It seems like wherever you go and no matter what you are shopping for there is likely going to be a discount of some kind being offered. No matter what you are selling, there is some way for it to be discounted. The art of discounting a product—if done properly-- can mean an awful lot to your bottom line whether you’re talking about a department store, a grocery store, or the local self storage facility.
For department stores it’s easy; when clothes are out of style or season they get put on the clearance rack and discounted. Grocery stores will do the same with food that is about to expire as well as have people become ‘members’ so that they can be eligible for further discounts. In the self storage industry it is a little different.
While the department store and grocery store are places that will always be restocking their shelves with more products, a self storage facility is working with a limited amount of its product, space. Ideally, the facility will operate at or near capacity eventually. Discount too many units along the way and the facility could end up being not nearly as profitable as expected. However, at the same time if handed out right discounts can bring people in and get them to stay longer.
Discounting a self storage unit depends heavily on the scenario in which a prospective tenant is inquiring about one. One of the most common occasions in which discounts are given is via the phone. Those customers are comparison shopping and may likely need a little extra incentive to choose your facility over another.
On the other hand, if you have the prospective tenant in store they likely will not need a discount. Since they have already made the decision to come in, they want to rent already. In those situations a discount can be used in order to get them to agree to a longer contract or entice them to go for a larger unit.
How much you choose to discount will likely depend on how long they are looking to use one of your self storage units for. You don’t want to offer too good of a discount to someone who plans on only being there a couple of months; you will not make any money! Now if they are thinking they might be around for a few months or longer than discounting a half a month’s rent to a full month is not uncommon.
The trick to doing it is largely recognizing the necessity for it. If you have not had much traffic in your office and you’ve got plenty of open units then you may want to offer one up fairly quick to insure they don’t change their minds. Of course, if you are near capacity and demand has been reasonably high then you don’t want to give one at all.
Discounts can be a great marketing tool and an even better one for salesmen. However, it is always important to keep the ultimate end goal in mind—renting out every space in the facility for as much money as possible.
Sources Used:
“The Pros and Cons of Discounting.” Texas Self Storage Association; January/February 2012.
"Discounting Ruts: Are the Costs Too Deep?" Mini-Storage Messenger; September 2011.