The following is part of an exciting 2013 content series entitled "What Would You Do?" ISS asked managers and owners how they would react in difficult situations that can arise at any facility. We then asked experts to advise on their recommended course of action. To see all articles and slideshows in the series, enter code WWYD13 in the search box at insideselfstorage.com. The complete sequence will roll out over several weeks and be available in full by March 10, 2013.
How a self-storage operator manages his money has a huge impact on the success of his business. Rental rates, discounts, collections and expenses are all key components of the equation, but they're not always simple to control. You've got to consider your competition, your long-term goals and, of course, the needs and wants of your customer base.
When delicate money-related issues arise, do you know what to do? Is what you would do the same as what you should do?
Inside Self-Storage got the inside scoop from professionals in the field to learn how they would proceed in specific but common situations to preserve income and generate even more revenue. They were asked "What Would You Do If ...?"
- A customer asked you for a discount?
- You had to execute a rent increase?
- A tenant told you he couldn’t pay rent because of some hardship?
- You found money in a storage unit?
The answers were provided by members of Self-Storage Talk, the industry's largest online community. We then asked professionals from self-storage management companies to tell us what operators should do in each case. Our well-known experts are Linnea Appleby, president of Lime Tree Management in Sarasota, Fla.; Anne Ballard, president of training, marketing and developmental services for Universal Storage Group in Smyrna, Ga.; and Kevin Bledsoe, district manager for Storage Asset Management in York, Pa.
What would you do if a customer asked you for a discount?
Most respondents agree it depends on the situation and what—if any—discounts the facility may be offering at the time. “I offer a variety of discounts, some seasonal, some just as a courtesy,” says an anonymous manager in Oklahoma. For example, this might include a discount for military, a one-time student discount or "second month free" special during the slow season. “The more full I am, the easier it is to raise prices down the road,” he says.
Gina Six Kudo (Gina6k), an SST moderator and general manager for Cochrane Road Self Storage in Morgan Hill, Calif., agrees giving a discount depends on the circumstance. “If they are asking us to match prices, we do not. If it is for a senior or military-type discount, we'll take care of them on a case-by-case basis.”
SST member StrongTeam, on the other hand, sticks to a new-customer special. “We only have one new-customer special and that is all we can do. It is not an option to give a discount.”
What SHOULD you do?
Appleby: Politely explain why you are worth full price.
Bledsoe: Customers ask for discounts for many different reasons. Sometimes it’s because they’ve rented with us for a long period of time or they have multiple units and want a quantity discount. We try to work with every tenant to find out why they’re asking for the discount and we resolve each request differently. Our managers work closely with their district managers to manage rates and resolve discount requests on a case-by-case basis.
What would you do if you had to execute a rent increase?
Rent increases “are part of the business,” says the Oklahoma manager, who previously worked for a company that was afraid to regularly raise rates, but now works for one that handles them “sensibly” by basing them on occupancy trends for particular unit sizes. “As utilities rise, taxes raise, and other expenditures that we have to make go up. It's only fair that we ask for an extra $5 from a couple hundred people to help us keep up with the raising costs and continue to provide the customer with a superior storage product,” he adds.