15 Jul 2024
First, let's think on the definition of "advocate":
"a person who actively supports or favors a cause".
Synonyms of "advocate":
Generally, it is important for a business to have a good standing with their customer and also still create a profit. If they do, then there is an understood value for the customer and the business owner to continue to do business.
Of course, there is always another way to do business. One that is selfish and destructive to the industry and violates certain principles in the business world, which ultimately violates the trust of the consumer. Once a customer understands they have been taken advantage of or swindled, they will learn to to go elsewhere.
Question is..."Where do you fall into this equation?" Another quote comes to mind. "Treat others as you wish to be treated". If we really followed through living upon these principles, would teaser rates exist? Are you going to be an advocate for the customer?
What are "teaser rates"? Self-storage teaser rates are a reduction in the monthly rental rate to attract new customers to your self-storage. These rates are substantially lower than the "street rates" and are offered for a limited initial period, such as the first month or the first few months of the rental agreement.
Another major part of "teaser rates" that customers are not always told is that "regular pricing and any additional fees that might apply once the promotional period concludes". Unfortunately, its often hard to even get a real answer from the representative when the promotional period will end. The representative often sidesteps that question. Based upon what I have seen recently, is that the rates double, triple or even more at a very fast rate of increase. This could be referred to as a "Bait n' Switch" for the long term customer.
Who benefits the most from a teaser rate? Primarily, the short term customer. Yes, a facility focusing on ramp-up will gain customers quickly and appear to be adding occupancy. They will add occupancy, but not exactly matching that with the proper income. The gamble for the facility is a fair majority of the customers will stay longer and the facility will recoup their losses when the teaser rate ends. Often, the facility creates a revolving door of short term customers at a low rate that significantly effects their bottom line. The owner may be in some genuine shock when they review their P&L. This approach can also lead to a higher delinquency as the low rates attract the wrong type of customer. One that is only searching for a cheap rate to put their items into for a month or two.
The "Bait 'n Switch" reality comes into play when the customer stays longer than anticipated and they get slammed with the real rate, but are not able to just pick up and move to a different facility or to their new home. The honeymoon is then over and the customer is frustrated. This process leaves a bad feeling for customer and taints the entire market.
There has been a growing division on this matter. One side creates a value for the customer and charges accordingly. They create a rate that makes sense for the market and then builds a long lasting customer experience via great customer service and a clean and top-notch facility. For example, Storage Authority provides a rate lock guarantee that the monthly rate will not increase for at least a year. The other side may still provide a quality service and facility, but chooses to use "teaser rates" and then later slam the customer with their new massively increased rate. This method is often utilized by REITS. Not only does it negatively impact the customer, but it damages the entire local market.
Teaser rates create a false market of what storage rates really are in an area and cause customer dissension. Self-storage owners have built a reliable industry for many investors over the last many decades, but those who choose to spoil the market and loyalty to the customer are tainting the industry. Self-storage locations really need to understand the customer is truly the "BOSS" and they need to be an advocate for the customer. Self-storage owners can still provide a great a experience and provide sensible rates to create profits. This will maintain a solid, long-term customer base, protect the rates in the market and maintain sound profits for investors and the long term protection of the self-storage industry.
Storage Authority Franchising is all about owning your own local self-storage business, supported by professional systems and expertise. We like to say, "You're in business for yourself but not by yourself." If self-storage is on your mind, don't hesitate to reach out to Drew Case at Direct: 513-582-0125 or Drew@StorageAuthority.com to learn more about the Storage Authority Franchise opportunity. Your self-storage journey awaits!
