversion rate from leads to rentals from our website, or from our PPC campaign, whereas something else doesn’t work as well. So those are the two things that you need to understand that phone tracking provides.
The next section is ROI. We’re going to talk about breaking down, we’re going to use those examples of a website, a PPC campaign, and third parties to break down cost per lead and cost per rental and understand the ROI. So, how to track leads through your site or calculating the ROI, and what this tells us. This is what we’re going to look at for the website and other associated SEO, such as Google Local, which are those maps and listings; Yahoo! and Bing as well. You’re going to use a unique VOIP tracking number, on your website, of course, and I would definitely suggest that you use a unique number for each location on your site. If you have stores in different markets, your website is going to show up differently in those markets for different search terms, and you want to understand the performance of each individual location on your site. You definitely want to use a unique number for each location. I always suggest that you use local area code numbers, it’s better for conversion rates. If you’re area code 913, people would like to call a 913 number because they feel that they’re going to speak to somebody that’s local, as opposed to an 888 number. Also, use the same number on your local listings. Google Plus, Yahoo! Local, Bing Local – using the same number on those lead sources really shows you an idea of not only leads through the website, but those Google, Yahoo! and Bing Local listings drive traffic straight to your website as well. Evermore, as people are using mobile websites on their mobile phones, if they see that Google Local listing, they just press the push-to-talk button. You want to capture those calls as well and associate it with that same data.
So, calculating ROI. Calculate the total amount you spend monthly on your website, local listings, and any ongoing work, such as SEO. Use this value to calculate the cost per lead and cost per rental. For example, in March you spend $500 on your website and SEO. I would assume your SEO provider is also managing your Google Local, Bing and Yahoo! listings, and you get 100 leads total. So your cost per lead is that $500 over 100 leads or $5 per lead. So, we know that we’re spending about $5 for every lead that comes through the website. Now remember, I said that cost per rental, or a good approximation, is one in seven calls rents. You’re going to have current customers call, you’re going to have wrong numbers, and you’re going to have people calling for an auction. So, cost per rental for this example is going to be $5 times that seven to get $35 per rental. Now you may have an incredible sales team, your managers can close 50% of all the calls that come in, but, once again, like I just mentioned, you will have current customers calling to pay their bill. It’s always safe to go with that one in seven, whereas some people might think it should just be one in two. So, $35 per rental, that’s pretty good. What does this tell us? Cost per lead and cost per rental are good ways to put a dollar amount on the performance of your website and SEO. Once again, this takes into account any increase in visitors, because you’re going to get more leads. The more leads through your website, the less you’re going to spend on cost per lead and cost per rental. I did write down any cost per lead over $10 is too high. This is definitely seasonal and of course depends on market. We’re going into the slower season now. If you’re around that $10, or even if you’re just slightly higher, it’s not significant cause for concern, but I would definitely evaluate your website, I would evaluate the SEO that your SEO company is doing for you, and try to understand if you can be doing better. We’ve already done a webinar on understanding SEO for storage, and you guys can find that just by going to StorageAhead.com/self-storage-webinars. I think it’s the first one listed. That might be a good resource if you’re kind of in this boat and want to understand “how am I doing online?” So, definitely check that out.
Compare your cost per rental to your maximum cost per acquisition to decide whether your current SEO campaign is sustainable. Say that I know the lifetime value of a tenant at my facility is $400 or $500, and I’ve set my maximum cost per acquisition at $100. That’s the amount I’m willing to spend, and I took into account occupancy, what units I have left. If I’ve only got 5x5s, I’m not going to spend $100 to get that renter. If my cost per rental through my website and SEO is $35, then yes, this marketing campaign makes sense. It’s those kinds of questions you’ve got to ask yourself about every marketing spend that you have, or you’re going to be blindly spending money and may very well be just losing money. Remember that changes in the in these values are going to happen over time – it’s seasonal. We’re in a seasonal industry. However, year-over-year data is extremely good as far as cost per rental to say “What’s going on with my website? What’s going on with the billboard out front?” If you cost per rental is going up, then you’ve got an issue. If your cost per rental is going down, then you’re doing pretty good, something is going right.
