So you have a new self storage facility opening close to your facility.
Should you panic?
Never panic. Just take action.
A lot depends on where you are in your facility. Are you stabilized or are you leasing up?
If you are in lease up, a new facility, especially if it is a REIT, can impact the velocity of your lease up.
I am not a fan of racing to the bottom in terms of price, but you will most likely have to get more aggressive in your offers and pricing.
On-Line Presence
This is where having a good internet marketing strategy can help a lot. If you show up everywhere and are one of the first self storage facilities seen on various searches on Google, you have a leg up.
Pay per click and Facebook adds help a lot here. Offer coupons, specials, deal with a limited time on them. Change them up each month or so. You could be competing with first month free, so create something enticing that does not give away your first year’s income.
If you are stabilized, you may be effected some depending on how aggressive your competition is, but don’t panic. I have never seen a facility go from 90% to 65% or anything like that. It may have happened to someone, I just have never met them.
You could go from 90% to 85% or something, so again, have a strong internet presence and whatever your strengths are, market them.
One of my partners has the “Four Walls Theory”. He tells the managers, we will worry about the competition and what specials and adds we should do. You just make sure what goes on in these four walls is the best customer experience anyone will get in the self storage industry.
Know The Competition
Another thing we do is mystery shop them. Call on someone’s cell phone and see what they are offering. How good are they? Did anyone follow up with you? Were they good?
Know your competition.
I actually go and rent a unit there for a while so I can walk through. See how fast they appear to be renting up.
Make sure your Managers go and meet their Managers. Having a good relationship between Managers can go a long way. I am amazed at how much information some facility managers will tell us.
Often they tell us their occupancy, how they are doing, what specials they are running. Most of the time they will never ask our managers the same questions.
Show Up In Your Community
It is also important to have presence in whatever community your facility is in. We have our Managers join the business associations for that part of the market. They host events in our facilities and become an intricate part of that area’s business community.
When the business owners of the area think of storage, it is us, period.
Just like getting to know your competition, this is best done by the Managers themselves rather than you as the Owner (unless you don’t have Managers). They are the face of your business, so let the community get to know and relate to the face.
Action Steps
So to summarize, as more square feet enter your market, and they will, the number one rule…Don’t panic (or if you do, limit it to 10 minutes, then proceed below).
- Have a strong, strategic, internet presence and strategy.
- Know your competition.
- Have your Managers establish relationships with the Managers of your competition (by using the strategy we will send customers we cannot fulfill with our inventory to you and hopefully visa versa).
- Show up in your area by joining business originations and hosting events.
If you go back to the basics, you will survive any temporary downturn in the market create by excess supply.
If you are not experiencing it now, odds are you will. That is why it is so important to take the above actions no matter what your occupancy is. What goes up, must come down.
That works for the stock market, balloons, water levels, and self storage occupancy rates.
the wave of 95% stabilized occupancy where you can not raise rates fast enough is great while it last. Just don’t design your business model around that, because it will not last.
Start now to get the basics right. Then you are ready for action no matter what the self storage market throws at you.
