Thread: New facility starting prices...

I am breaking ground on a new facility and am currently focusing on the starting prices per unit.

I have 5 competitors within 5 miles that are all 95% full or more...

My facility will be nicer, more secure, metal not wood, concrete not asphalt I will also have a kiosk and website for payments that no other facility will have...

Phase 1 will be 95 units...

Do i need to start off below my competitors pricing or above? Or just stick with 1st month free or some special like that?

Every area of the country is a little different, not just from state-to-state; it’s also different from one side of town to the other. What I am saying is there is NO simple rule of thumb. Your feasibility study, business plan and due diligence should be a great indicator as to what direction to go. You know the comp’s occupancy; do you know how many units each rent per month and how many vacates each has per month? You will impact the market, so put it into % and figure your share.

Your rates establish the value for your facility and your banker will be interested. We are in a location that is over built with storage. Our rates are still 22% higher on smaller units to 47% higher on the larger units than our competitors. We still rent more units than our competition. We feel it’s easier to give a discount than raise the rent mainly because the customer knows up front the discount will disappear and what the future rate will be.

If you build a better mouse trap and do quality LOCAL marketing you can justify the higher rates and you get a better quality tenant. We will not use the $1 move-in. Example: Our last auction we had 14 units available and sold three, the rest paid. Our competition uses the $1 move-in, had 53 up for auction and sold 47 out of only 202 rented. They were at 34% occupancy before the auction.

Kiosk may be the wave of the future but there is no way for them to interact with a customer the way a living breathing person can do. Remember all marketing does is make the phone ring. The manager (a top quality sales person) is the one that makes thing happen.


Why do we call them manager insted of sales person?

I agree with starting high and discounting as needed.


Just remember that no mater what your rates are if you are not offering outstanding customer service rates don't matter!!!!

In an ideal world, the "better mouse trap" should work, but we don't live there. Cheaper and Free will often come back to haunt you. If the only way a person can afford to get a storage room is by a "free offer or discounted for x amount of months", then when the regular rate hits, be ready to say "auction". Location is always key. Direct, one on one marketing (cold calling) really does work.

No matter how you do it, it takes time. Good luck.

Oh, the Kiosk? Been there, done that! In 9 months, 2 rentals and several payments. The customers, both young (college crowd) and mature, prefered direct contact with us or using the internet. The cost was not worth it and the owners finally returned it.

Kiosks would probably work at a location with no management on-site and that is linked to a security gate.

Originally Posted by Mr Bill

Oh, the Kiosk? Been there, done that! In 9 months, 2 rentals and several payments. The customers, both young (college crowd) and mature, prefered direct contact with us or using the internet. The cost was not worth it and the owners finally returned it.

Kiosks would probably work at a location with no management on-site and that is linked to a security gate.

Interesting, I'd think the young crowd would love a kiosk. What type of hours was the manager there? On site or off? We've looked at kiosks and haven't pulled the trigger because the monthly maintanance and overhead came in close to a manager's salary. We have had a lot of luck with using a website that accepts reservations, online payments, a call center and an on call manager. To keep the hours and what can be mind numbing boredom down during slow times.

I have been in the buisness 5 years and I believe it is better to have your prices comparable to the facilities areound you and offer a discount in the 2nd, 3rd, ect. People usually go to facilities where the rent is CHEAP and move out when the discount has expired. If you give it in the 1st month they tend to move out after the 2nd month. Good Luck!

Originally Posted by peten

Interesting, I'd think the young crowd would love a kiosk. What type of hours was the manager there? On site or off? We've looked at kiosks and haven't pulled the trigger because the monthly maintanance and overhead came in close to a manager's salary. We have had a lot of luck with using a website that accepts reservations, online payments, a call center and an on call manager. To keep the hours and what can be mind numbing boredom down during slow times.

In a previous post, John B (in FL) discussed his use of the kiosk and what I gleaned from his insight, he took every customer who rented to the kiosk & did the rental through the kiosk so that from day 1 the customer knew how to use the kiosk....I thought that was brilliant! Showing the customer & letting them use it & find out it wasn't gonna bite!!! He has had success w/his doing that...I think many times the manager's attitude toward using it that may influence the tenant...then there are people (like my mom) who would "NEVER" use it...she wouldn't go through a drive through at a restaurant until she had a stroke....she still won't use an ATM card!! You'll always have a small percentage like that!

Pat
High Point, NC

Depends on where you place the kiosk. Most are normally outside. Our kiosk in Florida had an awning over it, which protected the kiosk from the rain, not so the person standing there using it. Both kiosk and customer were also standing outside in 100+ degree temperatures for 5 or so months a year. I did try for one whole month to get tenants to go outside with me and try to pay at the kiosk...it was June..I can't tell you how many times I got the "are you crazy?" look that month.

If we were in Minnesota, the kiosk and the customer would have been outside in below freezing weather for about the same length of time. Plus I don't know any place in the entire city where someone would have felt comfortable standing outside at night for the amount of time it took to go through the entire rental process....we had it pretty well lit up, but it was at a storage facility, and at 10 pm, a person standing at the kiosk would still have made an easy target for crime.

The ideal place would be to have a small anteroom like some banks have to place it in, so the kiosk-using tenant would be inside, but not in the main, locked office after hours, and also protected from the elements. However I haven't seen many storage facilities with that type of entrance.