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.
- 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.
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.
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.
- 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.
- 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.
- 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.)
- In the long run aggregators benefit the biggest self storage operators over the smaller, independent operators.
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.
