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8th March 2012, 12:56 PM #1
Calculate Average Length of Stay?
How do you calculate average length of stay? How does your software calculate average length of stay?
Which method do you use and why?
I found this poll thread and the post by JAMiAM made a lot of sense.
Anthony D. Morrow
http://www.StorageSolutionsCA.com/
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8th March 2012, 02:22 PM #2
Re: Calculate Average Length of Stay?
Though it's no longer officially supported, we still use RentPlus 2.0. It calculates the average length of stay for all current and former customers, by counting tallying how many contracts had a length of stay for N months, where N = {0,1,2,...,n}. Then each of these monthly contract length of stay totals is multiplied by the number of months, and added together. Finally, this number is then divided by the total number of contracts. This will give an average length of stay for all currently existing customers, as well as those who've moved out.
To get the average length of stay for only current customers, you need to have a means of filtering the contracts that are tallied for each of the n months. Unfortunately, that isn't an option with RentPlus 2.0.
The math isn't that difficult, but could be tedious with a large customer base. Below is an example, albeit of a rather small sample.
Let's say you've got the following:
You've been in business for 20 months. You've got 100 customers.
5 customers have been there less than one month, or zero months.
0 customers have been there at least one month, but less than two.
10 customers have been there at least two months, but less than three.
5 customers have been there at least three months, but less than four.
0 customers have been there at least four months, but less than five.
7 customers have been there at least five months, but less than six.
3 customers have been there at least six months, but less than seven.
Then, for each of the remaining 14 months (N = {7,8,9,...,19,20), exactly 5 customers have been there for that number of months.
You need to multiply the number of customers by the value of the month, then add these together. So,
(5*0)+(0*1)+(10*2)+(5*3)+(0*4)+(7*5)+(3*6)+[(5*7)+(5*8)+(5*9)+...+(5*19)+(5*20)].
I won't go into the math, but note that the total of the numbers between the [ and ] brackets are given by 5*7*27, or 945, so the above is simplified to 0+0+20+15+0+35+18+945 = 1033. We then divide by the number of customers (100), to get the average of 1033/100 = 10.33 months as the average stay.
Now, it should be noted that this made up example shows a relatively constant number for the length of stay of your customers over each of the 20 months that you've been in business. This results in an average length of stay that is very close to the midpoint of the number of months that your facility has been in business. This is generally NOT the case, as with longer time periods, the numbers usually drop off substantially, the farther out you go. This has the effect of shifting the average lower than the midpoint.
Anyhow, I could go on and on about this stuff, and bore you all to tears, but with the tools that RentPlus has, I can let the program calculate the average length of stay for all customers, past and current, who have had contracts with us, back to the date where we imported the data from MSP (MiniStoragePlus), in April of 2004. Our average length of stay over all these 2778 contracts was 41.7 months, or just about 3.475 years per contract.

8th March 2012, 02:58 PM #3
Re: Calculate Average Length of Stay?
I'd calculate both. Then you can compare your historical overall numbers with your current trends.
If you upgraded your software it may only be calculating length of stay since IT was implemented and not necessarily since the entire history of your site.
Some software does it automatically in a compiled report.
For current customers. Take all your customers days rented and add them all together. Divide the total days rented by your current units rented. That will be our average length of stay. Obviously this number cannot be higher than the days you've been in business.
You should then also calculate the average value of each customer by totalling up the revenue from all those customers since they rented and dividing it by the total units rented to date.
Most software packages either do this or have the data listed out.
I hope that helps

8th March 2012, 03:12 PM #4Senior Member
 Join Date
 Dec 2007
 Location
 Winchester, Virginia
 Posts
 1,348
Re: Calculate Average Length of Stay?
Madman:
I have always used the total days rented formula that you described. I also feel that JAMiAM methodology is also valid.
Storagesolutionsca, if your software will let you export out an Excel spreadsheet with the initial rental date data (keeping in mind what JAMiAM said about the IT startup date) and the unit number, you would be good to go. A simple Excel function formula can give you days to date for each current customer. If you cross reference the unit number with the corresponding size information, you can develop a data stream of average length of stay by unit size and type (if you have standard and temperature controlled units).
MisterJim444
PS JAMiAM  Your 3.475 years per contract is an outstanding length of stay result. Your customers must appreciate the quality of customer service they are getting as well as your facility maintenance. A result like that doesn't happen by accident.Learning Never Ends, But Will Time?
That's great Advantage IT! I've heard many people...
How often do you do Rate Increases?