5 Reasons Aggregators Are Bad For The Self Storage Industry

by Kenny Pratt

An off-topic, but important post.

I may not agree with Randy Smith on everything, but I think we should all rally around the movement he is creating to abandon the online lead aggregators.

His arguments against the aggregators are sound.

Here are a few reasons I’m throwing my public support behind the movement to abandon the self storage lead aggregators.

  1. They destroy property value in the long run by pushing the industry to compete more heavily on price while at the same time increasing costs.
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    The aggregators are not creating additional value for self storage owners.  Instead, they are taking the self storage owner’s share of the pie and giving some of it to consumers in the form of lower prices and taking some of it for themselves through their fees.  Since they haven’t made the pie any bigger, the more the aggregators become entrenched, the more self storage owners are left with a smaller piece.

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    Aggregators increase your cost of marketing online by giving you another (large) website to compete against. Aggregators also increase your cost of marketing by adding another sales channel that must be managed by someone in your organization.

  2. Aggregators create value for themselves by standing between you and your customers and charging you for the privilege. The aggregators are marketing to the same consumers your are and by using them you are creating additional online competitors.
  3. Aggregators dilute your brand and homogenize your position in your community. Your company’s message and its personality are lost on aggregator websites. You are forced to look like everyone else. You have very little ability to differentiate yourself from your competition except through the deepness of your discount or the size of your move-in special.
  4. You are better off investing in your own web presence. Using an aggregator is like renting your web presence. Owning your own corner of the web is much better. (You are a real estate investor or you work for one… this should be a no-brainer.)
  5. In the long run aggregators benefit the biggest self storage operators over the smaller, independent operators.
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    The REITS are more capable of maintaining their high ranking on the search engine results pages regardless of the lead aggregators. The small guy is the one at risk of being pushed off the first page as lead aggregator sites rank higher and higher in local markets. If I were the marketing director at a REIT I would negotiate lower fees than the small guys (because at a REIT I would control a large amount of inventory) and because I was secure in my own search engine ranking I would use the aggregators to push more of my local competitors off of the first page of Google/Yahoo/Bing.

Full disclosure: You can find a testimonial I wrote for Sparefoot on their website here.

I have used several of the lead aggregators and my rational for doing so was simply this:  if they were going to be there, competing with me online, then I may as well be part of the listings that storage consumers find when they go to their sites.

This logic only holds if you believe the aggregators will always be there and cannot be avoided.  I’m not ready to concede that point.

I believe that as an industry we can act to reverse their growth.    Thus, I’m throwing my support behind Randy Smith and his efforts to educate the industry about the long-term dangers they pose to self storage industry profitability.

The examples from the airline, hotel, and and other industries are clear.  Aggregators help themselves, they help consumers get lower prices, and they harm the profitability of the  industry they become entrenched in.

Now is the time walk away from the aggregators and take back our marketing and our relationships with customers.

Reminder:  The opinions expressed here are mine alone, and not necessarily those of my employer.

  • James J. Hanrahan

    Well said Kenny

  • James

    Kenny…  well written.  Having experience on both the operator side as well as the web design side, I couldn’t agree more with your points.  I especially agree with your point on owning your own web presence and not “renting” it from these guys.  It has been a slow process to help redirect this industry towards online independence and the first step is to get your own house, or website in this case, in order.  Your website is the one place online where you can maintain your brand as you see fit and as we all know, this industry is still very much brand oriented.

  • Candyrodewald

    Excellent thoughts  Is there any reason we as independent storage owners can’t get together and form our own aggregator at a lower cost to us individually?  Like a coop.
    Candy

  • James

    You don’t need an aggregator to get the business.  I am currently writing an article to this effect for the Mini Storage Messenger’s March/Tradeshow issue.  As a small operator, you have more advantages thank you think over larger operators.  You can react quicker than larger companies and aggregators to changing local trends, events, or specific items that your tenants are looking for.  You have the ability to customize your website to your tenant base and submarket because you generally don’t need to attract tenants outside of your core trade radius and you can do this without a board meeting or a planning session.  Speed and personal knowledge of your clients is a huge advantage you have over the competition.  Granted that is only a small part of the SEO puzzle, but with the way search engines are modifying their algorithms to seek out and subsequently serve up more locally relevant results, you can use your front line knowledge and intuition to your advantage more than you probably are at this point.  Does that make sense?

  • James

    Kenny… I’ve created the Self Storage SEO LinkedIn group and would love to see some of your input from time to time.  I’ve included a bunch of these links on the groups page, but for those that don’t use LinkedIn, I’ve created an SEO Cheatsheet and I recently syndicated a post by SEO Expert Rand Fishkin on how to utilize anchor text efficiently here:  http://www.barkingtuna.com/barking-tuna-web-design-blog/

  • http://sharemystorage.com/ Nizam: Share Storage

    I think the approach is wrong.  Each unit on its own trying to advertise on its own in a space that has billions of billboards (websites) – how do you get noticed?  Aggregator’s have more marketing power at a small expense of each unit.  If the service is good, the same user who initially found you through an aggregator will probably come back to you direct or tell friends they stored at yours.

  • Nick Nichols

    “His arguments against the aggregators are sound.”  Page (PDF) not found.  Any suggestions?

  • Tom Psillas

    I have heard these dumb remarks before. Aggregators are great for both the consumer and good operator. This is because the consumer can shop for best deal or best location with best ratings. Think about it. Would you want to put all your belongings in a storage unit that leaks? Also, the consumer can see that paying more for better security, due to the ratings is better.
    The consumer will find the aggregators anyway and use them.
    Only the bad apples in this industry should be worried. Only an idiot would think the consumer has his/her head in the sand. Those days are gone.
    I ONLY use aggregators ever since I lost most of my expensive furniture at a Public Storage Facility. They claimed I had no insurance, but their roof leaked and damaged my stuff. If I had checked with an aggregator, I would have found out they had this problem many times before.

    Now, I operate an aggregator and owners love us because they get a chance to rent out empty space quicker. It is better to be full, than 60% full, even at a lower rate. It is all about supply and demand. Everything is now being bought and sold on dominant marketplaces.

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