Back in my day, we used to take a dime down to the corner store and come away with a bag of candy, a loaf of bread, two boxes of cereal, a tank of gas, and a new microwave. And that only spent half the dime!
Okay…not really. But people look back on what they used to spend on products and services with rose-colored glasses–which can make raising rates on their storage units tricky. A tactful and compassionate approach to raising prices works with most renters, but you’re bound to run into folks who dig their heels in and pine for the good old days.
While they’re not likely to respond to an Economics crash course to explain why rates go up over time, there are things you can do.
Let’s look at three ways to respond to renters who respond with hesitation or outright hostility to rate increases!
Show the Value
You’ve been improving your facility every year to keep pace with the competition. Whether that’s better security, more high-tech features, or more responsive customer service, your street rates have likely changed to reflect your improved customer experience.
Just like when you’re trying to sell your storage facility to a potential lead, even existing renters want to know what their money’s buying them. A renter who’s upset about a rate increase might feel like they’re getting the same service as before but paying more–it’s up to you to point out the places you’ve given them more than what they had when they started renting with you.
Consider pointing out improvements in these areas:
Which features to call out will depend on what you’ve invested into–and the needs of your specific customer. This is where having a healthy rapport already built up helps you!
Not every renter cares about the new stuff, though. They see the price they’re paying per month and nothing else. That’s when we need to get creative to help them find a solution that works for them.
Will a Smaller Unit Work?
We’ve discussed de-escalation tactics in another blog, with downgrading sizes as a potential olive branch. If a renter doesn’t want to pay an increased rate, taking part in the problem-solving process can change your positioning in the conversation–instead of two people working against each other, you’re on the same team.
Maybe some of the items your tenant has in storage could find another home–maybe those items could be rearranged to take up less space. And in either case, a smaller storage unit means paying less rent.
The important thing here is not to push this solution too hard. You’re just extending it as an option, and offering ways you could make it work for your tenant. Ideally, they’ll see that you’re trying to work with them toward a goal of paying less per month. Letting them know that you hear their desired outcome lets you start working toward a solution.
That doesn't mean they’ll accept the solution, though. Most tenants probably don’t want to spend a day moving things from one storage unit to another. And this is where a manager with excellent communication skills comes into play.
Your annoyed renter may drop the matter here because moving to another storage unit is too much work. Are they happy with the outcome, or quietly fuming? Deciding what counts as success for you here informs your next step–on the one hand, you can’t please every customer, especially if they have expectations that don’t align with yours. On the other hand, happy tenants foster goodwill toward your storage facility in your community.
So whether you press the matter or let it be is ultimately a judgment call you have to make. And if the conversation needs to continue, you do have one more technique in your toolkit…
Let Them Win (a little)
When all else fails, employ the oldest marketing trick in the book: losing.
Don’t worry, we’ll sell you on this one.
The first way to do this is by trading. Your renter doesn’t like the price increase–but the blow to their wallet can be softened by offering something else of value. If you offer 24-hour access for a small fee, maybe it's worthwhile to give this tenant temporary or long-term 24-hour access?
If the news of the rate increase has your tenant worried about the future, offering a rate lock on the new rate to help them feel more financially secure may be the assurance they need.
Or, you can turn the conversation around entirely. As Matthew Roberts pointed out in a 2024 Gabfocus, ask the tenant, “What price do you think is fair?”
Of course, you don’t want to open the door to a response of “Free!”
Instead, consider your initial positioning–that the price does need to go up. The market is what it is, and rates increase. But making it clear to an annoyed tenant that you’re willing to meet them in the middle gets them thinking about a potential number they’ll consider a win.
And when you accept an increase of thirty percent less than you’d intended, the tenant feels like they’ve won something. You still increased the price and profitability of that unit, and everyone walked away feeling accomplished.
Conclusion
To be clear, none of these techniques are an attempt at manipulation. At the end of the day, you’re not choosing between growing your business and meeting your customers’ needs. You need both.
It’s another example of that delicate tightrope act–but a challenge you can rise to.
Some renters will respond to the news of a rate increase reasonably–but for those that don’t, show them what they’re getting for the money. If they aren’t convinced by what they have already, help them trade down or offer them ways to trade up within reason.
And foster that goodwill with your tenants every step of the way!
To learn more about handling tough conversations with your customers, check out these resources:
When to Increase Self Storage Unit Rates
