January 20, 2012 § Leave a comment
The debate over aggregators is heating up in the self storage industry. Clearly, a healthy discussion is underway.
As I think about it however, I wonder if the real problem is not aggregators, but what I would like to call a “culture of discounting”. With the growth of excess capacity, coupled with the sluggish economy, operators have increasingly turned to discounting to rent units. In much the same way as foreclosures and short sales have disrupted the real estate market, discounting has disrupted ours.
We have become a nation of consumers where “price is king”. Think Walmart. They dictate price to such a degree than China has difficulty competing. Yet, this begets a vicious cycle where prices are expected to be increasingly discounted. Self storage has, unfortunately in my view, been caught in this cycle.
Whether operators offer discounts directly or through third party aggregators, the result is largely the same — less money.
Self storage operators need to market VALUE not just price.
Think about how you can sell the VALUE of your facility, rather than succumb to the knee-jerk habit of discounting.
January 11, 2012 § Leave a comment
Many of you may have heard of the brewing brouhaha over the growth of aggregators marketing storage units for operators, such as Spare Foot and others. Sort of like Expedia is to the airline business.
For many, aggregators are a necessary evil to help move excess space; to others, they are an unnecessary expense that reduces an operators bottom line. Better that you should market your units yourself, than use a third party to do it.
If you remember, companies like Expedia became possible when the airlines eliminated travel agency fees. Consumers were forced to shop many airlines sites individually. Time consuming. Inconvenient. Kayak and others filled a necessary void.
Is this true of self storage? Who knows? I offer no opinion. Each operator needs to figure out the value of aggregators on their own. However, as the aggregators grow they may become increasingly necessary to a successful marketing effort.
To my mind, a more harmful trend is discounting. Discounts offer no value and they go right to the bottom line. In the near future, I will be discussing ways to attract and keep customers without discounting.
January 2, 2012 § Leave a comment
With this post, we come to the end of my series on having less stress and making more money in self storage. Over the past weeks, diverse topics like plain language contracts, bailments, reaching out to your competitors and the like have been discussed.
My final topic is one that is both obvious and makes sense, as well as necessary to draw the “less stress” theme together. Simply put, be sure that you carry adequate insurance.
Less stress is what insurance is all about. You pay someone else to shift a risk from you to them. Of course, you have to pay for it, but you save the worry.
In many instances, insurance is required by your lender. These you already (hopefully) have. But what about other, optional coverages. Do you have directors and officers coverage to protect your Board? How about coverage in case your staff improperly auctions a customer’s goods? Coverage options for your tenant’s property in case of fire, etc? All are important to your business and will help reduce stress.
There are a number of insurance firms specializing in coverage for self storage operators. Reach out to them. See what they offer. Compare.
Having adequate and diverse insurance coverage will mean less stress and more money in self storage.