Vertical Case Study: G5 Focuses on Self-Storage Companies

Do you really need to have raised millions of dollars to succeed in selling search solutions to small businesses? It is a question that I often ask myself.

Dan Hobin’s G5 Search Marketing in Bend, Ore., is profitable without having raised outside money. Hobin’s secret is initially focusing the five-year old, 17-person company on a specific vertical category: self-storage

Hobin’s brother is in the self-storage business in Southern California. Consequently, Hobin, a veteran of numerous dot-com start-ups such as CyberSource and Beyond.com, knew enough about their needs to try to transition their large marketing budgets to search. These companies typically take out full-page ads in Yellow Pages, and spend $1,500 to $2,000 per month on the Yellow Pages programs, he says.

G5’s search solutions typically run $300 to $500 per month. The money provides a full range of search engine optimization and search engine marketing programs, trackable coupons, dedicated call tracking via VoiceStar, and graphically rich reporting tools. The combination of SEM and SEO is critical, says Hobin. Other companies have focused too much on SEM and miss entire groups of customers.

Currently, G5 serves 30 self-storage companies with over 600 locations. These companies recognize that search is far cheaper than Yellow Pages, says Hobin.  With G5, Hobin estimates that they’re spending $5 to $20 per lead, or $30 to $50 per self storage rental. With Yellow Pages, Hobin estimates it is $150 to $200 per lead, or $300 to $400 per rental. Yellow Pages shouldn’t be abandoned, but other kinds of marketing should be added, he believes.

A typical client profile shows that search efforts lead mostly to phone calls. Sixty percent of users make a call, 20 percent want to use a coupon, and 10 percent seek a price quote.G5 provides search solutions on a wide range of services. But most of the action is with “the Big 4,” Hobin notes: Google, Yahoo!, AOL and MSN. The IYPs and classified service providers, meanwhile, are all described as “second tier.” “If you are an IYP, the only way you get traffic is if you are listed on Google.”

G5 is also doing some advertising on Facebook. It is a good way to reach college students, who tend to be very big users of storage facilities. But it is also very seasonal, based mostly on school semesters. Texting quotes on demand is also popular with college students.

Currently, G5 is adding a set of new verticals to its initial focus on self-storage. The criteria are that categories are dominated by companies with multiple locations — ideally 20 or more. It has already added a focus on apartments. Assisted-living facilities will be next. “The key is they have a high lifetime value, and that we can manage their transition” to online, he says.