Self-storage managers are always focused on renting units and collecting money due. But have you ever taken a hard look at what else you can do to drive revenue at your facility?
One great avenue is profit centers. Offering ancillary products and services can certainly bring in new customers and help you make money—but only if you sell them! Let’s look at a few popular add-ons for self-storage operations and how you can weave them into your sales presentation. With some effort and skill, you can close more deals on these offerings and positively impact your company’s bottom line, which is good for you and the business.
We’re often so focused on getting the self-storage rental that we fail to take advantage of a huge opportunity to generate revenue: selling retail products like boxes, locks and other packing supplies! The right sales tactics can get the average renter to purchase more. Think for a moment about how this might play out.
Manager: We can definitely help you with your storage needs and, by the way, have you started packing your things yet?
Customer: I’m just looking for a storage unit right now.
Manager: OK. Just to let you know, we have a full line of moving and packing supplies right here in the office as well as helpful packing tips so we can make your life easier.
Does your new tenant need a lock or at least one box? The answer is “yes” 90 percent of the time. How often does a customer show up on move-in day without a lock? Often. Solve that problem ahead of time by making a lock purchase part of your lease presentation. You can say, “We offer two different locks here. Which would you prefer?” Always assume the sale.
Another simple way to sell locks is to carry a contractor clipboard with locks inside when you give facility tours. When showing a unit, open the clipboard and ask the customer which lock he’d like. Don’t ask if he wants one. Again, assume the sale.
How many of your customers are professional packers? Probably not many. Have you ever had to lay on the ground and reach under a partially closed unit door to move boxes that fell against it because they were poorly packed? By teaching tenants how to keep boxes full and steady using peanuts or bubble wrap, you’ll make a sale and provide them with a solution.
Have you ever moved a dresser or hutch and had a drawer slide out and hit you? Well, if you teach customers how to use shrink wrap to secure drawers and cabinet doors, you can spare them those headaches. Remember, you’re the storage professional. Use your experience to guide the customer in his decision-making and sell more product.
It’s important to note that a successful retail program starts with a full, clean showroom. No matter what size office you have, you can create an effective display area. Interact with the customer where the items are and always ask open-ended questions. Instead of asking if he would like to buy some boxes, ask, “How many boxes do you need?” Perhaps offer a discounted bundle or kit. Instead of asking if he wants a mattress cover, which gives him the opportunity to decline, say, “What size mattress do you have? I want to make sure I help you find the right cover.”
Let’s do some math. Assume you average 40 self-storage rentals per month. You sell locks at $12 each and have a 90 percent lock-sale penetration rate. That equates to $432 per month, or $5,184 per year. Now, what if you could sell a few boxes and increase your per-tenant retail sales to $27? You’d now have gross sales of $1,080 per month, or $12,960 per year in added revenue.
Tenant Insurance and Protection Plans
As a manager, one of your main efforts is to take care of customers’ needs. If you aren’t offering them a tenant-insurance or tenant-protection plan, you’re not really doing what’s best for you, the customer or the store. Remember, these programs are designed to protect your tenant as much as if not more than the business.
I know a lot of you are saying, “My customer won’t buy it.” One of my mom’s favorite sayings was, “It’s not what you say, it’s how you say it!” You must be confident and positive in your sales approach. Try something like, “Mr. Customer, that 10-by-10 storage unit is $100 per month, plus we do require all our units to be insured. We recommend the $3,000 policy for $13 per month.”
Keep going with the rental process. Don’t stop and don’t hesitate. If he asks about using his homeowner’s insurance or finding a cheaper policy, by all means be honest. Here are some ways to handle objections:
If he mentions a homeowner’s policy: You need to check with your provider to ensure it covers a detached dwelling. If it does, great. You just need to provide us a copy of the declarations page. Tell you what, let’s add the [insurance or protection plan] to your rental now so you’re covered per the lease; and as soon as you get me the information, we can remove it.
Also, remember, your homeowner’s policy carries a deductible. Our coverage doesn’t. If you ever need to file a claim on your homeowner’s policy, it might cause your premium to go up, too. Our coverage doesn’t have that impact.
If he asks about a cheaper option: We do have a base-model program for $2,000 worth of coverage for $9 per month. Will that work for you?
Even in this worst-case scenario, you’ve secured an insurance policy for the customer. This is why we start at the mid-level offer: If the tenant squawks about price, you have a step-down option. If you start with the lowest one, where can you go? You may be out of a sale.
I can tell you from experience, this approach works. When you take consider the commission a self-storage facility can earn by offering these programs, it goes right to the bottom line. Plus, there’s peace of mind in the event of a disaster.
Truck rentals are another great source of self-storage income. Think of all the people who rent a unit and need a truck to move their stuff. Your facility can earn 18 to 23 percent commission on every transaction! Plus, trucks bring in more foot traffic, which means more opportunities to rent storage units and sell moving and packing supplies. Finally, it adds another level of activity to your site. People can tell there’s more going on there than just storage.
So, you know truck rentals are a great revenue generator, but how do you sell them? Make sure all prospects and tenants know the following from your sales presentation:
- Your facility is a one-stop-shop for storage, boxes and truck rentals.
- It’ll be cheaper for them to rent a truck from you than to hire professional movers.
- The truck is picked up and returned right at your facility, so there’s no need for another stop.
- Truck size matters, and you can help them choose the best fit for their needs.
If your facility offers online booking of truck rentals, make sure they know that, too!
Skill and Effort
Many self-storage facilities offer these popular products and services, but not all are successful at making them profitable. Just like renting units, it takes skill and effort to sell things like retail merchandise, tenant insurance and protection plans, and truck rentals. Follow the above advice, focus on ancillaries during your sales presentation, close more add-on deals, and increase the bottom line!
Jim Mooney Jr. is vice president of operations for Freedom Storage Management. He leverages his 20 years of storage experience to improve the performance of the company’s portfolio of Pennsylvania properties. He was formerly a vice president for Devon Self Storage, where he held various positions. He serves on the Pennsylvania Self Storage Association Board of Directors and has been a speaker at numerous industry events. For more information, call 717.767.2735; e-mail [email protected]; visit www.freedomstoragemanagement.com.