Not too long ago, building a self storage facility with a wide variety of uncommon unit sizes was a popular development strategy. The thinking was that by filling a facility with odd sizes (8x8, 5x13, 6x11) the competition would have a difficult time conducting market research. Even having the inventory available to match pricing would be a challenge.
If you’ve acquired one of these facilities, you know first hand how difficult this amount of variation can be to manage. Even with today’s sophisticated facility management software and revenue management systems, creating and following so many one-off rules for such a small fraction of your inventory can be time consuming, and even cause problems for how you manage your standard unit types.
Without the level of technology in place to help automate this kind of inventory management, it helps to have broad strategies in place to effectively and competitively price your units.
One method some operators use is rounding down the pricing for odd size units to that of the closest standard unit(5x5, 5x10, 10x10).
This way odd size units are lumped in with standard units. Any rate changes to these units can be treated as though they are happening to one unit type. There is less to manage, but you’re also getting fewer dollars per square foot. Some experts estimate that you lose between 500-1000 sq ft for every 80,000sq/ft of rentable space using this technique.
Odd sized units average about 9% lower occupancy than standard sized units, so this strategy can help fill those less desirable parts of your inventory. The customer will also appreciate the value add.
Do Not Give In To Temptation
Practicing this kind of creative pricing may tempt you to round up. Never do this. There are a number of companies that have been involved in lawsuits in the past over advertising a unit that was not at least as big as it was said to be. It’s okay to give more, but it is not okay to give less.
Positioning The Upsell
If you would like to try to maximize revenue, another way to leverage unique sizes is to use them as up-sell options as often as possible. By packaging these units as “Premium” or “Top Shelf” options for smaller standard sizes, you can charge more appropriate rates while still framing the odd size unit as one more familiar to the renter. You’ll be surprised how often renters voluntarily make a more expensive choice when presented with the same unit at multiple price points.
5x5 = $88/mo
5x7 = $100/mo
5x5 Standard (Drive-up access, individually alarmed unit, 24-hour access) = $88/mo
5x5 Gold Unit (Drive-up access, individually alarmed unit, 24-hour access, measurement actually 5x7) = $100/mo
The Case For Standardization
No matter your strategy for dealing with oddly sized units, they highlight the need for the self-storage industry to adopt a set of sizing standards that owner-operators can use when developing future facilities. By standardizing its inventory, the self-storage industry can make construction, inventory management, revenue management and the renter experience smoother and more efficient. The end result will be happier customers and higher revenues.
Do you have strong feelings on self-storage? So does Peter. Email him directly at firstname.lastname@example.org or let him know in the comments.