How to Drive Self-Storage Demand: A Comprehensive Strategy for Owners and Operators
A Call to Evaluate Your Self-Storage Business
In today’s competitive self-storage landscape, maintaining high occupancy rates and growing revenue is more challenging than ever. To drive self-storage demand effectively, operators must navigate rising new facility completions and increasing vacancies, which signal heightened supply pressures and softening demand. Whether you’re an experienced operator or new to the industry, understanding the factors driving demand and how to effectively leverage them is crucial. Before diving into strategies, it’s essential to take stock of where your business currently stands.
Are you fully utilizing the resources at your disposal? Are your sales and operations as efficient as they could be? These are critical questions that self-storage operators must answer to thrive in this fast-evolving industry. We invite you to take our Storage Business Performance Check survey to perform a health check of your facility management practices. This survey will provide immediate insights into your operational strengths and highlight areas that could benefit from strategic adjustments. With these insights, you’ll be better prepared to implement the strategic advice outlined in this post.
Table of Contents
- Understanding What Drives Demand in Self-Storage
- Expanding Your Reach: A Holistic Omnichannel Approach
- Staying Ahead in Fierce Competition
- Converting Leads to Rentals
- Boosting Tenant Retention
- Market Trends and Competitive Landscape
- Enhancing Sales Through Efficient Call Center Management
- Future Opportunities and Emerging Trends
- Conclusion: Take Action with a Storage Management Health Check
Source: 2024 Self-Storage National Investment Forecast by Marcus & Millichap
1. Understanding What Drives Self-Storage Demand
The 6Ds of Self-Storage Demand
To effectively manage and grow your business while driving self-storage demand, it’s crucial to understand the key drivers of demand. At Cubix Asset Management, we refer to these as the 6Ds:
- Downsizing: As baby boomers retire and move into smaller homes, the need for self-storage increases. Downsizing households require additional space to store excess furniture, memorabilia, and other items that no longer fit in their new living arrangements.
- Decluttering: In the age of minimalism, many people are decluttering their homes. However, they are not always ready to part with their possessions. Self-storage provides a convenient solution for those looking to clear their living spaces without permanently getting rid of their belongings.
- Dislocation: Life events such as job relocations, temporary assignments, or natural disasters can create sudden and immediate demand for self-storage. People need a place to store their belongings while they transition to a new location or rebuild their homes.
- Density and Space Limitations: Urban living often means limited space. High-density areas, where homes and apartments are smaller, drive the need for additional storage options. Self-storage facilities located near urban centers can capitalize on this demand.
- Divorce: Divorce often leads to the splitting of households, creating a need for storage space as individuals move into smaller living spaces or temporarily need a place to store their possessions.
- Deployment: Military deployment or extended travel can result in the need for temporary storage solutions. Service members and travelers often require secure places to store their belongings until they return home.
Understanding these demand drivers is only part of the equation. Demographics also play a significant role in shaping who rents storage units. For example, younger generations, like Gen-Z and Millennials, are more likely to be female renters, while older generations, such as Gen-X, Boomers, and the Greatest Generation, tend to have a higher proportion of male renters in self-storage. Recognizing these patterns can help tailor your facility’s marketing strategies to resonate with specific generational preferences and needs.
Self-Storage Demand by Generational Gender
While demographics reveal who rents storage units, understanding what they store provides practical insights to refine your strategy. This combined knowledge helps align storage options and marketing efforts with customer needs, ensuring your facility meets expectations and stands out in the market.
2. Expanding Your Reach: A Holistic Omnichannel Approach
Diversify Your Target Demographic
Creating a robust pipeline of leads is essential for sustaining and growing your self-storage business. Cubix’s approach emphasizes a holistic prospecting process that meets potential customers wherever they are in their journey. Here’s how you can diversify and expand your target demographic:
- Urban Renters and Small Businesses: Urban areas are characterized by limited space, making self-storage an ideal solution for both residents and businesses. Highlight convenience, accessibility, and amenities like enhanced security systems and flexible rental terms. Promote the benefits of storing seasonal items, personal belongings, business inventory, or equipment in a secure, nearby facility. For urban renters, the rising popularity of climate-controlled units offers an attractive option for sensitive items like antiques or electronics.
- Suburban and Rural Renters: Emphasize security and ease of access. These customers often need space for recreational vehicles, farming equipment, or home renovation materials. Offering amenities like large vehicle storage and 24/7 access can make your facility more appealing to this demographic. The growing trend of suburban expansion and family-focused rentals suggests demand for larger units to accommodate seasonal items and extra furniture.
- Remote Workers and Home-Based Businesses: With the rise of remote work and small-scale e-commerce businesses, there is increasing demand for space to store work-related items. Offering flexible lease terms and proximity to residential neighborhoods can make your facility appealing to this growing demographic. Digital accessibility, such as online reservations and automated billing, further enhances convenience for this tech-savvy audience.
- Temporary Needs for Event Planners and Seasonal Businesses: Cater to businesses or individuals needing temporary storage for event equipment, seasonal retail stock, or decorations. Highlight short-term contracts, easy access, and secure units for these renters. Consider marketing heavily during spring and summer, when seasonal demand peaks due to moving, renovations, and event schedules.
