No one likes using aggregators. Ideally, all your rentals would walk in the door of their own accord, having heard glowing testimonials from existing tenants.
However! Expensive leads are better than no leads, and business isn’t always pretty.
There’s another factor besides cost to consider before you start paying aggregators for leads, though. In this blog, we’ll dive into some of the drawbacks to aggregators beyond the cost!
Lead aggregators, such as SpareFoot, RentCafe, and SelfStorage.com, do serve a real purpose in our industry. While they are expensive - often charging 2-3x the monthly rent of a unit to transfer the lead over to your team - they can work.
If your customers tend to stay for 6 months or even a year, you’ll quickly make back the 2-3x monthly rent you spend to get the lead.
For brand new facilities looking to lease up, for premium facilities that make good monthly rates, and for facilities with long average rental durations, it can make financial sense to pay for these leads (even if you wish you had gotten the lead the old-fashioned way).
Every self storage marketing avenue costs you some investment, even if it’s just your time. There’s no way to get new tenants for free - even if you’re only paying for a great-looking street sign, you’re spending money on your marketing.
If you don’t know your cost per rental, it’s hard to determine which marketing methods (including aggregators) are your most effective. Maybe the aggregators work for your business!
Or maybe they don’t.
Operators get frustrated with aggregators because the aggregators are competing for the same leads.
Aggregators will buy up valuable Google ad space and then, when they capture a lead, sell that lead to a business that was also bidding on the same ad space. More than that, aggregator websites often dominate the top organic search spots, taking more potential clicks (and potential renters).
So, no operator sits down hoping to have to pay the aggregators for leads, but sometimes that’s the only path forward.
If you’re getting enough leads from cheaper sources - and any other leads you’re getting are almost certainly cheaper - you don’t want to waste your money.
We’ve talked to a lot of self storage folks, and plenty of them make good use of Sparefoot or other aggregators. They’ve done the calculations, and the additional tenants ended up worth the extra cost.
Maybe you’re in a similar situation - the math says to keep buying leads.
But there are other factors that some of our industry friends have pointed out that you may not have considered!
When you’re filling out the budget, it all seems pretty clear-cut. A tenant stays on average X months, yielding Y rental revenue, so Z aggregator cost is worth the acquisition.
But the problem that some operators are facing is that all leads aren’t equal.
Obviously, you’ve seen this in practice. Some folks come in and rent a storage unit and pay on time for three years before they move out. Fantastic leads.
Others try to rent a unit with a truck parked out front that is suspiciously full of mattresses (or tires, or, in one wild case, their mouse-breeding setup).
Those leads are not worth the same amount, but on a spreadsheet, they might both have the same value: one rental acquired.
In some areas, aggregator leads lose a lot of their value because the quality of the lead is lower. When you’re in charge of your marketing, you can build a target audience that matches your business.
When you’re relying on aggregators, you don’t have control over who the marketing goes to, what sort of angles are presented, or how your rules are displayed.
Leads that come through an aggregator may not know anything about your facility except the address and the price of the storage unit.
You pay the aggregator for a lead - not a rental.
While the customer may think they’ve basically rented a storage unit on one of the aggregator sites, they have no contract with you. They can change their mind, they can stop at the wrong facility, or they could simply be unable to pay - you’re committed to the aggregator as soon as you get the lead information.
In this industry, we’re not firefighters or emergency room doctors, but there are times when you’ve got to hustle. Renters are not patient - remember the 5 Ds? Lots of potential tenants aren’t shopping around, looking for the best deals, or waiting for some manager to get back with them.
They need stuff stored now, and they don’t want to waste any more time or mental energy on the problem.
A lead that hasn’t paid any money is completely within their rights to choose a different facility. Maybe one they see on their way to visit you. Maybe a big billboard catches their eye. Maybe they called a different facility before hitting the aggregator, and that facility has called them back - promising to beat your price.
This is going to happen with a percentage of all your leads. But the leads generated by your own marketing don’t cost you nearly as much.
Your cost/benefit calculations need to include these eventualities because you’re certainly footing the bill regardless.
Should I Use Self Storage Aggregators at All?
There are certainly lots of risks associated with getting leads from aggregators. If you can fill up storage units without them, that’s the best way forward.
On the other hand, if your facility is sitting there half-empty, you’re losing money that way too.
My point isn’t “aggregators bad, don’t use!” (That would have been a much quicker post to write and I could already be on lunch). Sometimes aggregators are useful. I’ve heard from operators that I respect that aggregators play a big part in their rental acquisition!
Aggregators can be useful, and it can make financial sense to pay for those leads. Just make sure you’re factoring in the potential lower quality of the leads and the risk of not converting the lead.
If the numbers still make sense after you adjust for those factors, then go for it!
If they don’t, put that money into your other marketing methods instead.
Make the most out of your self storage marketing with these:
StoragePug is a modern marketing company for self storage. We create intelligent marketing websites that allow you to rent units & take payments through your facilities' website.
