By Randy Smith
How’s business in your neck of the woods? Hasn’t been so great, you say? Well, let me throw out a controversial statement: Business would be a whole lot better if you started creating demand for self-storage. Here’s my contrarian view on how to increase your occupancy and revenue in any economy, especially this one.
At Another Closet Self-Storage in Texas, our business is doing great and getting better every day. How? Our approach to marketing is all about “creating demand” for self-storage.
Another Closet owns and operates multiple locations in South Texas, totaling more than 612,000 net rentable square feet, with plans to add another 150,000 square feet in the next six to 18 months. I believe that by hiring great people, providing excellent training and employing several unique marketing strategies in our market, we’ve been able to create demand for self-storage and prosper, even in this economy.
Some quick stats: The last quarter of 2008 was our best of that year. Gross revenue in 2009 was up 18.6 percent over 2008. Actual revenue for 2010 is up 15 percent over 2009 at properties with stabilized occupancy. Occupancy and rents are up at all locations. Our newest location, a 54,000-square-foot facility, is 40 percent occupied in just 75 days from the grand opening. But we’re in no bubble. We’re experiencing the recession like everyone else, except we’re not participating!
Determining the Need for Storage
If you’ve been in the self-storage business for more than 10 minutes, you’ve probably someone say, “You can’t create demand for self-storage. People either need it or they don’t.” Erase that belief from your mind! That mentality has cost the self-storage industry billions of dollars over the last 20 or so years.
The problem with the “they need it or they don’t” philosophy is who’s determining the need. With this mindset, the customer determines the need and the self-storage operator waits around until the customer figures it out. That approach is like taking your boat into the middle of the lake and waiting for fish to jump into it.
Another problem with this frame of mind is the word “need” means different things to different people. It’s a nebulous term you can’t pin down. You have people renting from you right now who don’t need storage. Some of your customers renting 5-by-10 units are homeowners with garages. They don’t really need the unit because they already have enough space. The issue is whether they want to cram all that stuff in their home and garage.
I’ve heard some industry experts say, “No one gets into their car, drives down to Self-Storage Avenue and just rents a unit on a whim.” True, but just because self-storage isn’t an impulse purchase doesn’t mean you can’t create demand for it. Others have compared the self-storage business to the funeral-home industry: People don’t come see us until they need us, but when they do, they usually need us pretty badly.
Let’s not just wait for customers to show up due to an obvious and pressing need. Let’s educate them about 101 great reasons why they need a storage unit now.