- Multi-Generational Households: Families living in multi-generational homes often face space constraints. Position self-storage as a solution for storing shared household items, heirlooms, or additional furniture. Larger unit sizes are particularly appealing for families managing multiple households under one roof.
- Eco-Conscious Renters: Attract environmentally conscious renters by showcasing eco-friendly initiatives like solar-powered facilities, LED lighting, or recycling programs. These efforts resonate with younger audiences prioritizing sustainability and can be a key differentiator in competitive markets.
Improve Online Presence & Marketing
In the digital age, your online presence is as important as your physical location. At Cubix, we leverage data science and smart marketing technology to drive leads through a multichannel approach:
- Search Engine Optimization (SEO): Ensure your website is optimized for search engines with relevant keywords, quality content, and fast load times. This not only improves your ranking on search engines like Google but also makes it easier for potential customers to find your business.
- Pay-Per-Click (PPC) Advertising: Target your ads to specific demographics and geographic areas to attract potential customers who are actively searching for storage solutions. This approach ensures that your marketing budget is spent efficiently, reaching only those who are most likely to convert.
- Social Media Marketing: Engage with your audience on platforms like Facebook, Instagram, and Yelp. Use targeted ads to reach potential customers based on their interests and behaviors. Social media is also an excellent platform for sharing customer testimonials, showcasing your facilities, and running promotions.
- Google Business Profile Optimization: Ensure your business profile is up-to-date with accurate information, high-quality images, and positive reviews. This increases your visibility in local searches and makes it easier for potential customers to choose your facility over competitors.
- Hyper-Targeted Campaigns by Generation
The 2022 self-storage insights highlight generational differences in priorities, showing that Gen-Z values security alarms, anytime access, and proximity for convenience and safety. Millennials prioritize pest control, climate control, and air conditioning, focusing on maintenance and comfort. Gen-X seeks a balance between security and functionality, while Boomers emphasize safety and reliability, such as fire sprinklers and pest control. Targeted campaigns tailored to these preferences—tech-enabled security for Gen-Z, clean climate-controlled spaces for Millennials, advanced security features for Gen-X, and safety measures for Boomers—can drive stronger engagement and conversions.
Understanding Generational Preferences
The data below provides a detailed breakdown of the top features each generation is most willing to pay extra for. By leveraging these insights and tailoring campaigns to specific preferences, operators can create compelling offers that resonate with their audience and boost conversions effectively.
Source: SSA’s 2023 Self-Storage Demand Study.
Encourage and Manage Reviews to Get More Referrals
Customer reviews play a significant role in attracting new tenants. Potential customers are more likely to trust a business that has positive reviews and high ratings on platforms like Google and Yelp. At Cubix, we provide tools to help you manage these reviews effectively, ensuring that potential customers see your facility in the best possible light.
- Encourage Positive Reviews: After a customer has had a positive experience, encourage them to leave a review. This can be done through follow-up emails, in-person requests, or by offering a small incentive.
- Respond to Reviews: Engage with your customers by responding to their reviews. Whether the feedback is positive or negative, a thoughtful response shows that you value customer feedback and are committed to improving your service.
- Monitor and Manage Your Online Reputation: Regularly monitor review sites and social media platforms for mentions of your business. This allows you to address any issues quickly and maintain a positive online presence.
3. Staying Ahead in Fierce Competition
Developing a Competitive Market Strategy
The self-storage industry is increasingly competitive, with large REITs (Real Estate Investment Trusts) like Public Storage and Extra Space Storage leading the charge. To stay ahead, smaller operators need to be strategic:
- Leverage Technology: Use tools like Cubix’s AI-driven tenant acquisition and dynamic pricing strategies to compete with larger operators. Technology can level the playing field, allowing you to offer services comparable to those of the big players.
Case Study: Rohnert Park Facility QuickView
Rohnert Park facility implemented Cubix’s AI-driven marketing strategies to streamline tenant acquisition. By automating customer interactions and utilizing dynamic pricing, Rohnert Park facility was able to improve operational efficiency and significantly increase its occupancy rates in competitive markets.
- Highlight Unique Selling Points: Differentiate your facility by focusing on what makes you unique. This could be superior customer service, specialized storage options, or involvement in community events.
- Focus on Customer Experience: Providing exceptional customer service is one of the best ways to retain tenants and generate referrals. Cubix’s 5-star service management ensures positive customer interactions, leading to higher retention rates.
Strategic Use of Space and Amenities
Maximizing the use of your facility’s space is key to maintaining high occupancy rates:
- Flexible Unit Sizes: Offer a variety of unit sizes to cater to different customer needs, from small lockers to large storage spaces.
- Enhanced Amenities: Consider offering advanced security with individual unit alarms, 24/7 surveillance cameras, electronic gate access, on-site security personnel, motion-activated lighting, personalized access codes, and a fenced and gated perimeter to ensure your belongings are safe and secure.
