I realized we were behind the curve in running our self storage business when we had an Extra Space open up in our submarket.
Our facility had been enjoying over 95% occupancy for years. We had regular rate increases. Everything was firing on all cylinders.
We would explore new or different marketing avenues, but always came back to “Why would we spend anything on marketing when we are so full?”
Then we began to notice a slight drop in occupancy. At first, it didn’t register as an issue because we were still well over 90% occupancy. But each month the occupancy went down.
We had the same number of move-outs, but the move-in rate had slowed down.
Competing with a REIT in your submarket
Man, they were aggressive.
10 x 10’s at almost half of what we were charging. Plus the first month, then the first two months free.
I ended up renting a unit from them to see what they were doing.
Every day their offers changed.
It was hard to keep up. I had the experience of shooting in the dark. I knew their weaknesses, our managers could exploit them if talking to prospects.
But we weren’t talking to many prospects anymore.
So we started an online marketing program like I discussed in episodes 147-150.
But I also invested in software that would allow us to see the rates and specials every competitor was offering in our submarkets – almost in live time.
This is what the REITs are doing, so why not us?
I saw demonstrations of different software programs and ended up choosing Veritec Solutions.
There are a lot of functions this software can perform. We could use it to adjust our pricing daily if we wanted to do that.
But most importantly for this situation, we can see daily what the specials our competitors are offering. Our Managers armed with this information, know how to address every prospect that calls.
When we know what the competition is going to offer on any given day, we can adjust our sales pitch.
It also allowed us to adjust our pricing where needed to to be more competitive. We even found that we were underpriced on a few unit sizes.
In today’s market, where the discounts our competition offers changes daily, being able to know what they are is critical.
We now have that.
I also feel like we can now maximize our pricing to get income we might have been leaving on the table.
You are in the data analytics business – whether you know it or not
If you are in sales today, you are also in the data analytics business.
If you are in marketing, you are in the data analytics business today.
As we discussed in the online marketing series, the data will tell you which ad, which offers, headline and image performs better.
We have to be able to adjust our offer to stay relevant to our competition. We have to know exactly where we stand in the market and what others are doing to stay relevant and show up where customers are looking.
When I say “we,” I am not talking about our company either. I am talking about all of us who are small investors.
Questions you need to be asking to compete
Here are the assignment questions you were given to you last week:
- Where does your facility stand in your submarket today, and I mean today, in relation to positioning? Are you the most expensive, least expensive, in the middle?
- Is the pricing of the units leaving money on the table or overpriced and sending prospects to other facilities?
- Are you offering any specials?
- If so, what are they and are they based somewhat on what your competition is offering today?
These are the questions we need to have valid answers for to stay relevant in the upcoming self storage business landscape.
As we acquire these tools and the procedures for maximizing them to give us the meaningful data we need, we start to close the gap. The gap between how the REITs run their business and we do.
I talk often about my mission being to support small inventors in starting or growing their self storage business in a strategic way that creates True Wealth and a fulfilling career.
This Episode has focused on the “strategic” portion of that mission.
The old days of simply building a facility, running a yellow page ad, then sitting back and waiting for the customers to come are over.
We now have to show up and be relevant.
Especially for those of us who are expanding and bringing new space online as part of our marketing strategy. The ability to lease it up is critical.
The tools are evolving and changing fast and we must keep up.
My coaching is to start exploring what you can use to stay on top of your market.
You may not be in competition directly at the moment with a REIT in lease-up, but soon you may be competing with a company like ours. One that is using technology to stay competitive in the market.
Next week I will share a new income strategy we are starting to use that can add anywhere from 3 to 7% more income without raising your unit pricing.
