Should You Focus on Customer Retention or Customer Acquisition?

Krista Diamond | November 2, 2017 @ 10:42 AM

It’s a common self storage dilemma. You want to increase your occupancy, but you’re not sure whether your marketing efforts are better spent on retaining tenants who already rent storage units or acquiring new ones. Because so many of your customers use self storage temporarily to help with moving or seasonal clutter, your common sense might tell you that trying to retain these tenants is a waste of time.

But let’s set your common sense aside for a moment and look at the facts.

The average cost of acquiring a new customer is 4-10 times more expensive than the cost of retaining an existing one. Despite this, a recent survey showed that 44% of businesses reported focusing more on acquisition. These methods of acquisition range from simple and old-fashioned to digital and trend-based. For your self storage business, these methods usually include that sign outside of your facility advertising move-in specials along with direct mailing, social media and web banners.

Take a look at the content of your advertisements. Do most of them target new customers? The truth is, it’s actually easier to sell a service to an existing customer rather than a new one—especially if the customer already likes your business. A tenant who is already having a positive experience at your self storage facility is more likely to consider a new amenity, like an upgraded storage unit with climate control, than someone walking in from the street who has no established opinion of you or your business. These existing tenants are a huge untapped source of revenue for your self storage business, simply because they’re easier to sell to. They can earn you money by renewing their leases, buying moving supplies and even referring you new customers.

So now that we’ve established just how profitable it can be to keep customers at your storage facility, let’s tackle the trickiest question of all: How do you retain them? Here are a few surefire ways to do it:
  • Say thank you. Yes, this is obvious, but sometimes the obvious things are the ones we forget. Take the time to let existing self storage tenants know that you appreciate their business. You can do this in person, by email, on social media or by mail. You can even host a customer appreciation day or offer something for free, like an upgraded lock, just to say thanks.

  • Offer a new service. We don’t have to tell you that the self storage industry is booming. Reassure your existing self storage tenants that you’re the best facility in town by offering a new service, preferably one that no other storage facility has. This could be something as big as RV/boat storage or as simple as free wifi. Other services include moving supplies, extended hours, automated self storage or a business center. The amount of money you want to spend is up to you, but you can expect a return on even the smallest investment.

  • Focus on curb appeal. Upgrade your property to make it a place that tenants enjoy coming to. You can plant flowers, spruce up your office, focus on having a really, really nice public restroom. Even offering free baked goods sets you apart as the place that always has free cookies—and who doesn’t love that place?

  • Customer service. It’s much easier for a tenant to stray if they’ve never seen your face. Make sure that you and the rest of the team at your storage facility are warm and welcoming both on the phone and in person.

  • Respond to online reviews. Customers like to know that their opinions are valued. Take the time to respond to online reviews from tenants. Say thanks when you receive a good one and promise to do better when you receive a bad one.

  • Be smart about raising rent. Raising rent is the reality of any self storage business, but you can lose tenants by doing it the wrong way. Make sure you properly inform them and don’t get greedy and raise rent more than you need to.

  • Offer exclusive loyalty discounts. Discounts always seem to apply to new tenants, so why not focus on customer retention by offering something to loyal tenants? You can offer a renewal discount or even a loyalty program which gives them access to exclusive discounts on truck rentals, moving supplies and other amenities.

Now that you understand the power of customer retention, it’s time to unleash it and keep your occupancy rate up. What are your favorite customer retention strategies? Let us know in the comments!

Krista Diamond

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