Do you have additional amenities? For example, for an extra $5 or $10 per month, can a customer have access to a conference room, snacks, a discount on packing supplies, etc.? This additional revenue can add up quickly.
Do you offer different prices online vs. in the office? People who are shopping online typically have more of a price focus. If a customer walks into your office, he typically needs a storage unit right now. A self-storage facility is not a sports bar; no one walks into one to “hang out.” If a potential customer wants to rent a unit, then consider upselling. If your typical 10-by-10 is $100 and you offer a one-month-free special, consider starting the pricing at $110 without a special. “Sell” your facility!
Remember, there’s nothing unethical or wrong in adjusting your pricing. This is part of the self-storage business model. We must maximize our revenue to battle rising expenses and keep our properties competitive.
One of the most common reasons facility managers don’t want to raise rates is they believe there will be a huge backlash from customers. This doesn’t typically happen. Yes, you’ll have a couple of customers who’ll be vocal, and you can handle them on a case-by-case basis. Most of our customers don’t know each other, nor do they have any idea how units are priced. There isn’t a secret meeting of the XYZ Self-Storage Club. It just doesn’t happen. Consider how often you purchase something that can vary in price—hotel rooms, airline tickets, sporting events, concerts and rental cars. This happens every day; it’s just a part of business.
The benefits of revenue management are easy to see and calculate. If you implement just some of these strategies, you’ll see a direct impact on your revenue almost immediately, and most of it will flow right to your NOI. Our continued success is based on managing our revenue as well as we manage our expenses.
Matthew Van Horn is vice president of Cutting Edge Self-Storage Management , a full-service management company specializing in management, feasibility studies, consulting and joint ventures within the self-storage industry. He’s also president of 3-Mile Domination, a full-service self-storage marketing and strategy company. For more information, visit www.cuttingedgeselfstorage.com and www.3miledomination.com, where you can download the company’s free e-book.