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Increase Your Self-Storage Revenue and Retain More Cash

Written by Chuck Vion on December 05, 2016 under Industry Webinar & Revenue Management & Pricing & Cost Analysis

Increase Your Self-Storage Revenue and Retain More Cash

Article Contributions by: Magen Smith, CPA - Owner at Magen Smith CPA “Self Storage CPA”

Revenue management is not just for the REIT’s and large companies. Every self-storage operation needs to have a plan in place to manage revenue and that plan needs to be more detailed than sending a rate increase letter on the tenant’s anniversary date.

A proper revenue management program includes the following steps:

  1. Getting prepared
  2. Finding your zone
  3. Assessing the market
  4. Verify the data
  5. Assessing demand
  6. Adjusting street rates
  7. Preparing staff
  8. Raising rates on current customers
  9. Analyzing data and tweaking the plan
  10. Premium pricing options

Getting prepared is the first step to implementing a revenue management program. Many self-storage owners are fearful of increasing their prices and worry that existing customers will move out. Owners have worked hard to increase occupancy and are hesitant to rock the boat, so to speak.

People tell themselves stories about what will happen if rates are increased:

  • Everyone will move out.
  • Tenants will feel that the increase is unfair.
  • The town will talk badly about my business.

These are just a few stories owners tell themselves about raising rates. Overcoming these myths and becoming comfortable with revenue management and raising rates is the first step to making more money and increasing the value of the business.

Finding your zone and assessing the market is the process for learning your business and your competition. SiteLink customers can find their zone by running a marketing report which shows where customers live. Assessing the market is an in depth process of learning the strengths, weaknesses, supply and prices of competition and the owner’s business. It takes some time but will provide the owner with a wealth of information to make smart decisions on pricing. 

Verifying data is accomplished by running specific reports from your management software. Making sure the information in your software is correct must happen before any pricing decisions can be made. It takes only a few minutes to run the reports and feel confident that all the data is right.

Making price decisions solely on the market leaves money on the table. Smart self-storage owners assess their demand and track their conversion rates. There are multiple methods to begin tracking demand that any self-storage owner can do. You can make this process as basic or advanced as you like to collect the right data.

Self-storage owners who follow these steps find it very simple to adjust street rates, prepare staff and raise rates on current customers. They have spent time gathering and understanding all of their data so they can raise rates confidently and fearlessly.

Once a revenue management processes is implemented, self-storage owners should analyze their data and tweak the plan again and again to make it work correctly for their business. Not all self-storage facilities are the same, so a one size fits all revenue management approach rarely works. Often times premium pricing options are discovered through the revenue management process, bringing even more revenue to the business.

Revenue management does not have to be an overly complicated process. With a little bit of analysis, any company can implement these steps and have a stronger business.

Article Contributions by: Magen Smith, CPA - Owner at Magen Smith CPA “Self Storage CPA”

Want To Learn More?

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Watch the on-demand webinar Price With Confidence: Revenue Management Made Easy now. A strong revenue management program is critical in a self-storage business. Learn how to overcome fear, price with confidence and increase the value of your facility.

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