How to compete with the new facility down the street

February 10, 2015 0
How to compete with the new facility down the street

When a shiny new competitor opens down the street from your existing, and older, self-storage facility, the first inclination might be to panic. But industry experts say older facilities can respond with a host of low-cost measures to ready themselves for the challenge.

Experts agree that the most important aspect of entering head-to-head competition is for the existing facility to be clean and tidy, no matter how old it is.

“Whatever you have must be impeccably clean—not almost clean, but impeccably clean,” said Anne Ballard, president of marketing, training and developmental services for Atlanta, GA-based Universal Storage Group, which has a number of older facilities as well as some brand-new ones in its 54-property portfolio. “Nothing is going to dissolve the trust of your customer faster than if the facility is dirty, has weeds growing or has a broken gate. It must be clean, well-maintained and well-organized.”

I can’t stress how important customer service is—you can get a lot of traction with that.
— Mark Beck, vice president of operations at StorCal Self Storage

Once the storage units and facility grounds are up to par, Ballard suggests considering a few minor upgrades to the lobby, such as replacing old flooring, installing flat-screen TVs and cameras, setting up an upscale coffee machine, and adding a small refrigerator for complimentary soft drinks and water.

These low-cost, high-impact touches can go a long way with customers, Ballard said. And it’s likely that any new competitor will offer these items—and much more.

Community ties

Mark Beck

Self-storage executive Mark Beck says older facilities should rely on goodwill.

Mark Beck, vice president of operations at Southern California-based StorCal Self Storage, which owns six properties and provides third-party management for others, said it’s important to remember that the existing facility has a leg up in terms of its history in the community and its relationships with current customers. In a head-to-head situation, it’s important to take advantage of those ties in various ways, such as tapping into your customer database for referrals.

“The advantage that the older facilities have is the goodwill that they’ve earned from past and existing customers,” Beck said. “They may have generations of customers and repeat business. Also, they are already part of the community, and people recognize their name.”

For tips on improving customer service, visit

Existing facilities can beat new competitors by standing out when it comes to customer service, experts say. This includes employing well-trained, presentable staffers who can deftly handle myriad issues and can help customers solve their needs.

Another key: Having someone—whether it’s an employee or a backup call center—available to answer the phone at all times, according to Anne Mari DeCoster, executive director of the Arizona Self-Storage Association.

“I can’t stress how important customer service is—you can get a lot of traction with that,” Beck said. “If the customer has a great experience, the age of the facility becomes irrelevant.”

Setting your rates

Anne Ballard

Self-storage executive Anne Ballard says marketing is critical amid new competition.

DeCoster said that once these basic factors are in place, a self-storage facility that’s going up against a new competitor doesn’t need to back off on rates. While it’s beneficial to offer incentives to new customers, you need not lose money in doing so.

One proven incentive is to offer the first month’s rent free or offer free use of a truck for move-in, according to DeCoster. After that, she said, operators immediately should go up to the “street rate” for rent. Spreading out discounts over several months gets customers accustomed to paying a lower rate, then gives them sticker shock when the price eventually goes up.

To help figure out whether your rental rates are too low, visit

DeCoster said regular rent increases—between 5 percent and 9 percent after the first nine months, and every five months after—should be imposed no matter the age of the facility or the competitive landscape.

“A lot of us are scared to increase rates, but the REITs publish formulas for rates, so all we have to do is be aggressive and follow the leader,” she said. “You can increase rates without losing customers. All of your own costs are going up, so you have to pass some of that on to the customer or you won’t stay in business.”

Marketing mojo

Postman carrying parcels

Highlighting acceptance of packages could set your facility apart from a new competitor.

Another critical element in staying competitive is to kick marketing programs into high gear.

Ballard said she thinks the most effective marketing comes through face-to-face interactions in the community, whether it’s attending chamber of commerce meetings or networking events, sponsoring a local sports team, or sending managers out to do door-to-door marketing in the neighborhood.

To learn more about self-storage marketing, download this free white paper:

Operators should market the aspects of a facility that makes it unique, such as wide driveways or package-acceptance services.

“Find the thing that makes you special, unique and different, and don’t think it’s just about price,” Ballard said. “We may be old, but we’re just selling air. If you have a new competitor coming out of the ground, you better make sure your marketing game is in top form. Keep your message out in front.”

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