Customer Referrals and Tenant Retention Put Self-Storage Occupancy Numbers Back in the Black
|Copyright 2014 by Virgo Publishing.|
|Posted on: 08/27/2010|
By Jeffrey B. Turnbull
We all know the economy has made things very difficult for most of us in the self-storage industry. The problem, simply put, is supply exceeds demand. The solution, however, is more complex. While you likely can’t do anything about the supply of self-storage in your market, you can focus on the latter. A few simple marketing techniques can put your self-storage business ahead of the rest, and perhaps give you new opportunities when overall demand levels return.
Asking current or past tenants for referrals is probably the best way to increase occupancy and cash flow. It may generate as much as a 5 percent bump over the course of a year, even in these difficult times. What tenant wouldn’t want a few extra bucks for referring a friend, one who needs your service anyway?
If you don’t have a referral program in place, make one! Create a coupon that gives a referring person $25 for each new tenant who rents a unit from you. Give these coupons to existing and former tenants. Also, distribute them to your top business “drivers” including apartment managers and real estate agents. These referral programs should be consistently marketed on a monthly basis. They work and will help drive business to your facility and boost your occupancy. Best of all, a referral program is easy to implement, and the cost is tied solely to newly rented self-storage units.
The work doesn’t end once the tenant signs the contract. You must consistently be at the top of your game to retain that customer. In addition, your tenants’ needs will often change as the months fly by. They may no longer feel they need self-storage, or could be facing a financial issue that makes affording their unit difficult. Rather than lose paying tenants, try to find a solution so they’ll stay.
Instead of seeing a move-out as lost occupancy and revenue, look at it as an opportunity to better meet your tenants’ needs. When a tenant tells you he’s vacating, find out why. Perhaps the unit is too large. If so, suggest he move into a smaller one. Some renters may suddenly find they need a climate-controlled unit. Maybe a customer wants a unit closer to the gate or directly under a light. Is a competitor offering a significantly better deal you can match?
More often than not, you have a good shot at retaining some of these potential move-outs if you understand their motives for vacating. You might need to renegotiate the rental rate for a short time to keep that tenant, but it can be well worth it on the long run. You can’t stop every customer from leaving, of course, but you can retain a small portion of your move-outs by simply finding out how you can meet customers’ changing needs. This can help you retain at least 7 percent of potential move-outs.
If you can gain 5 percent in referral occupancy and keep another 7 percent in retained occupancy, you’re occupancy will be 12 percent higher. This additional occupancy and income stream can put your facility ahead of your competition and position your business to take advantage of new opportunities as the broader overall economy improves.
Jeffrey B. Turnbull is president of Kodiak Mini Storage in Charlotte, N.C. He’s a licensed attorney and real estate broker in North and South Carolina. He’s also a founding board member and past president of the North Carolina Self Storage Association. To contact him, e-mail email@example.com.