How and when to increase your storage rent?

The need for ‘extra space’ for people is making businesses open many storage facilities. While many
business owners have already ventured into this opportunity, what confuses them the most is the
pricing of their space. Many storage facility owners are not sure as to when and how should they
increase their prices and if they do, what are the factors that are to be considered?

Many factors owe to an increase in rent for space – it could be finding a proper space, understanding
the market for storage units, creating a demand, and even setting prices. Of all these, a major
question that remains a mystery to many storage facility owners is understanding the pricing
strategy. We spoke to one of our most trusted clients Peter, who owns a very successful storage
facility in Germany – Store and Park. So, we have Peter answering some of the most daunting
questions that a storage facility owner can possible have:

How difficult is it to increase prices for a storage unit?
It is inevitable for any business to alter prices. Setting a fixed price and trying to please customers
will only be a burden for the business in the long run. The pricing for a storage facility is determined
by many factors. Price change for a storage unit owner can be quite challenging in the beginning
until they understand the factors that influence it and come to articulate a better way of
implementing it. Having said that, it is not an entirely impossible task either. Dynamic pricing is the
key.

What is the right time to spike the prices in my storage facility?
A well-performing business is what everyone prefers, and it is essential to show it to your customers
by letting them know about the occupancy. If you ask me, the ideal time to increase your storage
facility cost is after the unit sees an 80% occupancy or more. It can also be based on the competitor’s
price in the area.

Can we also charge more for loyal customers?
If you want to increase your storage unit rent, one most important aspect to consider is customer
loyalty. Many customers come, explore, and go. Or maybe, use the unit for a very short span. On the
other hand, some have a long-term relationship with the storage facility. You can tell that by seeing
their occupancy length and tenure. So, if a customer is staying longer then you mustn’t surprise
them with the frequent price change. They should not be taken aback seeing the price gone up since
their last visit. This would directly impact customer loyalty.

So, how can we charge loyal customers?
Loyalty comes with trust and the key to trust is communication. It is the last job of a customer to
track the happenings in the market and forecast a price change to be prepared for it. As a
trustworthy owner, you are supposed to analyze these factors and keep your customers informed
well in advance about them. Pricing alterations should be communicated two to three months
before the actual price increase so that customers can prepare themselves forward and adjust their
payment methods to ensure a seamless transition to the new prices.

What is a major external factor that determines price change for storage rent?
A price increase could also be adopted and justified with some form of national fiscal data research
for example if there's been an increase in the taxes if there has been an economic upturn or
downturn if there has been an increased demand for storage spaces. These are some of the factors
that are not under your control and citing these as and when they unfold is a great way to
communicate the price change to the customer.

If I have multiple storage facilities, should I increase prices in all the locations as well, if I
change in one?
Many storage facility owners own more than one storage unit and often get confused if they should
do a price change for rents in all of them. The answer to this lies in what factors drive the price
change. As a business owner, you should have a separate approach for each of your units and that
will let you know what unit needs a price change and what can remain as is.

What could be service-based factors that can add to cost?
If your facility demands more security or some improvements, you can inform the customer about
the rent changes. This is also great, for the changes are physically visible and the customer would be
alright with a slight spike in the rent.
Peter says dynamic pricing is something that’s been in discussion for a long time now but not many
have adopted it yet. He also says that customers tend to do their research, come to a facility during
the inspection and then decide to check-in. If they then come back tomorrow or the day after a few
hours later and see that the price has changed this is not well received. And therefore dynamic
pricing is very important.