Is the self-storage facility down the street luring customers with its eye-catching sign, a charismatic manager or insanely low prices? To find out, you’ve got to properly shop the competition.
“It’s vital to know what you’re up against,” said Matthew Van Horn, vice president of operations at Cutting Edge Self Storage Management.
However, many self-storage managers don’t spend enough time checking out nearby facilities, Van Horn said. For instance, some managers might be a little too wrapped up in running their own facilities, he said.
If you lack up-to-date intelligence on what neighboring facilities are up to, here are three ways to check out your competition.
1. Track down your competitors.
Do you have an up-to-date list of competing facilities? If not, start by using a map tool and search for self-storage facilities close enough to win customers that should be yours. Try Google Earth Pro, which now is free, Van Horn said.
In general, you want to search in a three-mile radius around your facility, although that can vary by your location, Van Horn said. “In Manhattan, it might be blocks,” he said. “In Manhattan, Kansas, it’s miles.”
A general rule of thumb: In an urban area, it’s one mile, in a suburban area three miles and in a rural area five miles, according to Chris Sonne, manager of the Self Storage Industry Group at Cushman & Wakefield.
“In some very rural areas, it will go out as far as 10 miles,” said Sonne, adding that a trade area typically is defined as having about 50,000 people.
Watch for new competitors, too, Van Horn said. “It’s important to keep your eyes open,” he said.
You should regularly drive around your area, keeping tabs on any spots that would be appropriate for a self-storage facility, Van Horn added.
During the building phase, just monitor the facility, he said. “When the facility opens, go in and see how it’s being managed,” Van Horn said.
2. Regularly check prices.
It used to be sufficient to do monthly price checks, but now managers should shop the rates of their competitors more frequently, Van Horn said.
“Competitors’ pricing, especially with REITs, changes so quickly,” Van Horn said. “It could be changing weekly or even daily.”
When checking prices, don’t just look at a facility’s website, said Carol Mixon-Krendl, president of SkilCheck Services, which offers mystery shopping, training and self-storage facility audits. Instead, she said, look at:
- Website rates. The rates advertised on a facility’s website are likely to be a facility’s best prices.
- Self-storage aggregator rates. The rates a facility advertises on a self-storage aggregator, such as SpareFoot, may or may not be the same as the rates on the facility’s website.
- Phone rates. Phone rates probably will be slightly higher than website rates.
- Walk-in rates. Do occasional checks of walk-in rates. “Most stores, if you walk in, you’re going to pay their highest price,” Mixon-Krendl said.
If one of your competitors is slashing prices or offering a crazy special, you don’t have to match those deals—especially if your occupancy rate is high and you offer great service, Van Horn said.
“I’m not typically worried about one property,” Van Horn said. “But if you start seeing trends, you might have to adjust your pricing.”
3. Go to nearby facilities.
Once a year, you should hop in your car and pay a visit to each competing facility, Van Horn said.
Snap a few photos from outside the property, then go in and ask about renting a unit, Van Horn said. He typically tells the manager that his dad recently moved and needs storage.
Pay attention to how the manager acts and how the property looks—and ask a lot of questions, Van Horn said.
Here’s what you should know about your competitors:
- Does the manager treat you well and try to make the sale?
- Is the facility clean and well-maintained?
- Which amenities does the facility offer?
- What unit sizes are available?
- Is RV parking offered?
- Are climate-controlled units available?
- Are perks like free use of a truck provided?
Amenities might not change much from year to year, but people and pricing do, Van Horn said.
For example, you might visit a poorly run facility, then come back later to find it’s got a great new manager. “All of a sudden, they’re a better competitor,” Van Horn said.