Given the current economy, finding ways to boost the bottom line seems to be on everyone’s mind. But how, exactly, do you do that? Let’s assume that you’ve already tried every promotional lure imaginable; still, the renters simply aren’t biting for you. Should you tighten your belt and just wait out the slump? Absolutely not! Now more than ever, it is important to find new ways to earn more from the business you have now. So let’s get started and see just how you might be able to achieve that goal!
Do you remember when self-storage rentals were so profitable that it was “distracting” to bother with ancillary income—what many dismissed as “just five percent” of their revenue? Well, many of those people are now asking themselves two questions:
1. If ancillary sales can generate five percent without any effort, how much could those sales generate with a little help?
2. What if we had ancillary sales that didn’t depend on rentals traffic?
Part of the problem is that we tend to lump everything (insurance, locks, boxes, truck rentals, etc.) into one category: ancillary sales. Some of these revenue streams, such as insurance and locks, are obviously derived from the rentals. But others, such as boxes, tape, packing materials, and truck rentals, may or may not be a result of rentals. There are people who may not need storage space but still need those products or services.
Another part of the problem is that as long as you were satisfied with “just five percent,” your employees were, too. You didn’t strive to bring in more customers for those ancillary products and services, and your managers didn’t strive to sell them to your rental customers. The net result was that piddling five percent.
Now that we have reviewed the problem, let’s discuss ways you can arrive at a solution.
Five Steps To Increased Revenue
1. Take those sales as seriously as rentals. The first step is to adjust your business perspective. Don’t devalue any revenue source. One owner calculated that his retail sales revenues equaled revenues from eight occupied units. So, begin by dropping “ancillary” from your vocabulary and applying good business sense to retail just as you do to rentals.
2. Take a good look at your “store.” That’s right: store. If you’re selling retail, it’s not an office, it’s a store, and it should look like one. If your product selection is complete and your display is professionally planned with proper signage, your sales per customer will increase. It’s been demonstrated time after time. To get professional help, ask your supplier. They should know how to do it, and it should be a free service.
3. Train your managers to sell. This can have the most impact in the short term. Confident managers are more extroverted, and it’s a fact that extroverted managers sell and rent more. All most managers need is some simple sales techniques and an understanding of their products. Again, your supplier should be able to provide training materials, webinar training sessions, and assistance building a customized plan to suit your business’ individual needs. And why shouldn’t it be free, too? After all, the more you sell, the more they sell, right?
4. Use both passive and active advertising. Passive techniques include outdoor signage and Yellow Pages listings. Consider this: every person who is moving may not need storage space, but they will be searching for boxes. So where would they look in a directory? Under “Self-Storage?” It’s surprising how often owners never think of buying cheap listings under “moving supplies” and “boxes,” yet they pour dollars into self-storage display ads.
Active techniques (sometimes referred to as direct response) can pitch other products and services that increase traffic. Direct response can include local ads and mailings, but don’t overlook simple opportunities like door hangers on your units and invoice stuffers. Furthermore, when was the last time you sent a mailing to your past renters list?
If advertising has been a “do-it-yourself” activity for your business, it may be time to take it more seriously. Consider hiring a professional ad agency. Interview them, talk to local businesses, and ask candidates to provide a preliminary plan.
5. Expand your products and services. Let’s think outside the unit. Everything you sell doesn’t have to be storage-related. Some facilities make a good buck selling propane for grills. Others offer parcel shipping service. Keep in mind that those retail customers will have visited your site, met your people, and are primed to be your rental customers (or referrers) of tomorrow. So, you may rent units, but if you can “think outside the unit” you may surprise yourself with creative ways to make more money. If you need more retail ideas ask your supplier or contact us.
Why Are You in Business?
The story goes that when America’s airlines were “just getting off the ground,” railroads dominated the transportation industry. They easily had the capital to get into the airline industry on the ground floor, but they declined because air transport wasn’t their “core business.”
What is your “core business?” Is it renting storage space, or is it simply making more money? Answer those questions, and then re-examine all of your revenue streams from that perspective.