Direct mail campaigns, if executed properly, can have great returns for self storage facilities.
They help spread awareness and, with proper timing, can even lead to a healthy increase in rentals.
But if you’re not familiar with direct mail marketing for self storage, you may have a hard time coming up with a cost-benefit analysis. After all, how much does it cost to send mailers to all of your potential storage customers?
Let’s take a look at what direct mail marketing is and how much it costs. We’ll even cover some tips at the end!
Have you ever received a postcard in the mail from a business?
That’s the result of a direct mail campaign.
These campaigns can be targeted specifically to your market area without the risk of catching eyes outside your market the way online ads can sometimes do.
Furthermore, some studies show that direct mail campaigns have an average conversion rate of around 9 percent (though this rate is likely to be much lower for self storage).
The cost of a direct mail campaign can vary from as low as $320 to as high as $37,000 (or even more!).
Fortunately, the USPS has a handy tool that helps break down the costs of such a campaign.
Unfortunately, there are a lot of variables to consider.
To start, here are some of the variables you’ll need to consider:
Below are some base prices listed in the USPS’s calculator and from our own research to help you get started, though we highly recommend checking out their tool when it comes time to actually plan out your direct mail marketing campaign for self storage:
Let’s make a pretend self storage direct mail campaign.
In this example, we’re targeting 4,802 homes in a roughly 3-square-mile area of Knoxville using EDDM and postcards designed in-house using free templates.
This example direct mail campaign for our self storage facility is going to cost us a total of $4,528, rounded up to the nearest dollar.
Here are the details of our campaign:
Here’s the breakdown of the math:
Maybe “How much does a direct mail campaign cost?” isn’t the right question.
Let’s be honest: no one wants to spend $4,528 dollars on marketing for a single round of postcards.
But before we decide if a marketing strategy is worthwhile, we need to consider the return on investment. It may look like a big price tag upfront, especially for only a 3-mile area, but we don’t really know how worthwhile it is unless we determine what the risk-reward metrics are.
Let’s take our above example. What result do we need in order for this direct mail marketing campaign to be profitable?
To know this, we need to determine our average lifetime customer value.
Determining our average lifetime customer value
This value can be as specific as it makes sense for our campaign, too. If we’re targeting student-heavy neighborhoods with a student storage-focused special rate or program, then we don’t really care about the average lifetime value of our non-college-aged customers, for example.
In this case, let’s keep our math general. Our 4,802 households are being targeted purely because they’re in our geographical market range.
If we know that the average length of stay at our facility is about 10 months, and the average monthly rent our tenants pay is around $100, then that’s an average lifetime customer value of $1,000.
For more help determining this value, take a look at this mini-guide.
All right, so our average lifetime value is $1,000. Our marketing campaign cost is just under $5,000. This means we need at least 5 rentals from the 4,802 households to break even.
Of course, there’s always an argument to be made for awareness campaigns where your goal is just to stay in the market’s mind for when they DO need a self storage unit. But that’s a lot harder to track.
You must be pretty committed to using direct mail marketing if you’ve made it to this point!
If that’s the case, let’s go over some ways you can refine the campaign to make it suit your needs.
Here are some of my other favorite posts to check out!
At StoragePug, we build self storage websites that make it easy for new customers to find you and easy for them to rent from you.
