So Special!

Everybody loves a good deal. No one really wants to pay full retail for anything. In the world of self-storage, we tend to give away move-in specials to get people in the door. Common wisdom is its worthwhile to sacrifice short-term revenue for long-term profits or at least mid-term occupancy.

But lets take a closer look at how youre using specials to create more business. Do you have a standard deal you offer all the time, or do thresholds trigger a special? If you dip below 90 percent occupancy or have a unit-size surplus, is that when you start wheeling and dealing? Maybe you wait until business slows, or perhaps you launch your special campaign when demand is high.

Specials should be a strategic tool rather than a reactionary weapon in your marketing arsenal. Figure out how potential renters react to each type of offer, and ask staff members for their opinions on what is and isnt so special.

Deliberate Action

Self-storage increasingly is a sales-and-marketing business. Its necessary to study the impact of pricing, specials, sales techniques, ad campaigns and marketing promos. You also have to know about your customers; pay attention to how much they spend and how long they stay. Not only does this determine your cost of acquisition, it enables you to drive business.

Lets say you know your cost of acquisition is $100 with normal sales and marketing approaches. Your average customer spends $500 and stays five months. Is this good or bad? Well, it all depends on your cost of operation. If youre in an older facility thats paid for, youre living high on the hog and can afford to spend more in marketing or discounts. If you just bought a newer property at todays cap rates, you may be flirting with disaster. Youll have to bring down your cost of acquisition and drive up the average value and stay of each renter.

Another consideration is whether youre in occupancy-building mode and trying to get a critical mass of renters, or have a comfortable bed of tenants and can focus on increasing profitability.

In any case, using specials can help. There are a variety of approaches. You should pick one deliberately and test its effectiveness. Or invent a special you believe will bring a certain result, and track the fruits of your labor. Its exciting to try something different and see if you can deliberately make customer behavior happen. But think through your plan and note the outcome. If you think your big competitors act without intention and review, think again. Theres no way Gap, Old Navy and Wal-Mart offer any discounting or specials without careful consideration and scrupulous tracking.

You dont need an entire department to make thoughtful marketing decisions. You do, however, have to have your whole team on board and let them know your plan and goals. Make it happen and see what happens.

Leverage

What if its the beginning of September and you discover August wasnt what youd hoped for in terms of net rentals and gross revenues? Can you afford to wait to see what October brings? Actually, you should have known by Aug. 10 that numbers were behind and addressed the problem. You can still do something about September.

If you know your strengths and weaknesses compared to your competitor, you can leverage any special so its significant to potential customers. Dont forget, you must sell the special. Make sure people know the benefits of your offer and what it will mean to them. Make it clear how much they will save.

That is what makes the special work. When people realize how much it means to their purses, they become willing and ready to sign the lease and move in.

Take some time to discuss how specials fit into your strategic plan and get to work. Good luck and good selling! 

Tron Jordheim is the director of PhoneSmart, an off-site sales force that helps storage owners rent to more people through its call center, secret-shopping service, sales-training programs and Want2Store.com facility locator. You can read what he is up to at www.selfstorageblog.com. For more information, e-mail [email protected].