The Self-Storage Discount: Friend or Foe?
|Copyright 2014 by Virgo Publishing.|
|Posted on: 11/21/2012|
By Amy Campbell
It’s that time of year again. Busy malls and parking lots, the sweet sounds of registers spewing receipts, customers saddled with more bags they can carry. It’s the holiday season. And everyone is looking for a good bargain.
Sales can work wonders for retailers, but it’s a not as black and white for self-storage operators. While discounting has been the go-to sales strategy for the past couple of years, times are changing. Operators are beginning to realize rental specials are great to bring people in the door, but may be detrimental to a self-storage business in the long term.
In a thread on the Self-Storage Talk forum, I asked operators to sound off on discounting. In addition to asking if and what kind of discounts their facility offers, I also asked if their method is successful for long-term growth. Read what SST members have to say, then add your own thoughts.
While each facility’s discount strategy and success will vary, there are some factors operators should consider before slashing rental rates. First, take a hard look at what’s going on in your market. What are the street rates in your three-mile radius? Are you on line with them, higher or lower?
However, even if every one of your competitor’s is offering a discount, you may not need to to stay competitive. Consider what you can offer that the facility down the street cannot. Do you have bigger units available? Or smaller? Perhaps you offer wine storage, or a truck tenants can use for free when they move in.
A great special doesn’t always have to be monetary, either. Consider creating a “move-in” retail package that includes a few boxes, packing tape and a lock. Give it to every customer who signs a three-month lease. Convenience often trumps price. If not, we wouldn’t have a Circle K on nearly every corner. Who pays nearly $4 for a gallon of milk? Oh yeah, the guy who stops at a Seven 11 on the way home.
For more factors to consider before you jump on the discount train—or attempt to jump off it, for that matter—read these great articles from the ISS archives.
Does your facility offer a move-in discount? Share your thoughts by posting a comment below or in this SST thread. You can also give us feedback in the ISS poll. This week’s question is:
Do you feel specials and discounts are necessary to maintain or improve your facility occupancy? You’ll find the poll at www.insideselfstorage.com on the right side of the page.