4. Converting Leads to Rentals
Improve Website Functionality
Your website is often the first point of contact for potential customers. A well-designed, easy-to-navigate website can significantly improve conversion rates:
- Online Reservations and Payments: Allow customers to reserve units and make payments online. This convenience can be a major selling point, especially for younger, tech-savvy customers.
- Integrated Customer Experience: Ensure your website integrates with your facility management software for real-time updates on unit availability and pricing.
Automated Marketing and Analytics
Use data-driven insights to refine your marketing efforts:
- Email Campaigns: Send targeted emails to past customers, offering them discounts or reminding them of your services.
- Analytics Tracking: Use tools like Google Analytics to track customer behavior on your website. This data can help you identify areas for improvement and optimize your marketing strategy.
5. Boosting Tenant Retention
Strategic Pricing and Revenue Management
Balancing rent increases with tenant retention is a delicate act:
- Dynamic Pricing: Use market data to adjust your rates in real-time, ensuring you remain competitive without sacrificing revenue.
- Regular Communication: Keep tenants informed about upcoming rate increases and any changes to their service. Transparency builds trust and reduces the likelihood of turnover.
Operational Efficiency
Streamlining your operations can reduce costs and improve tenant satisfaction:
- Automated Workflows: Implement systems that automate routine tasks like billing, collections, and tenant communication. This allows your staff to focus on providing excellent customer service.
- Efficient Use of Technology: Use property management software that integrates with your other systems, providing a seamless experience for both your staff and your tenants.
6. Market Trends and Competitive Landscape
Understanding and adapting to current marketing trends is crucial for staying competitive in the self-storage industry. Here’s a concise overview of key insights*:
- Sector Consolidation: The self-storage industry is experiencing consolidation, with REITs like Extra Space Storage and Public Storage expanding through strategic acquisitions. These large operators benefit from economies of scale, allowing them to implement advanced technologies and dynamic pricing models that adjust rates in real-time based on market demand.
- Increased Competition: As REITs dominate the market, competition intensifies. However, this also presents opportunities for smaller operators. By offering personalized service and focusing on niche markets, independent operators can differentiate themselves. Leveraging technology to streamline operations and enhance customer experience can help smaller facilities compete effectively.
- Opportunities for Growth: Independent operators can thrive by targeting underserved areas and offering specialized services that larger operators may overlook. Focusing on local expertise and building strong customer relationships can also give smaller facilities a competitive edge.
By staying informed about these trends and strategically positioning your facility, you can navigate the competitive landscape and capitalize on growth opportunities in the self-storage industry.
7. Enhancing Sales Through Efficient Call Center Management
In today’s fast-paced environment, immediate and professional customer service can be the difference between a closed deal and a lost opportunity. A well-managed call center is more than just a customer service hub—it’s a critical component of any strategy to close deals quickly and efficiently.
- Streamline Operations: By handling all inbound and outbound communications, processing rentals, and managing payments, a call center allows your onsite staff to focus on the essential tasks of move-ins, move-outs, and maintenance. This shift in focus not only enhances operational efficiency but also significantly increases your booking rates.
- Maximize Lead Conversion: Every call is an opportunity. A call center staffed by highly trained sales specialists who understand the intricacies of the self-storage industry is designed to convert inquiries into rentals. Ensuring that no lead goes unattended maximizes your facility’s revenue potential.
Cubix Call Center provides this supreme service to boost your storage business. Read more about our call center to discover how we can help you close more deals and grow your revenue.
8. Future Opportunities and Emerging Trends
Population Shifts and New Markets
Keep an eye on population trends to identify new opportunities:
- Migration Patterns: As people move to suburban and rural areas, there is an increased demand for self-storage in these regions. Facilities in high-growth states like Texas and Florida are particularly well-positioned.
- Urbanization Trends: Conversely, urban centers continue to face space limitations, driving demand for conveniently located storage solutions.
Technology and Innovation
Staying ahead of technological advancements is essential for maintaining a competitive edge:
- Smart Access Control: Implement systems that allow for remote access and monitoring, providing convenience for tenants and reducing the need for on-site staff.
- Automation: Use automation to streamline operations, from online reservations to payment processing and customer communications.
Conclusion: Take Action with a Storage Management Health Check
Driving demand in the self-storage industry requires a comprehensive, strategic approach that addresses the unique challenges and opportunities of your market. By understanding the key drivers of demand and implementing targeted marketing, pricing, and operational strategies, you can position your facility for sustained growth.
As a next step, we encourage you to take our Storage Business Performance Check survey to assess how well your practices align with efforts to drive self-storage demand. This will provide you with a personalized analysis of your strengths and areas for improvement, helping you to refine your strategy and achieve your business goals.
At Cubix Asset Management, we are here to support you at every step of your journey. Whether you’re looking to optimize your current operations, expand your facility, or stay ahead of market trends, our team of experts is ready to help you succeed. Call us today at (925) 489-1114.
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Reference
*http://cubixassetmanagement.com/wp-content/uploads/2024/02/2024-Self-Storage-National-Investment-Forecast-by-Marcus-Millichap.pdf
