Stay Competitive Using Industry Data | Self Storage Virtual Workshop

Gabfocus Episode 62 | Stay Competitive Using Industry Data

Learning how to understand industry data and trends can help everyone, including independent operators! However, when there is so much out there, how do you make heads or tails of it all? Join us as we share how to get the most out of this data and use it to make better, practical business decisions at your facility.

Featured Speakers: James McLean
Moderators: Tommy Nguyen & Melissa Huff

Category: Operations
Focus: Owners & Operators
Aired: July 25, 2024
Duration: 51:54

Overview

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

At 4:18, our expert discussed why using data is more important now in 2024 because of increased competition.
7:00, James discussed the trends they've noticed with the pricing strategies of REITs.
Starting at 9:10, James covered data you should be tracking, including data specific to your local community.
At 10:20, our guest talked about how to decide whether or not data will be helpful to your specific business.
14:50, our expert shared tips for keeping up with rates and how to find rates you should be comparing yourself to.
Around 21:50, James talks about the issue with promo hopping and how you can note these trends at your business.
At 24:05, our guest covers what data you can mine from your own business to use.
26:50, James touched on how to prioritize which data you should review and focus on.
30:50, our guest discussed how to identify industry and local trends.
34:50, James highlighted different sources you can use to access industry data.
At 40:35, our guest talked about how you can look up traffic count for the roads around your facility.
Starting at 43:10, James discussed the data you should be looking at if you're trying to buy or sell.
Around 45:10, our guest talked about the competitor data you should be paying attention to.
46:30 James answered the question of the week!

Resources

Gabfocus Takeaway

Competition is increasing, and the big players in the industry are aggressively lowering their rates. Should you be competing with their rates? Following industry data, and mining data from your own business and community, can help you make this decision. To stay competitive, you can use data to identify what matters to your target customers and how you can best appeal to them. From rate info and construction pipeline to traffic count and keyword volume, there is a lot of data out there that you have access to. Figure out what the main pain point at your business is, and then use that to guide your focus toward the data that will help your business the most.

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

Is using data even more important in 2024 than in previous years?
Which data should you be tracking or paying attention to?
What data or reports should you not bother with?
How often should you be checking these different sets of data?
How do you sort out the useful data from the noise?
How do you identify industry trends?
Which reliable sources can you go to for data summaries or trend reporting?
What are some basic ways you can use data to improve your business?
If you're looking to buy or sell, which data should you be paying attention to?
Which competitor data can you utilize to make better decisions?
What's the one piece of industry data that all storage owners should be paying attention to and why?

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%.