Aggregators in Self Storage
Comparison and "lead generation" websites that display business details and sometimes pricing are commonplace on the internet and are known as aggregator sites. Comparethemarket.com, booking.com and the like are often used by consumers to get the best deal, and although they appear to be in the interests of the consumer they take a significant share of their market’s revenue, despite not actually providing the end product the consumer actually receives. So is there a place for an aggregator in the UK self storage market? Would the industry benefit from the extra exposure, or are aggregators just third party players adding to the overall cost of the product?
Aggregator sites position themselves as beneficial for everyone. They claim to help consumers find the best value products or services, and to be an effective and efficient marketing platform for businesses; all while making a tidy profit for themselves. The reality though is somewhat different in many industries. Aggregators tend to commoditise what they are selling, placing more emphasis on price than other selling features. They also remove the actual seller of the product from the sales process, limiting their ability to value add the benefits of their business. Aggregators that become dominant in their market are then in a position to upsell their own product, charging more for premium listings and controlling who gets more exposure to the customers. In the end Aggregators add a cost to the industry that us ultimately borne by both customers and operators. Sounds a bit like yellow pages in the 90s doesn’t it?
The real concern with aggregators in the UK self storage market is the lack of understanding of the product by the general public. If a customer is looking online for a hotel room they have a general understanding that the offering of a Marriott Hotel will be different to that of a small B&B. Hence they make their own value judgements based on the service levels they require. The challenge with self storage is that many customers do not really understand what self storage is, let alone how to distinguish between different operators with different prices. Some customers just see it as space, so it’s all the same. This is a bit like saying it’s just a bed in a hotel room, they are all the same. If the customer does not understand exactly what the self storage proposition is, they are not in a position to effectively evaluate providers based on a simple listing. This means they may take a low price provider that does not give them the service they need. Or they may be worried that the low price providers are somehow inferior, so take a higher price provider with services they don’t need. Also remember the aggregators do not have direct access to your prices so what they are displaying can be out of date or incorrect. Particularly as the industry moves towards more dynamic pricing models.
The other challenge with self storage is that, as we all know, it is a very localised business. Most people are not going to travel 30+ minutes to their self storage provider. For an aggregator to be successful in the self storage market it needs to provide very localised results, not based on an entire suburb or district. If the customer uses an aggregator to search for storage and finds none close enough to them, then they may conclude that there is no local self storage provider and look elsewhere. If you are being sent storage enquiries from people outside your catchment then you are unlikely to convert them, which is of concern if you have effectively paid for that lead through an aggregator.
Aggregators can give smaller self storage sites exposure that would normally be outside their budget, particularly with the increasing cost of PPC and other online marketing channels. Some operators see this as an easy way to essentially pass off their online marketing to someone else. It is true, a well established aggregator can often get greater exposure than a small independent. However you are also handing over the marketing of your brand and your image to a 3rd party. What does the aggregator do to distinguish your business from all the others on their site? Does it promote the features and benefits of your business? Does it encourage customers to call your store so your staff can sell the benefits of self storage to them personally? Also you are essentially devaluing your own online real estate, your webpage, by adding more competitors with big budgets into the marketplace. The major operators will still have a great online presence, then the aggregators will fill up the remaining space, listing both your business and your competitors with little differentiation. They will also drive up the price of pay per click advertising and other online marketing in order to promote their own sites and compete with the major self storage operators. Where does that leave your website which should be the prime generator of your online enquiries?
Google is doing more to reward independent local businesses through changes to its algorithm. It is putting more focus on local searches, displaying businesses that have a physical location with their map listings, which aggregators do not have. Particularly for self storage, the local maps listing is important for potential customers. After all location is by far the most important consideration when someone is looking for self storage. So if an independent self storage business wants to increase its presence online, maximising their local search presence can give real results. Aggregators have no local presence so they will not show up on map based searches.
Experience from other industries also shows that if an aggregator gets established in an industry then it is likely more aggregators will also join. This means operators end up on multiple aggregators sites, sometimes getting referrals of the same customer from multiple sources. This does not provide an efficient or effective service to the customer. Just look at the travel industry, they now have websites that aggregate the aggregators!
So, while on the surface it may seem that paying someone else to give you referrals and market your business online is a good idea, there are many potential down sides and in the long term it may not be beneficial to your business or the industry as a whole.
The SSA UK has a particular issue with aggregators that attempt to establish themselves by harvesting data from operators websites to create their site without permission from the operators. The result is an aggregator site full of business listings where the business has not agreed to be part of the site, and in many cases the information being displayed about their business is incorrect. Sometimes these sites even attempt to pull pricing information from operators’ websites to include in their own aggregator site. The laws around this kind of activity are somewhat ambiguous. What is clear however, is that these sites cannot use your business logo or any other copyrighted material without your permission. The SSA UK actively works to remove members details from these websites. We have a standard letter that members can send to the operators of such sites requesting their details be removed, and in some cases have threatened legal action on behalf of all the SSA UK members listed on the site without express permission. The Association firmly believes that if an aggregator is to become established in the UK self storage industry it must do so by providing operators with a value proposition for why they should be listed on their website and selling the service on its merits. Data-mining operators’ websites without their permission does not indicate that the aggregator is concerned about the industry, nor the operators, rather it is trying to use existing self storage companies’ good reputations to make profit from the industry. Having your business listed on these sites can be genuinely damaging to your business as customers may not realise you have not agreed to be listed there. So if they place an enquiry through the site and do not receive a response, or receive an automated response from the aggregator with incorrect information, then this customer has essentially had a bad experience of your business, even though you may not even know they attempted to contact you. This is another reason the Association encourages members to be vigilant in having their business details removed from these sites promptly.
The USA Experience
The only place in the world that has prominent aggregator sites in the self storage industry is the USA. Not surprisingly, given there are more self storage sites in the USA than the rest of the world combined. Initially there was quite a bit of support for these sites, the view being that it was a cheap way of getting leads. Some independent operators thought it was a good way of competing with the larger operators in the online space. As a result, a number of self storage aggregators entered the market and began making an impact on online searches. Now these aggregators have established their position on Google and other search engines, some operators feel they must list with these sites to maintain their online presence, even though they are not getting the value that they used to. The US market is somewhat split on this issue, with some operators continuing to support the aggregators claiming they are an efficient way to generate leads. Many others see them as making it harder for individual operators to occupy the online space, adding unnecessary costs to the industry and adding to the overall quantity of leads, but not the quality, hence driving conversions down. It also should be remembered that, in the USA self storage has a much higher awareness and understanding than in the UK. So most customers using aggregator websites understand the product, the differing levels of security and service and can therefore make a more educated decision when using a self storage aggregator site.