Stop Discounting Your Self-Storage Rates! Focus on These Winning Attractions Instead
|Copyright 2014 by Virgo Publishing.|
|Posted on: 08/03/2013|
By Bernard Fensterwald
To many if not all self-storage operators, “discounting” is a four-letter word. Agreeing to reduce your rent is about as pleasant as getting a root canal, yet it’s often seen as a necessary evil.
Why are discounts viewed so negatively? Because they hit directly at the bottom line—and not in a good way. Discounting immediately reduces a facility's economic occupancy. It's money lost that’s never recovered, and less income means lower facility value.
However, there’s an alternative to discounting. It involves simple, commonsense investments you can make in your facility that create a willingness in consumers to pay more rent because they believe it's worthwhile. This creates more income and higher facility value, too. Following is a brief discussion of these investments and how they enhance revenue. Many can be implemented with little or no cost to ownership. This is by no means a complete list, but food for thought.
First, the visibility of your facility is of utmost importance. You paid dearly for a decent location on a main thoroughfare, so make it work to your advantage. While the Internet continues to grow as a marketing tool, drive-by rentals are always a staple. To attract a drive-by customer, you must be visible from the street, and often. You should maintain good landscaping, but don't let it obscure potential customers' view of the site. Consider using bright colors to attract the eye. The use of flags is a good tool, too.
Cleanliness is an important counterpart to visibility, not only from the street, but inside and out. How often do you go to a restaurant or service station and find the restrooms dirty or messy, as if they haven’t been tended to for some time, or the trash bins are overflowing? Your reaction is probably that the owners don’t care enough about their business and customers to undertake routine maintenance. What does that say about their operation as a whole? Would you come away with enough trust to visit them again in the future? Maybe or maybe not.
The same is true with self-storage. An unclean and untidy facility doesn’t engender trust; it’s just the opposite. If the operator cares little about how the facility looks, the customers will question how much he will care about them.
Your Operating Duties
Related to the issue of cleanliness is the matter of organization. Are your processes and records well-maintained and organized so they make sense? Are they streamlined and convenient? An organized office saves time and money. Equally important, however, is the customer's sense that you’re at the top of your game.
With this in mind, be sure your facility always puts it best foot forward. Office, grounds, common areas and units should be well-maintained, clean and tidy. Establish a daily routine. Cleaning up after move-outs should be a priority. Create a re-painting and unit-maintenance schedule. Be sure your staff is neatly dressed and groomed. Your dumpster should not be allowed to overflow. Burned-out lights should be replaced.
In addition, review all your operating procedures regularly. Are they fair? Convenient? If not, make some changes.
Security: Real and Implied
Speaking of trust, an important issue to every customer is security. Not only should you use the most up-to-date security equipment, it must be maintained and in good working order. Remember, the perception of security is just as important to your customer in his decision to store with you as the actual security itself. You must show you care about your customers’ safety and that of their goods.
A good way to enhance your property is improved lighting. Not only does it improve security, it increases the customer's perception of security. This translates into a greater sense of trust.
Beyond security is the nature of the technology you use every day to market your services, manage your business and control your finances. By now, every self-storage operator surely uses a computer as an integral part of his operation. As we move farther into the 21st century, the question is how much more technology are you incorporating?
For example, is your staff still tethered to a desktop in the office when a customer comes to rent space, or have you equipped him with a tablet, allowing new tenants to see actual units at the site while the manager accompanies them with real-time rental information in their hands? Have you incorporated social media such as Facebook into your marketing efforts, or are you still limiting yourself to the Yellow Pages and waiting for the phone to ring? Have you incorporated smartphones into your daily operations to rent space and take payments?
Many of today's younger customers have grown up with the Internet and look at it as the indispensable tool for everyday living. They live with their smartphones and text rather than talk. They expect every merchant they deal with to be up to date with the same technology. Partly, this is a matter of coolness, but it may also makes sense to your daily operation.
