Finding and Setting Value
by Jennifer Jones, JKJ Marketing
While pricing is certainly covered in other articles, it’s a big topic. So we want to call special attention to it. Be sure to look at the other articles for revenue management and how to use software to improve your rates.
Many things should be considered when determining unit rates. “Price should be based on a combination of market rates, quality of the facility and amenities offered,” says Katie Cowen. “Price alone is no way to judge a storage unit because a 10’ x 10’ climate-controlled unit on the fourth floor with no elevator access has a completely different value than the same unit on the first floor right next to an entrance door.”
Sarah Cole says, “We base it off of availability and competitor pricing by size. If we are below 70 percent occupied on a size, then we may price it a little under a competitor, but if we are 100 percent occupied on a size, we may price it above other competitors.”
Mike Gately concurs, “We have found on existing facilities with stabilized occupancy, the most important factor in pricing is your property's occupancy on each unit type. We keep pushing rates higher on any unit type that has an occupancy of 90 percent or better. Even if a competitor is $20 cheaper on the same size unit, we will keep inching our rate higher, so long as our occupancy on that size is holding 90 percent or better.
“We also use premium location pricing on certain units. For example, say $10 higher on first floor than upper floors or $5 higher to be near the elevator.
“Manager training on setting rates is very important. A well-trained manager understands that most prospects are looking for overall value (not just low price), so the manager emphasizes the benefits when talking prices.”
“Don’t use a broad scope for pricing,” says Monty Rainey. “When a store is struggling with occupancy, you may have a tendency to lower prices. While this may be needed for some unit types, you may have other types that are more than 90 percent occupied and those rates may even need to be increased. Each unit size and type is its own product and should be based on supply and demand, not on overall store occupancy.”
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