By Pearl Pugh
We’ve all heard the familiar phrase “quality over quantity,” but rarely do we associate this with our self-storage customers. After all, reaching peak occupancy is our No. 1 goal as facility operators, and we should be focused on closing every sale possible, no matter what we have to do to get there. Or should we?
What good is a high occupancy rate if the delinquency rate is high as well? Or if revenue hasn’t increased? These two questions have lingered in my mind for years as I’ve watched storage owners and management companies scramble for—and even demand—higher occupancy rates, no matter the cost.
On the flip side, I’ve also witnessed storage companies avoid this pitfall, find success and flourish. When we put quality over quantity, it becomes evident to customers and, as a result, attracts more long-term, loyal tenants.
A Tale of Two Businesses
A few years ago, I was working for a storage company where occupancy rate was not a top priority. Instead, we focused on overall income, curb appeal, customer retention, return business and clever marketing. In lieu of renting to customers who would never pay more than the move-in special and end up costing time and money to auction, I had more time to collect past-due rents and maintain a truly lovely facility. Not surprisingly, the company remains very successful. Its occupancy grew organically without having to sacrifice quality in the process.
In contrast, I later worked for a storage company where the top priority was occupancy rate. Nothing else seemed to matter, and it showed. Trees and shrubs were allowed to overgrow the keypad area so customers complained. Mechanical doors went unserviced for so long that some tenants vacated. When I inquired about these issues, I was told the landscaping and maintenance dollars were reallocated to advertising because the occupancy rate was a concern. That company struggled to stay afloat and is now no longer in business.
Occupancy as an Indicator
While this may be an extreme case of misdirected efforts, the practice of getting to full occupancy any way possible is a common one in our industry. Clearly, occupancy is what we are after; no one wants empty spaces. But my point is this cannot be forced. Occupancy must be pruned and maintained. Occupancy growth is the result of doing everything else right. If occupancy is failing, it’s an indication that an underlying issue is present. Think of occupancy rate as the thermometer by which we check the temperature of a facility.
Not every customer is good for business. This is the reason you’ll sometimes see a “We reserve the right to refuse service to anyone” sign in many restaurants and other establishments. It’s an unfortunate part of society that some people cannot be trusted, but it also shouldn’t be ignored. Unsavory characters can be a top driving force in losing prospective customers who would otherwise be self-storage tenants.
A great way to pre-screen customers is by offering specials that are spread over a two- or three-month period rather than promoting a $1 move-in special. While a $1 move-in might get you rentals, it may also lure tenants who are more work and expense than they’re worth. In contrast, someone who plans ahead enough to calculate his expenses is already one step in the right direction as far as renting a storage unit is concerned. This is the type of tenant who brings a little peace of mind because he truly does plan on paying you on a regular basis.
Another way to avoid problem tenants is to trust your instincts. If someone seems like he is up to no good, acts a bit sketchy, chain smokes, reeks of alcohol or drugs, or is excessively loud and obnoxious, etc., it might be a good idea to pass on his business. If you wouldn’t trust to store your belongings next to this person, chances are your tenants won’t either.
The quality of occupancy at a self-storage facility should matter far more than the percentage rate. In the end, better tenants equal better business.
Pearl Pugh is facility manager at San Jacinto Storage in San Jacinto, Calif. Since 2001, she has worked for multiple companies as a relief manager, assistant manager, facility manager, district learning specialist, senior store manager and district manager in training. In her spare time, Pearl is an avid crocheter.