One example is the manner in which you accept payments. Of course, you may accept credit or debit cards. But is the payment collected in the office at the desk or through the growing use of more mobile methods such as swiping a card on a smartphone? In the area of marketing, do you allow unit reservations to be made online? For many, especially people coming from a distance, this is a real convenience.
Actually, technology and coolness go hand in hand with a growing concern that younger customers have regarding the environment and the perceived threat of global warming. Going green is in! It can also reduce your operating expenses. For example, installing LED lighting can enhance your "greenness" and reduce your electric bill at the same time. Flat roofs in sunny climates may be candidates for solar panels. Of course, the cost to install certain technologies may be daunting, but you will reap benefits over the long term.
Your knowledge and that of your staff is an important consideration. Do you thoroughly understand your business? Do you understand your community? Do you have a consistent policy of continuing to educate employees? Do you insist they reach out and talk with local residents and businesses to assess their needs? Customers put their faith in you when storing their possessions. This trust implies they feel you know what you’re doing at all times. Knowing your business and the desires of your customers allows you to offer the best service you can.
Ancillary to knowledge is your ability to make it visible to your customer base and as a part of your local marketing campaign. Use the wisdom you’ve gained to become a local expert on all things regarding storage and related businesses, such as moving, records storage and truck rentals. Experts create trust and attract business.
The knowledge of your staff brings up an additional consideration: friendliness and fairness. Do you and your employees always maintain a positive attitude when dealing with customers? Even if a tenant is being difficult? If you make an error in dealing with a customer (such as quoting the wrong rental rate, for example), do you honor the mistake even if the result is not in your favor?
There’s an old marketing adage that a satisfied customer will refer you to three future customers, while a dissatisfied customer will tell 10 people your business is no good. There’s no faster way to create negative feelings about your business than to be perceived as being negative or unfair to customers. There are plenty of alternatives.
Another aspect of fairness involves your rental agreement. A well-drafted lease is essential to your business, but is it fair? Can your staff and customers understand it? One way to accomplish this is to rewrite it in plain language and reduce the "legalese" it contains. A complete understanding of the terms of the agreement by all parties leads to fewer disputes.
Think about your customers’ needs. Is your facility well-located? Are your hours of operation convenient? Can customers easily load and unload their goods? Do you provide equipment such as carts and dollies to help them? How about your entry procedure—does it provide security without being too burdensome? Are the facility rules and regulations easy to understand and reasonable?
Have you installed a kiosk that allows customers to rent units and make payments around the clock? People may view renting a storage unit as an inconvenient necessity; you should make their experience as simple as possible.
Providing a variety of unit sizes is another element of convenience. Customers should have the chance to rent the amount of space needed rather than too much or too little. Similarly, offering a variety of products and services is important, too. Do you offer truck rentals and moving supplies? Do you accept deliveries? Do you provide storage for special needs, such as records storage and wine storage?
Another such amenity is climate control. It’s often unwise for customers in certain regions or with certain specific goods to store them where it’s too humid or temperatures are extreme. Of course, installing climate control can be expensive and will incur higher operating expenses; but it also supports higher rents and will attract customers you might lose if you don't offer it.
In a similar vein, have you developed synergies with related businesses that can offer convenience to your customers? A good example might be maintaining a list of trusted moving companies you can recommend. Do you reach out to local landlords to help approach future prospects? How about local retailers who may need extra space periodically and may able to help your customers solve their problems?
This is just a short list of possible ways you can improve your facility and revenue. Implementing some of these strategies can hopefully help you avoid the need to discount your rates to attract business. Making investments in cleanliness, security, convenience and the environment will really pay off down the road.
Bernard Fensterwald is a consulting attorney with more than 25 years of experience. He’s licensed in Maryland, Virginia and the District of Columbia. He's also a principal in U-Store Management Corp., a Washington, D.C.-based self-storage company, and a past president of the Washington Area Self-Storage Association. To reach him, e-mail email@example.com; visit www.global-self-storage.com. To read his blog, visit www.fensterwald.wordpress.com .