Next, we’re going to talk about PPC tracking and ROI, so how to track phone leads through PPC. Once again, we’ll calculate the ROI using the example, and what this tells us. PPC drives leads to your website. It can be tricky to isolate calls from your PPC campaign because a person that clicks on the PPC campaign is going straight to the website. So, you say “Alex, you just told me to put a tracking number on my website, now we’re driving traffic from PPC, I can’t break it out.” Well, there is a way to do it. It’s really not too difficult, but will probably need to talk to your website provider or the person that built your website to see if they can set this up for you. It’s called dynamic number insertion. This is the practice of inserting a different number onto your website if a visitor arrives from a PPC campaign. Basically, it’s some code on your website that says “if the visitor arrives from this domain, or this URL, show this phone number.” This allows you to completely isolate PPC phone leads from organic leads. You’re going to separate any phone calls that are driven from PPC from anybody looking at your Google Local listing or Yahoo! or Bing or somebody that just found your website. This gives you the ability to track the cost per lead and the cost per rental through PPC. Because cost per click for a PPC campaign varies between markets, you will want to use a unique number for each store in your PPC campaign. This is SO important, especially for PPC, because every market is different. You could be paying a dollar per click or you could be paying ten dollars per click. This is obviously going to greatly affect your cost per lead, and therefore your cost per rental. So definitely use separate numbers for each store in your PPC campaign.
Calculating ROI. Just as with your website, you can calculate your cost per lead and your cost per rental from calls generated through your PPC campaign. For example, you spend $2,600 in March for PPC and you get twenty phone calls. Your cost per lead then is the $2,600 divided by twenty, or $130 per lead. I approximated again for the cost per rental, $130 times seven or $910 per rental through PPC. This is obviously very different from the $35 that we calculated through SEO and your website, and it does seem extremely high. However, this data is fairly accurate. Let’s talk about that. What does this tell us? PPC is expensive. If you’re paying even $4 for a visitor, and you’ve got to make it all the way through picking up the phone, and it has to be somebody who is interested in storage, and then it’s got to be somebody who actually rents from you. By the time that whole process happens, we see an average cost per lead of PPC around $125. The other thing is that the lead source is not as qualified of a lead source as organic traffic or those maps listings. Instead of that one in seven, it may be higher. It may be one in nine or one in ten. If you’re spending $125 and up for every lead, and it takes ten leads to get a rental, we’re talking over a thousand dollars to get a single rental. Compare that to your maximum cost per acquisition. Is the PPC campaign you’re running sustainable? This really is unique to every situation. You’ve got to look at your PPC campaigns – I can’t stress that enough – because it is very feasible that you’re spending way more money to get a rental through PPC than it’s worth. If you spend $1,000 for a 5x5 rental, clearly that is not worth it. Using VOIP tracking, listen to the calls that come in through PPC to understand the quality of the lead. Maybe in your market, PPC works very well. Maybe it’s cheap, you get a lot of traffic, and the phone calls are all good. By having the VOIP tracking system, you can listen to those calls. Using this information, you can make an informed decision about whether or not PPC is a good marketing campaign for you.
The last example we’re going to use is aggregators and third-party marketing sites. I’m going to break this down into types of aggregators and the costs associated, and discuss does this ROI make sense for your company. The first one is the flat monthly fee. This type of third party works very well and can be very cost effective, but only if you’re getting leads. If you’re paying a flat monthly fee and you’re not getting any leads through it – say you’re spending $70/month and you get no leads – then you’re basically burning $70/month with no benefit. I would suggest you only use a flat fee service if you can track the leads generated. A lot of times, these types of services will give you the ability to track leads. They’ll have recorded phone calls on their system, they’ll have reservations and direction prints. That’s a sign that vendor knows what they’re doing and they’re willing to show you what you’re getting. Another part of that is if this flat monthly fee service is month-to-month – nobody likes to sign year contracts on something they don’t understand or don’t know if it’s going to work – most flat monthly fee services, and especially ones specific to our industry are month-to-month. Definitely check that out and understand the costs associated and calculate your CPL and estimated CPR. Does the product make sense for your company when compared to your maximum cost per acquisition? As long as you stick with third-party marketing sites or even aggregators that are specific to our industry, I think you’re going to find that they are fairly cost effective lead sources.
Next is the pay-per-reservation or booking fee. These services charge booking fees only for a reservation or a rental. Essentially, they are removing risk for you. However, you need to pay attention to the costs. You’re not paying anything unless you get a rental. Say you pay $100 per rental, that’s great. If you’re paying $100 for a 5x5, does that make sense when you put that up against your maximum cost per acquisition? Does it make sense if you pay $100 for a 10x30? Using information specific to your company, specific to your location and your occupancy and all of those different factors, understand whether or not this model works. A lot of times, this is a very effective way to get leads. Once again, if they are part of our industry, then they’re generally quite effective. I would definitely suggest you look at these sites as a lead source.
