Your customers are mainly seeking self-storage units. But according to Inside Self-Storage, they likely have other needs that could drive up the value of their rental—if you can meet them. Offering complementary products and services allows you to capture additional revenue.
Additional income can include retail products such as moving and packing supplies, tenant insurance, and specialty storage including vehicles, wine, and records.
The clearest reason to explore add-on profit centers is to generate more money for your self-storage business. In a best-case scenario in which a facility manager (or call center) is particularly great at selling, the owner can expect to see as much as a 10% increase in income.
Let’s say we have a 300-unit facility with 70% occupancy and an average street rate of $135 a unit. If we can generate an additional 8% in sales through add-on products and services, we can gross upward of $27,000 a year.
So, now we know that offering storage-related products and services through your self-storage store is just good sense. But you have to be able to sell them! One of the main rules of retail is to never let a customer leave your store to buy the same product or service from someone else. Convince them you are their best and most convenient choice.
Upselling starts with listening. It’s understanding customer needs and then matching those needs with the products and services you offer.
The easiest way to upsell your add-on merchandise to every self-storage customer is to have a conversation with them. It's amazing how many facility managers don't ask these basic questions:
- What are you storing?
- Where are those items now?
- When and how do you expect to move them?
The answers to these questions are key. They uncover clues that’ll help you suggestively sell your merchandise. For instance, if the tenant says they’re moving tomorrow but it’s supposed to rain, you can suggest products such as mattress covers and furniture pads that’ll prevent their belongings from getting wet.
When you ask what your customers need to store, they might say grandma’s collectible Hummel figurines. You immediately follow up by asking how they plan to pack these items safely. You can then offer them newsprint, bubble wrap, foam and boxes. You can even demonstrate the proper way to wrap them. If you ask questions and really understand the customer's needs, it's very easy to sell!
When determining which items to carry in your self-storage retail center, be conservative, especially when opening in a new market. Stick with the core products such as boxes, tape and basic packing materials. Set a probationary period and see how much money comes in from these sales. A good manager can increase facility revenue by about 1.5% with this merchandise.
Tenant insurance can be a very profitable add-on, generating $8 or $9 per customer, or 5% to 6% of store revenue. That percentage can go up if your staff is adept at discovering tenants’ needs and matching it to a higher tier of coverage.
Also, reach out to local moving companies, as they use a lot of boxes. While larger businesses will be well-stocked with these products, smaller ones could use a backup supply. Like any small business, they're trying to keep costs down. If they can buy boxes as needed from your self-storage facility, it’ll save them from needing additional warehouse space. They may even rent a unit to hold all their stuff!
You can learn more about the above information at Inside Self Storage.