Revenue Management – Step 3: Rate increases

revenue management Feb 14, 2018

Few things worry a self storage owner more than rate increases. You worked so hard to get the tenants to sign the lease and move their stuff into your facility, and now you are worried that there will be mass exodus the second the rate increases hit their mailboxes. Did you know that most rate increases only yield a 1% move-out?

Most owners worry about the mass exodus that never happens, and while they are worrying, they aren’t increasing rates, which means they’re losing money. How much money can you afford to lose before you finally decide to increase rates?

Here are some tips if you are ready to increase your rates.

  1. Make a list

Most storage programs have automatic rate increases, which allows you to set a certain level of increase each month and not worry about it. Everything that I have ever read on rate increases preaches a standard increase across the board, no matter who the tenant is. I see the value in this recommendation because it removes the personal...

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Revenue Management - Step 2: Prospect Management

revenue management Feb 14, 2018

Revenue Management – Step 2: Prospect Management

Prospect Management involves pricing the customer along with the storage unit. This takes a great deal of salesmanship and may not be easy for all managers to accomplish, but if you can do it right, you can add a lot of money to your bottom line. To begin understanding prospect management, you need to answer the following questions:

Who – Who is the prospect?

Is the prospect a businessman who has a company account and can handle a higher price? Is he a college student on a budget?

When – When will they begin storing items, and how long will they stay? If the prospect is starting right away, urgency is high and she may tolerate a higher price. If she isn’t starting for 3 months, she may have some time to price shop and would be less likely to pay a premium.

What – What will they be storing? Is he storing Grandma’s antiques, and you have the only climate-controlled facility with great security?...

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Revenue Management - Step 1: Renting units for what they're worth

revenue management Feb 14, 2018

Revenue management is not just sending out rate increase letters when your bank account gets low.

Revenue management is the process of getting every dollar out of your storage facility that the market will allow. It’s an overall strategy of effectively managing potential and actual revenue to maximize return, encompassing competition review, market analysis, pricing, facility assessment, and staff participation.

The first step in proper revenue management is renting your storage units for what they are worth when the tenant first moves in. The price of each unit depends on availability of that size, demand for your units, urgency of the rental, and method of rental. Regarding method of rental, there are three touch points where customers will experience your facility before they become a tenant.

  1. Website

Most people will go online to check out your facility before they stop by or call. If you don’t have a website, get one. If you have a website, you have to decide...

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Top 4 Self Storage Unit Pricing Mistakes You Must Avoid

revenue management Jul 21, 2017

How much should I charge for my self storage units?

This is a question that I get asked most often. Even once owners settle on their self storage unit pricing, they still need to increase rates on a regular basis. I have been helping owners set self storage rates and raise self storage rates for years and here are the top 4 mistakes that I see when it comes to pricing self storage units.  

Mistake 1: Keeping Up with the "Joneses"

When I discuss self storage unit pricing with most storage owners, they talk about price shopping their competition and little else. If you are just keeping up with your competition and not digging into the supply, demand, customer needs and other data, you are losing money.

Owners that are followers look over at their neighbor and price the same way that he does. You aren't a follower. You are a leader in the industry. You want to gather information and run your business the best way that you can. Do better than just keeping up with the Joneses!...

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10 Steps to Price Self Storage Units with Confidence

revenue management May 07, 2017

Pricing your self storage units is both an art and a science.  I like to use a 10 step approach when teaching people how to price with confidence. Once you master the steps, you will easily make more money with your storage units and increase the value of the property. If you are still calling the competition and matching rates,  you may be leaving money on the table.  Going through all the steps will position you to dominate your market and give you the confidence you need when you set street rates and raise rates on current customers.  Sleep easy at night knowing you are doing everything possible to make your self storage business a Perfect 10.

Step 1:  Prepare yourself

If you are you mentally ready to raise rates, you will not have success.  Attitudes show up in numbers and owners who believe that raising rates will cause them to lose business will see lower numbers.  Taking the time to listen to the stories that you are telling yourself will...

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