Pay per reservation, or the percentage of rent model. This model asks you to pay a percentage of the rent for any reservations or rentals they send you. Generally the percentage is 30% for the monthly rent of the lifetime of the lease. Just like the other lead sources, does this make sense? A lot of times, this may not make as much sense. However, there are definitely cases where this works. You’re giving away 1/3 of your revenue off of the rental from the start, but if you’re a developer and your only goal is to fill up the property or if you are just empty and need to increase occupancy, if you just can't rent 10x30s and you want to list 10x30s, these are a great way to go. Once again, you’re not really taking any risk; you’re not going to pay for anything if you don’t get a rental. Definitely look at it and if it makes sense, by all means, use it.
In summary, and after this we’ll jump into the Q&A session, you can use VOIP tracking numbers to track your phone leads from multiple marketing campaigns. Use the data that you get from those tracking numbers to understand the ROI from your marketing by calculating your cost per lead and your cost per rental. And then of course compare your cost per rental to your maximum cost per acquisition to understand how marketing fits into your marketing plan. Does that marketing campaign work? Does it make sense financially? Does it fit into your marketing campaign? Maybe your dollars would be better spent on a different marketing campaign. By using this data, you’re going to really get a better idea of what’s going on, and you’re going to be able to make better informed decisions that really greatly affect your company. With that, we will go ahead and open up the Q&A session. Go ahead and chat any in the questions box that you guys can think of and we will take a look at that.
Q: What is the VOIP tracking?
A: I’m guessing that it’s asking about data that you receive through VOIP tracking. Really the most important data that you’re going to get through a VOIP tracking system is 1) the recorded call, so you can listen to it and see if you really have a great lead source or if the leads coming through are not that valuable; 2) you’re going to get the number of calls. On top of that, it is important to see stuff like when did they call? If you’ve got a PPC campaign running and you’ve got tracking on it, and you see that 90% of all the calls come after office hours, and there’s nobody there to answer the phone, that tells you that you need to go in and edit your PPC campaign so that it doesn’t run after business hours. You can really use those VOIP tracking tools as much or as little as you want. I know that they can provide caller ID information, lead source information, time, length of call, recorded calls – there is lots of information that you can get from those.
Q: Are you talking about buying numbers or leads?
A: I’m definitely talking about buying numbers. You do have to pay for VOIP tracking numbers. Generally what you’ll find is that companies will charge you for the number of lines. Maybe a flat monthly fee per phone number/per month, as well as minutes. Other ones give you a certain amount of numbers for no charge and then it’s just a minute charge. So, it really varies by vendor. As far as buying leads, PPC is definitely buying leads. You’re buying visitors; you’re paying to list at the top of Google. For somebody to click on that, you’re paying a dollar amount for every click through to your website. I’m not specifically talking about buying leads, but definitely talking about tracking all of your lead sources.
Q: What is a good PPC budget per month?
A: Honestly, I can’t give you a specific dollar amount, because very market varies and of course it varies based on your store. If your occupancy is 90%+, I wouldn’t do any PPC, because you’re at 90% occupancy or higher. If you’re in a market that is not doing as well, if your property is not doing as well, I would definitely suggest that you start small. Analyze the traffic that you’re getting, analyze the calls that you’re getting, and then increase or decrease from there. I wouldn’t jump in and spend a lot of money from the start. PPC costs vary so wildly between markets and it’s such a unique question based on market and based on property that I can’t give you a great answer about that. Sorry.
Q: What are special issues with locales near military bases?
A: As far as issues, I can’t really speak directly to that. I do see that you’re going to get – obviously, near a military base, you’re going to have a population that is very reliant on self storage – they’re traveling all of the time, they’re deployed. A lot of properties near military bases are quite full. I think as far as marketing, what you’re going to find is that you need to have a good website. I think that’s probably #1, because the population around those military bases is generally quite young. They're tech savvy, they have nice phones, they have computers, and when they look online to rent a unit, they’re more than likely going to reserve online. They’re going to gather as much data as possible before ever picking up the phone and calling. If you don’t have a good website in that kind of market, I definitely think that you are missing out on some great leads and possibly a large amount of rentals.
