In today’s ultra-competitive self storage market, many independent owners are unsure about what to focus on to keep their property competitive and increase its value. With the continued growth of the REITs, regional operators and third-party management platforms, many independent operators are facing more skilled and well-capitalized competitors than ever before. So, how can an independent self storage operator not only stay competitive, but preserve and increase their value as well? It is simple; independent operators need to change their attitudes and processes to become more proactive. Below are four strategies that you can employ to compete and increase your value over the next 90 days.
1) Spend Marketing Dollars Smarter
If you try to take on the large operators head-to-head on everything they do, chances are you will lose. For example, you can’t possibly spend the same amount of money on marketing that they do, but you can market where they are not and be smarter about the marketing dollars you spend, specifically in your submarket. Spend some time with your website provider to better understand your Pay Per Click (PPC) campaign and PPC words to make sure they are submarket specific and also think about upstream PPC opportunities such as local neighborhood names or local events that the larger operators are not aware of. This will make your PPC campaign more effective and you will achieve a better ROI for every marketing dollar you spend.
Also, be sure to include grass roots marketing in your plans. Most of you have the opportunity to join a local Chamber of Commerce and local business groups. You should also consider advertising in neighborhood newsletters, church newsletters, school newsletters or sponsoring a local youth sports team. These local grass roots advertising options can bring you a number of small businesses, employees, their families and friends, and people in the community who think and act like you. It’s all about the potential customers thinking of you first when they make the decision to rent a self storage unit.
2) Curb Appeal – Refresh Your Look
Change up your curb appeal and get a fresh look. Most large operators want all of their stores to look the same, but you have the ability to come up with a NEW workable design and make the change in the matter of days, not weeks or months. For example, say you have your curbs painted white along the street and your office shell is cream colored with blue trim around your windows. Change it – and make your property stand out! You will be surprised how many people will stop and notice your store even if they have been driving past it every day for years. The advantage you have as an independent operator is you can change the look of your store and make your curb appeal and street awareness an important part of your marketing campaign.
3) Control Your Operating Costs
Can you reduce your operational costs so that your profit margin is greater, even without an increase in occupancy or rates? You better believe it! Not only will you increase profits, but this will also make your property more valuable. With occupancy at all-time highs, now is the time to review your advertising spend and Sparefoot bid pricing and make adjustments.
You should also shop around with local vendors. Local vendors are more likely to give a local business owner a better deal on goods and services as compared to a large corporation. Maybe give the new company a try if the cost savings are compelling. It is worth your time to analyze all of your operational expenses. Keep an eye on your itemized bills for phone, internet, trash and other utilities. They are infamous for adding additional fees such as fuel surcharges, COVID cleaning charges and for increasing rates when your current contract expires without informing you. Just by calling and saying something you can often get these reduced. The point is that local operators can save money if you simply take the time to look at each and every detail of your business expenses and not just focus on the revenue.
4) Unit Pricing and Rental Rate Management
Instead of having the attitude that you’re at odds with the large operators, join them. Many of the REITs and large operators actively adjust pricing on units daily/weekly. Sign up for StorTrack or another service that will provide you daily rental rates for your competitors. Take the time to identify your 3-5 main competitors and get in the habit of checking their rental rates daily (onsite and website rates) and adjust your rates accordingly. It doesn’t take long and should become a part of your daily routine. We have found that operators who are proactively adjusting rental rates (street rates) to be more competitive operate at higher occupancies than the market which allows them to drive revenue higher. Also, be prepared to reduce and increase street rates based on seasonality, which will vary depending on where your facility is located. Remember, you can’t raise rates on a vacant unit!
These tips can help any operator, large or small, stay competitive in an increasingly tight market. Being proactive, rather than reactive, will help your facility achieve greater revenue and ultimately a higher valuation.
Ben Vestal, CEO of Argus Self Storage Advisors