On Every Transaction?
Unless your advertising says “on every unit” or “on every size” or something similar, then you can better manage your discounts when you think of your move in specials as a closing tool, rather than a default part of the transaction.
Move In Special As A Closing Tool
Here’s how this concept works in practice.
Let’s say a prospective customer calls or walks in to rent a storage space and asks for a size that is highly occupied (let’s say 90% or above). This prospective customer is interested in renting with you, and is also aggressively looking for the best deal so they ask for your most aggressive move-in discount that you have advertised on a sign or flier or website. Assuming, as I mentioned above, that you haven’t promised the discount on every storage space, you simply reply that your move-in incentives are tied to occupancy and that if they would like to rent a <name size that has the most vacancy> you would be happy to give them the <most aggressive move-in special>.
You then continue explaining what you are willing to do for them on the size the originally requested. That would sound something like this, “If you still would rather have the <size they originally requested> I can offer you <very small token discount like $10 off the first month> .
Then be quiet.
You’ll be surprised at how many will move forward with the rental/reservation right then.
Escalate or Follow Up
For those shoppers that say something like, “Well…. I’m not sure… I think I need to keep shopping,” or something similar, then the ball is in your court to stand pat or to escalate your discount or move in incentive. In this way the move-in incentive becomes a closing tool rather than a standard offer.
With this approach you are in a better position to fine-tune your offer. If demand is slow or slowing and you really do want the rental, then sweeten the deal. If demand is strong or you are renting something you know your competitors don’t have, then maybe you let them go and use your follow up skills to rope them back in.
Do you differentiate your move-in incentives based on occupancy? How do you do it?
Photo Credit: timparkinson
An off-topic, but important post.
I may not agree with Randy Smith on everything, but I think we should all rally around the movement he is creating to abandon the online lead aggregators.
His arguments against the aggregators are sound.
Here are a few reasons I’m throwing my public support behind the movement to abandon the self storage lead aggregators.
- They destroy property value in the long run by pushing the industry to compete more heavily on price while at the same time increasing costs.
.
The aggregators are not creating additional value for self storage owners. Instead, they are taking the self storage owner’s share of the pie and giving some of it to consumers in the form of lower prices and taking some of it for themselves through their fees. Since they haven’t made the pie any bigger, the more the aggregators become entrenched, the more self storage owners are left with a smaller piece.
.
Aggregators increase your cost of marketing online by giving you another (large) website to compete against. Aggregators also increase your cost of marketing by adding another sales channel that must be managed by someone in your organization.
- Aggregators create value for themselves by standing between you and your customers and charging you for the privilege. The aggregators are marketing to the same consumers your are and by using them you are creating additional online competitors.
- Aggregators dilute your brand and homogenize your position in your community. Your company’s message and its personality are lost on aggregator websites. You are forced to look like everyone else. You have very little ability to differentiate yourself from your competition except through the deepness of your discount or the size of your move-in special.
- You are better off investing in your own web presence. Using an aggregator is like renting your web presence. Owning your own corner of the web is much better. (You are a real estate investor or you work for one… this should be a no-brainer.)
- In the long run aggregators benefit the biggest self storage operators over the smaller, independent operators.
.
The REITS are more capable of maintaining their high ranking on the search engine results pages regardless of the lead aggregators. The small guy is the one at risk of being pushed off the first page as lead aggregator sites rank higher and higher in local markets. If I were the marketing director at a REIT I would negotiate lower fees than the small guys (because at a REIT I would control a large amount of inventory) and because I was secure in my own search engine ranking I would use the aggregators to push more of my local competitors off of the first page of Google/Yahoo/Bing.
Full disclosure: You can find a testimonial I wrote for Sparefoot on their website here.
I have used several of the lead aggregators and my rational for doing so was simply this: if they were going to be there, competing with me online, then I may as well be part of the listings that storage consumers find when they go to their sites.
This logic only holds if you believe the aggregators will always be there and cannot be avoided. I’m not ready to concede that point.
I believe that as an industry we can act to reverse their growth. Thus, I’m throwing my support behind Randy Smith and his efforts to educate the industry about the long-term dangers they pose to self storage industry profitability.
The examples from the airline, hotel, and and other industries are clear. Aggregators help themselves, they help consumers get lower prices, and they harm the profitability of the industry they become entrenched in.
Now is the time walk away from the aggregators and take back our marketing and our relationships with customers.
Reminder: The opinions expressed here are mine alone, and not necessarily those of my employer.