Q: Does StorageAhead offer the dynamic number insertion? What is the cost?
A: Truthfully, at StorageAhead, we don’t necessarily suggest that you run a PPC campaign. If we do, we absolutely do dynamic number insertion and the cost is extremely minimal. Really the only costs associated with that are the tracking lines.
Q: We use a 3-mile radius for our PPC campaigns. Is that a good number?
A: In general, three miles is really a good number. I think that the standard distance that people say in storage – and of course this varies based on urban or rural market – five miles is generally where your leads are coming from. If you’re within five miles, people are likely to pick up the phone and call. Outside of that, it’s really going out of your way to get somebody to drive all that way to store. Three-mile radius for PPC is probably pretty good. Even more important than your radius for your PPC campaign is stuff like negative keywords, turning your PPC campaign off after business hours, really focusing on spreading that PPC cost out across the month. A lot of times what you’ll find is that people with a PPC campaign will run out. The beginning of the month they get a lot of hits. Well, if you’re getting a lot of hits at the beginning of the month, that’s likely your current customers calling to pay their bill, right? You don’t want to spend money on PPC for your current customers. There are a couple of ways around that, with negative keywords being probably the most important. I would say turning off your PPC campaign after office hours – it makes no sense to pay for a lead if they call at 3 o’clock in the morning – and making sure to spread that spend out across the month. Those are probably the top three most important things for PPC.
Q: I cannot separate organic clicks from PPC clicks right now. Is there a blended average cost per lead amount that I can use as a guide?
A: The short answer is no. The reason why is because PPC varies so wildly in effectiveness. Earlier, what I said was you have a $2,600 spend and you got 20 phone calls for PPC, versus organic and the website, we had a $500 spend/month and 100 leads. That ratio, there’s a huge difference there, right? You’re spending a huge amount of money on PPC and you’re getting very few leads, and that’s actually fairly accurate. If you really start following this and tracking it, you’re going to notice that your PPC campaign does not drive very many leads. It may drive click-throughs, and you may be spending a lot of money, but generally the lead quality is so low from PPC that you’re not going to get that many phone calls. This varies based on the percentage of calls that you’re getting versus organic and it varies based on your market. The cost changes dramatically. If you’re in Dallas, the cost per click for a PPC campaign could be $15. It varies so wildly, I think there are too many factors to have just a guide or a blended average to calculate a cost per lead.
Q: Do you think that in a facility where we’re about 60% occupied, is it worth it to start a PPC campaign?
A: Once again, you have to understand your market. If you do start a PPC campaign, I strongly suggest that you start with a low dollar amount and that you do dynamic number insertion to make sure that you’re tracking every aspect of that campaign. If you let it run for a few months and you go through the data and you see that “hey, we’re getting pretty good numbers here, our cost per lead is actually not that high,” then yes, definitely grow that spend. If you realize that you’ve spent $100 every month and you’ve gotten zero leads, which is not too far-fetched, then I wouldn’t start a PPC campaign at all. I would just cancel it completely. This is something that you’re going to have to test out, but using these concepts and these tools that we’ve discussed during the webinar, you’ll be able to effectively manage a PPC campaign and you’ll know whether or not it’s working. Before you dive into a PPC campaign, I would suggest that you evaluate some other options. Definitely make sure that your website is doing what it needs to be doing. Definitely make sure that you’re using some of those self-storage specific aggregators – whether they be third-party marketing sites or reservation model aggregators – I think that you’re going to get a much better cost per lead through those, and you’re probably going to be much more effective than you would through your PPC campaigns.
Q: How long (in months) does it take to see results?
A: I guess that this question is probably regarding PPC. PPC is supposed to be instantaneous. You pay, and you show up at the top of the Google search for whatever terms you want to show up for or whatever phrases. So, as far as PPC goes, if you set everything up correctly, you should be seeing results almost instantaneously. It’s not like SEO or link building campaigns or the Google maps, which definitely take some time to grow and to do better online. Once again, that’s one of the things that people really like about PPC campaigns.
Looks like we don’t have any other questions being typed in. I really appreciate everybody joining today. If you do have any further questions, by all means, contact us here at Red Nova Labs. We’re happy to discuss what we do as far as lead tracking, what we do as far as PPC and what we would suggest you do with whatever website or whatever online lead source you guys are currently using. Give us a call, the phone number is listed on this slide. Thanks again, have a great day.