We’ve all seen it.
The big facility down the street is offering insane rates for new renters.
“$23! $15! We’ll pay you to rent with us!” And customers don’t know any better, so they go for the cheapest rate.
What can a small storage facility do to beat these tactics? How do you get renters without slashing your rates to match?
Of course, those rates aren’t going to stay low for long. Renters who think they’re getting a great deal are going to get some eyebrow-raising bills sooner than later.
By then, they’ll have all their stuff in a storage unit and it’ll be a gigantic hassle to move out and find a new one. A moving truck, a day off work, and maybe some friends to help pick up the couch - it’s not easy!
How can you, the friendly, local, clearly-priced facility down the road keep that renter from making the mistake of renting there in the first place?
StoragePug recently hosted a brainstorming session with a bunch of the PugPack (our clients) and we learned a few ways that operators are dealing with the predatory rate increases we’re seeing across the industry.
Read on to find ways to get more rentals without slashing your rates to the floor.
The single most important thing we can do to combat these ridiculously low rates is to help our customers understand them.
Problem is, going out onto the street and shouting THOSE RATES ARE A LIE doesn’t work (I’ve tried). Also, it’s considered rude in most communities.
Communicating with customers that are renting from a different facility is tricky. If they rented a unit with one of the big facilities, odds are they never called your facility or visited your website.
We know from the 2023 Self Storage Demand Study that about half of renters choose the first facility they interact with. That is, if they visit a website, call a facility, or step foot in an office, they rent from that business.
This still leaves about half of customers who shop around! Those customers are most likely to be concerned with the listed price, too, since they care enough to not just take the first available option.
You can communicate with these customers in a lot of ways, but your primary goal needs to be to inform them of the problem. That doesn’t mean you need a billboard saying “These other guys will cheat you,” but you should mention something like “Fair rates” or “No rate games!” on your marketing materials.
Consider adding this wording to the page titles of your website, too. This is one spot you can potentially get in front of people who haven’t yet clicked on a webpage.
If you advertise your rate lock, your rate guarantee, or your honest pricing, you could potentially get new renters thinking about whether the competition doesn’t have those.
By far the best way to inform people is to talk to them. Anyone who calls your facility asking about prices should hear about your rate guarantee as well. Ask them how long they’ll be storing, and lead the conversation towards your rate guarantee from there.
For more info on how to convince customers to rent with you, check out our Sales 101 for Self Storage Managers!
Pug Pro Tip: Customers don’t tend to like it if you start out by bashing the competition. You are obviously not an unbiased source of information on the subject, and if you haven’t built some trust with them, they’re likely to assume that your information is also biased.
Best ways to inform your customer
It’s hard to advertise your rate guarantee if you don’t offer a rate guarantee. So, the first step is to decide what sort of rate lock program you can afford to offer.
If your business leans hard on rate increases to stay profitable, you may not be able to offer this sort of amenity at all. On the other hand, if you’re a locally owned small business, you may be doing this already.
Businesses that aren’t engaged in aggressive rate hikes should formalize their rate practices. That means putting it in a form that you can advertise to your customers and that your customers can then count on.
Start with a good round number - 6 months, 9 months, or 12 months are popular. Then decide which language you like best.
Phrasing Options:
And of course, you can combine these or come up with your own. Make sure you’re phrasing it in a way that is immediately clear to anyone in your area.
Some of the PugPack are using terms like “Good Neighbor Guarantee,” which can help you differentiate yourself from your competitors.
For small operators, you need to give customers a reason to choose you over the big box stores, and being local is one way to do that. You’ll be seeing these people at the grocery store or at church - your customers will eventually get to know you! Treating them right isn’t an option for small businesses, it’s a necessity.
Use your rate guarantee to show that you’re committed to doing so.
#3. Play the game, but by the rules
Technically the other guys are playing by the legal rules too - they’re allowed to increase rates just like you are.
But there are unwritten, unofficial rules that your customers will expect you to follow as well.
For example, when they rent a storage unit for $49/month, they’re probably expecting to pay $49/month. Not forever, but for a while at least. And if that’s not going to be the case, they’ll want you to tell them!
For a small business, your reputation is your survival. Without a good reputation, your small business doesn’t have the outside support (read: cash) to survive.
If you start regularly angering your tenants, you’ll find yourself dealing with lots of negative reviews, bad word-of-mouth, and no referrals coming in.
You can still offer low rates though! Use strikethrough pricing, first month discounts, and similar strategies to show that you can match the low rates of the competition without taking them for a ride.
Ensure the customer understands that you are offering an introductory rate, as well as when the rate will go up. Rate increases can go over surprisingly well if the customer knows what to expect.
Teaching them what to expect is a big part of the onboarding of a new renter.
You might find yourself thinking if I did that, I’d go out of business! And you might be right, especially if you’re a small business serving a small town.
Rate increases are always going to irritate customers, but they can’t easily move out. And, even if they’re irritated, they can understand the necessity of any business trying to make money.
The big brands can make a lot of money in the time between raising the rates and customers moving out - and that’s often good enough
These aggressive rate increases are pushing people to make changes, though. Some are moving out, of course, but others are looking to pass laws that prevent these sorts of rent increases. If these types of laws are passed, they’ll hit everyone in the industry.
The bottom line is: people are turning against the brands that aren’t treating them well. It just takes a long time.
This is frustrating, but you do have an opportunity to capitalize on this frustration. Tell your customers - and show your customers - that you’re not playing the rate games, and that they can trust you to treat them fairly.
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At StoragePug, we build self storage websites that make it easy for new customers to find you and easy for them to rent from you.
