Wednesday, July 9, 2014

Coupon quandary: Are Groupon and LivingSocial right for your facility?

Social media couponing sites like Groupon and LivingSocial are best known for daily deals on local restaurants, health clubs, day spas, psychic readings and vacation getaways. But how does self-storage fit into the mix?

Better than you might think, actually. In fact, operators who’ve tried Groupon not only filled units but retained new tenants beyond the promotion’s expiration date.

‘It Definitely Helped’

Take Chester Heights Self Storage in Glen Mills, PA. Last fall, the facility offered a three-month rental on a 10×10 unit for $70—an attractive $355 discount—and filled more than 20 vacancies among its 400 units during the slow season.

“It definitely helped,” said Lee Kunkel, assistant manager at Chester Heights. “Probably 50 percent of them ended up staying past the three months at the regular rate.”

Chester Heights Self Storage

Chester Heights Self Storage achieved success with its Groupon deal.

StoragePartners in Kirkland, WA, had a similar experience two years ago when it first tried Groupon to help open a 600-unit Seattle location.

“We had a fairly large response, close to 50 redemptions,” StoragePartners President Jeff Norris said. “We felt that 25 to 30 tenants stayed for some period after the deal expired, so we thought it was pretty successful.”

Since then, StoragePartners has used Groupon twice and LivingSocial once.

Questioning the Coupons

But not every operator is sold on social couponing.

Anne Ballard, president of marketing, training and development services at Atlanta-based storage operator Universal Storage Group, said Groupon declined to work with her several years ago to promote one of her company’s Florida facilities. She’s still not sure why, but her best guess is “because it doesn’t create demand like a $5 manicure.”

Stacie Maxwell, Universal’s vice president of marketing, questions the value of Groupon and LivingSocial for storage facilities.

Marc Goodin

Storage owner and consultant Marc Goodin is not sold on daily deals for storage facilities.

“Ours is a needs-based business—either you need to fill up an empty unit with stuff or you don’t. You’re not going to rent an empty unit because the price is good,” she said.

Marc Goodin, a storage owner and consultant who is author of the book “Crush the Competition,” prefers to do his “couponing” face-to-face. While he doesn’t object to the social media version, he views it more as a way to reduce vacancies before selling a facility than as an ongoing marketing strategy.

“I know people who do that, and sometimes that makes sense,” Goodin said of Groupon and Living Social deals.

Small Investment

Could social couponing benefit your facility? While results may vary depending on location, demographics, timing and available units, Groupon spokesman Nicholas Halliwell said any facility with more vacancies than cash on hand should consider it.

“The key thing is, they don’t have to invest any money upfront on marketing costs—they only pay on deals that are actually redeemed,” Halliwell said. “Where they have a fixed asset and empty units are costing them money, why not do a Groupon and see if you can fill them up?”

While the typical split between merchant and Groupon runs 50-50, “it really depends on the number of times we’ve worked with that merchant and the types of deals,” Halliwell said.

“Most of the deals that we’ve run with storage facilities have gone one of two ways. Either they run a certain value—say, $300 worth of storage for $150—or they’ve taken the ‘Buy three months, get three months free’ approach,” he said.

Deal Builder

Groupon recently introduced Deal Builder, a create-your-own-local-deal platform.

Product Improvements

Early on, Groupon built its brand by sticking with merchants that had sufficient volume to meet the huge demand that can be generated by an Internet bargain. While that left some merchants like Ballard out in the cold, the strategy paid off. Since Groupon went public in 2011, it has grown from 1,000 online deals to more than 200,000 worldwide.

To overcome those early disconnects, Groupon has:

  • Expanded its mobile platform, which is a plus for storage facilities in college towns and tech corridors.
  • Introduced Gnome, a point-of-sale tablet to help customers get the most from their Groupon offers.
  • Launched Deal Builder, a create-your-own-local-deal platform.

“Deal Builder allows us to work with more merchants and more types of merchants in more places,” Halliwell said.


LivingSocial recommends treating voucher-bearing customers like full-paying customers.

Tips for Coupon Success

If you’re considering a social media coupon deal, Clint Perez, senior director of marketing at LivingSocial, offers these tips to help make the most out of the deal:

  • Preparation: Expect an increase in phone calls and emails during the first few days of the deal. Consider having additional help on hand to answer customers’ questions. Also, look into creating a dedicated email address for fielding inquiries.
  • Training: Ensure that all of your employees are able to answer questions related to your deal. You probably can expect questions about services that are covered and about the deal’s fine print.
  • Customer service: Treat voucher-bearing customers like full-paying customers. A good impression will help drive repeat business.
  • Promote: Be sure to inform coupon customers about other products and services, such as locks and moving boxes.

What’s Ahead?

Whether the growth of e-commerce will attract more storage operators to daily deals remains unclear.

“My gut tells me it’s just not as exciting anymore for consumers,” said Norris, the StoragePartners president. “Still, if you run a three-month deal in May when students are heading home for the summer, it solves all their problems at a good price.”

But Universal Storage Group’s Ballard said that’s precisely the problem.

“Discounting is going away, hopefully, and we’ve worked hard to make that happen since the end of the recession,” she said. “Couponing would be my last inclination. I’d have to have some special circumstance, such as a brand-new facility that nobody is renting, to want to give it away.”


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