We talk a lot about creating new income cash flow streams in the self storage business.
Mailboxes, selling propane, ATMs, record storage, and the list goes on.
Here is a novel idea. Why not start automating certain aspects of your storage facility by offering it as a premium that customers can add to their monthly bill?
This allows you to get paid for the upgrades and customers feel like they have options other storage operators haven’t ever given them.
Take the example I first heard this idea on, smart locks on their storage doors.
Why not offer this as an option to a customer for a slight increase in the monthly rent? Let’s say $8 to $10 or $12 or so per month.
I know I would most likely take it if I was a customer (I also know my wife would not).
This could be added to our premium unit charges we utilize in the value add pricing, for example. We take a block of the conveniently located units that we will charge a premium for anyway (we charge premiums over our street rate, not discount units on the second floor below the street rate in most cases), and add on top of that the smart lock feature.
We usually only sell one disk lock at most to a customer at move-in. Here we are selling something every month that adds value to our facility.
Think about all we can potentially automate.
- Entry systems
- Smart storage door locks
- Charge a fee for non-auto bill-paying each month
- “Oh…you don’t want to set up auto-pay? OK, that is a $3 per month additional charge.”
- “You need an invoice sent every month? No problem. That’s $2 per month, and we are happy to add that to the monthly bill”.
We already add mandatory tenant insurance to each monthly bill unless customers provide a declaration page on their homeowner’s insurance proving coverage, something very few do.
Yes, the more I think about this, the more potentials I see for killing two birds with one stone.
As the customer base gets more tech-savvy and younger, more and more will choose the tech options, allowing this slow automation upgrade program to get some legs while getting reimbursed along the way for the cost.
At some critical mass, let’s say 60% or 70% of customers choosing the feature, it could become mandatory like we finally did with tenant insurance.
Perhaps a much lower percentage as well.
I am getting excited about this idea’s possibilities and would be very interested in anything you guys may be doing.
Please share in the comment section.
Rather than having to expend a lot of money upfront and hope we can get paid back eventually for the expense, let’s get it paid for along the way and even make a profit doing so.
You got to love the self storage business. It is the best for the small investor.
