232. Are Self Storage Price Drops a Lie? Well, sort of...
Self Storage Income
AJ Osborne
4.9 • 591 Ratings
🗓️ 13 February 2024
⏱️ 39 minutes
🧾️ Download transcript
Summary
Like any industry, self storage has recently adopted the idea of "promotional pricing." Think "first month's rent" for housing or "device trade in credit" for buying the newest smartphone. At some point, it is just too good to be true.
There's a fine line between "promotional" and "false advertising." Attracting the right customer base - and getting them in the door the RIGHT way - is what Conner and Jesse Harmon talk about in this episode of Self Storage Income.
Jesse recently got back from the Tenant Inc. Innovation Conference, where there was a lot of discussion on customer acquisition, customer service, and the role of AI in revenue management. The overwhelming consensus in the industry (particularly the REITs), is to lower prices, get people renting, and then jack up prices. But that takes the choice away from the consumer (and as a consumer, you may feel swindled or ripped off. Rightly so!). Questionable ethics aside, is this really a sustainable long-term strategy? Is there any other way?
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Transcript
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| 0:00.0 | They're catching on to these strategies and tactics, right? |
| 0:03.0 | It's not like we can just cut the rates to nothing. |
| 0:05.7 | And then, I mean, we've even heard the questions. |
| 0:07.8 | Like, really? |
| 0:09.1 | Like this 10 by 10 is only 30 bucks? |
| 0:12.4 | Like, what's the deal? |
| 0:13.7 | Like, you get to that too good to be true situation. |
| 0:16.8 | You end up getting into the, okay, it's 30 bucks now, |
| 0:19.8 | but what's it gonna be, you know, in six months? |
| 0:22.9 | Because people understand that, like you said, it's probably a promotional rate, |
| 0:27.6 | but if you're not being transparent about those things up front and being clear, |
| 0:31.5 | then obviously you're probably going to lose that individual because they think, |
| 0:35.0 | well, these guys are going to do the old bait and switch. |
| 0:37.9 | And six months later, I'm going to get this massive rate increase. |
| 0:41.5 | And my 30 bucks is now 200. |
| 0:43.4 | That's exactly. |
| 0:44.0 | And that's what the REITs are doing, right? |
| 0:45.4 | And I don't think we need to be that extreme. |
| 0:48.3 | But at the same time, speaking of Rev, man, that was a huge talking point at the conference because of the amount |
| 0:57.6 | of AI now coming into the storage industry and one of the big ways it's really coming in |
| 1:05.1 | is revenue management. |
| 1:07.5 | And it's not like AI as far as some magic robot doing your revenue management. |
... |
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