Attract Self-Storage Investors with the Right Ingredient
The self-storage industry is emerging from the past several quarters of robust consumer demand and significant investment from new and existing investors looking for greater returns than conventional Wall Street investments. However, as we enter 2023, pent up consumer demand is just about gone and investors are pushing up Cap Rates as a result of higher interest rates.
If valuation, expansion plans, and access to capital are important to you, then maybe a new ingredient can separate you from the competition.
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It’s no secret that investors are attracted to the self-storage attributes of being somewhat inflation resistant and having the benefits of month-to-month leases and muted new supply. Today’s investors are also looking for additional factors including customer acquisition strategies. Most investor presentations of the past have relied solely on operational excellence and a track record of success. The vast majority of self-storage operators are unable to adequately convey the entire value they are creating for their investors. Most haven’t considered the need to pitch investors on their marketing plan. Here’s how partnering with Adverank can help you attract investors with the right ingredient.
Some of the most successful “ingredient branding” campaigns were launched by brands such as Intel, Gore-Tex, and Splenda. Intel was one of the pioneers of ingredient branding, realizing a 12x increase in revenues as a result of their early promotions. The Intel brand created demand from consumers looking for “Intel Inside” as a representation of quality and advanced technology. Pitching Adverank to your investors as an ingredient can reflect a compelling and profitable marketing strategy that leverages the strengths of your organization. It can articulate an integrated marketing strategy, with a balanced emphasis beyond facility management and operations.
Ingredient branding can also provide more value and marketability of your business to investors. Partnering with Adverank will differentiate your operation as having a key marketing ingredient that is based on algorithms, efficient PPC spending, budget-friendly fixed fee pricing (no commissions on pay-per-click ad budgets), etc. Gore-tex is also a prime example of a successful "ingredient brand“, which is when a product component has its own identity and becomes one of the main reasons for buying the product. Adverank will send a message to investors that your company is utilizing advanced digital marketing to reach potential customers while your competition is still wading through more traditional marketing techniques that are expensive, difficult to quantify, and pale in comparison to Adverank’s ability to more accurately target consumers and control PPC spending at the same time.
Boosting Facility Valuation after Investment
While there are still many passive investors in the market, many more active investors are coming to the table that will inquire about your plans to boost valuations once the investment is funded, particularly with facilities in lease-up status. Splenda sweetener is another example “ingredient brand” that consumers commonly see promoted among other products. Splenda is considered to be the “miracle ingredient” for driving revenues in the beverage industry and has gained wide appeal among consumers.
Similarly, Adverank clients have been able to answer the bell on numerous occasions when investors have questioned their plans to achieve targets presented during the investment pitch. Our clients responded with faster lease-up rates, increased profits, and higher valuations, exceeding the original investment goals. Meanwhile, other operators have to cross their fingers and hope that past results are achieved in future operations.
The time is right to establish your company with investors who want to invest in companies with expertise and innovation, on top of good management. If raising capital or keeping investors happy is on your radar, then perhaps it’s time to spice things up with Adverank as a key ingredient to your investment strategy.