2023 Year in Review | Self Storage Virtual Workshop

Gabfocus Episode 55 | 2023 Year in Review

Lessons and insights from our favorite self storage experts. At the end of each year, we like to invite some of our favorite experts to share their lessons and insights from the year and what they're dreaming up for 2024.

Featured Speakers: Jane Sauls, Nick Newcomb, & Ginny Sutton
Moderators: Tommy Nguyen & Melissa Huff

Category: Operations, Marketing, Trends
Focus: Owners, Operators, & Managers
Aired: December 14, 2023
Duration: 1:17:45

Overview

If you don't have time to watch the whole session, here are some of our favorite parts:

At 8:00, our experts start discussing the hardest challenges from 2023, including occupancy decreases, rental rate increases, and property taxes.
17:10, Ginny talks about how more and more operators seem to have adopted technology in the past year.
Starting at 22:05, Jane kicked off a discussion about consolidation and how it's occurring in all markets.
At 24:10, Nick talked about following the REITs and how you can stand out from the competition.
28:50, Jane discusses the importance of finding a great manager and empowering them to own their role.
Around 29:10, our experts dug into how to properly handle rate increases and how to retain customers.
At 33:31, Ginny covers the importance of focusing on how you communicate with your tenants and how you word messages to them.
40:00, each guest covers what they've noticed the REITs doing and what they have learned from them.
42:20, Jane kicks off the discussion about what she expects to see in 2024 and which trends she thinks will continue.
47:00, Nick talks about how some people may struggle with their investments with occupancy and rental rates dropping.
At 48:50, Ginny discusses the importance of marketing in 2024, and why you should start focusing on it now.
Starting at 54:45, our guests tackle some questions during our Lightning Round.
1:00:00, our guest experts answer the question of the week!

Gabfocus Takeaway

The past year was a return to normal in many ways, and in 2024 you should be focusing on getting back to the basics. Learn how to sell again, how to market your business, and how to compete with the larger operators in your markets. If you aren't already, get involved with your community and learn about your local tenants. Learn what resonates with them and start focusing on what they care about. 2023 may have been a little rocky in regards to occupancy, handling rate increases, and consolidation, but the industry as a whole remains incredibly strong with plenty of room for independent operators to compete and be successful.

What are Gabfocus Sessions?

Gabfocus Sessions are virtual workshops for self storage owners, managers, and operators. Brought to you by the team behind Gabfest: StoragePug and Lighthouse Storage Solutions.

Each session features hand-picked industry pros who will dive deep into relevant topics surrounding our industry, share best practices, and explore trends in the market. It's our hope that these sessions help you navigate your self storage business better during these uncertain times.

Want to learn more about self storage? Join us on select Thursdays for Gabfocus.

Questions Answered in this Session

What are some of the hardest challenges operators faced in 2023?
What are some of the biggest changes you saw in the industry this year?
Did you discover an area that you were weak in that you weren't aware of?
What have you noticed the REITs experiencing and changing?
What are the biggest lessons you learned in 2023?
Are there any industry trends or technology that you're expecting to see in 2024?
What are you concerned or worried about in the next year?
What are you preparing for next year?
How do you think the industry will perform in 2024?
Why do you love the storage industry?

Jane Sauls

Jane Sauls

Sauls Storage Group

Website: https://saulsstoragegroup.com/
Email: jane@saulsstoragegroup.com

Nick Newcomb

StorageMax

Website: https://www.stomax.com/
Email: nick@stomax.com

Ginny Sutton

Texas Self Storage Association

Website: https://www.txssa.org/imis/
Email: gsutton@txssa.org

Resources from this session

Awesome Quotes

“Once your operation is in place, you can become more dynamic with your pricing, but that requires data. You need some method of being able to record the data that you need to know whether your price is in the right place - whether you need to move it up or start giving some concessions.” - Warren Lieberman

“I never want to downplay to what someone else is doing. I'm better than they are, then I'm going to be worth a higher price. That's what value is. If you go out to a restaurant and get really good service, would you go back? Yes! What if it was pricier? You'd still go back because you got better service and a better product.” - Jim Mooney

"It's good to be informed on your competition. I don't want to ignore them, but I don't want to respond too strongly to them either." - Warren Lieberman

"We did a survey of 10,000 facilities on their pricing. We found out that two-thirds of those operators didn't change the price of a single unit of the course of a month." - Warren Lieberman

“Rate increases and value pricing are the number one ways to grow your revenue.” - Jim Mooney

"Tenants in more convenient units tend to be less price sensitive." - Warren Lieberman

"The size of the unit is only one aspect of what people are willing to pay for." - Warren Lieberman

Highlights

Foundational marketing strategies to have in place - whether leasing up or stabilized:

Website
Set up listings (Yelp, Google My Business, Apple Maps)
Social Media
Establish Local Partnerships

Lease up marketing strategies:

Lead Generating Strategies (like digital ads)
Aggregators (Sparefoot, Storagefront, etc.)
Awareness Campaigns (like billboards, flyers, and sponsorships)

Your average customer value
Find the average stay length of all tenants. Next take your economic occupancy and divide by how many units you have. That will tell you what the average customer pays.

Multiply the average length of stay by what the average customer pays, and that's the average value of a customer.

For example, if a customer stays for 12 months and pays $100 per month, then their value is $1,200.

Your average lead value

Figure out your closing rate (or conversion rate) i.e. how many leads do you turn into tenants? Multiply that by your average customer lifetime value to figure out what your leads are worth.

Pro Tip: see which lead sources are converting the best. It may be that certain sources have a higher conversion rate, so those leads are worth more to you than a source that barely converts.

Typical Lease-up timeline

According to our panelists, it's typical to see a 3-4% increase each month, putting your facility at 36% after the first year, and 72% after the second.

Alternately, you can look at your lease up goals through the lens of your units, aiming for 20 units rented per month.

For Nick and StorageMax, they pro forma their economic occupancy at 85% with their sweet spot at 92%.