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I will admit that a few years ago I was scared of competing in a market against REITs. I remember an investor in our deals was really questioning me hard asking how we could ever compete and win in the marketing game against them. “They have endless amounts of money they can throw at it against you.”
Well yes, they have a lot more money than I do, and yes, I had my doubts if I could compete for the same customers and win.
Those days are over. I am clear that smaller facility owners who are willing to learn and play the game can go head-to-head and win.
And I mean win decisively.
I have learned a lot in the last ten years competing with them and other larger regional players. Luckily we are in the self-storage business and that gives us a distinct advantage if we recognize it and use the right mindset and tools. The advantage…self-storage is a hyper-local business.
Here are three ways any independent smaller operator can stand out and win the game for the same customer against REITs today. Now, this assumes you show up online and in AI inquiries. That means Uncle Bob doesn’t throw a website up for you. You have learned and are playing the online game somewhat effectively using SEO, pay per click or online ads, and your website ranks to some degree and is relevant to your customer base.
I have a lot of free training on my perspective on online marketing in today’s world and you can access all of it on my YouTube Channel or at https://creatingwealththroughselfstorage.com/docs.
But let’s focus on three ways I know you can win at the game of winning self-storage customers against REITs in your trade area.
1. Have transparent and fair pricing.
Today this is number one on my list. I have endless rants on the predatory pricing strategies REITs use today, and it is not hard to stand out against that.
Be sure in every inquiry call, in every marketing ad, your website, and everywhere, to explain you do not use introductory rates to lure customers in and then raise rents endlessly until someone finally cries enough and moves out…then start that same process over.
Have fair but competitive pricing. This doesn’t mean we don’t have price increases, we do, but they are fair and not based on customer-centric algorithms. We won’t have customers paying above street rates just because we know it will be hard for them to move out. I don’t like being treated that way and we won’t do that to our neighbors, and we relate to our customers as our neighbors (remember storage is hyper-local).
This one act alone in my opinion is a major factor separating you from REITs and allowing you to beat them in the new customer game. But your customers have to know about it. Become a crusader for fair and transparent pricing.
2. You and/or your Manager’s partnership with local businesses.
Each of our facilities’ Managers is involved in the local business organizations. When they have business fairs, our facility always has booths. We refer business to the other members, host events at the facilities, and actively show up as a business partner in the market or trade area (remember storage is hyper-local).
I have never seen a REIT manager show up or try to be a member in any market. They couldn’t care less about being a real member of a community.
Again, we make sure our members in these organizations know of the differences between us and REITs, especially the predatory pricing strategies difference.
You and your company can show up as known, valued members of the local business community, and this will have a ripple down effect in a hyper-local trade area.
3. Measure your or Manager’s effectiveness beyond standard benchmarks.
I have often talked about KPIs (key performance indicators). They are important. Occupancy, delinquency ratio, etc.
However, in today’s world, I would put in there some measurements on the return on community involvement and effectiveness. Some examples are:
- Referrals from businesses in the area.
- Event attendance.
- Reviews from business partners in the trade area.
- Repeat business.
- Referrals from existing customers.
You can come up with anything as a measurement you feel would move the needle and would make a difference in a particular trade area with a particular manager. Branding your facility as different from the big players and marketing go hand in hand. When this is done consistently and over time, winning the game for new customers is much easier against the REITs.
To win the game against big players, embrace hyper-localism and become effective at branding yourself as different and being a valued member of that community, facility by facility.
Now go out there and win. There is no reason why we can’t today, and every reason why we can. The REITs have created their own problems and let’s now use it to our advantage.
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General education about the self-storage business, not investment, financial, tax or legal advice. Disclaimer
