here are currently more U.S. self-storage facilities than Starbucks, McDonald’s, and Subway locations combined (more than 51,000 facilities according to the Self Storage Association). That means serious competition for operators.
Add to this a low housing inventory that has homeowners staying put, and you have strong potential for a move-in slump.
In today’s business and financial climate, tenant retention needs extra attention. Fortunately, your current tenants represent tremendous revenue opportunity.
But before you consider how to keep tenants on property, think about why they might vacate and address those issues. That may be half the battle won.
“Most of the move-outs I see aren’t about price, they’re about friction,” says Melissa Huff, COO and co-owner of Lighthouse Storage Solutions. “The customer got a surprise fee, nobody answered the phone when they had a problem, or the property looks like nobody’s touched it in weeks.”
Also remember: Some tenants will leave no matter how buttoned up your business is.
“The goal is not to prevent every move-out,” says Jared J. Mastroianni, COO of modSTORAGE. “People finish a move, sell a home, settle an estate, or simply stop needing storage. A good retention program separates natural departures from avoidable ones.”
So, focus on what you can control: See what other operators are doing, figure out what you can do better, and make changes.
“You all sell storage,” says Sarah Beth DeFazio, Universal Storage Group’s vice president of sales and development. “You are the differentiator. Be the professional in your market. Know your property inside and out. Know your competitors inside and out. You can’t answer a comparison you’ve never done.”
How do you get to know your competitors that well? Stop by with a pizza at lunchtime one day and chat. You’ll soon know just about everything of value about them.
To start, answer the phone. Be there for tenants and prospects. And whether they’re on the phone or in the office, really listen to what they’re saying.
“Delivering excellent customer service alongside high standards at the store level makes it significantly easier for customers to choose to stay for one more month,” says Guy Middlebrooks, executive vice president of operations for CubeSmart Self Storage. “Friendly, service-oriented, and responsive store and sales center teams truly set you apart.”
Huff notes that customer service is about people, not features or amenities. “Automation has changed this business for the better but hasn’t replaced the manager,” she says. “Tenants want a personal experience [especially] when things go sideways. That’s the moment a good manager earns another 12 months of rent.”
For new tenants, an exceptional service experience includes some hand-holding that makes them feel valued and validates their choice:
- Showing them to their unit,
- Staying with them as they inspect it,
- Explaining how the gate and smart locks work, and
- Pointing out security cameras.
For long-time tenants it means providing a consistent quality of service and offering someone who’s ready to leave some options. Could they manage in a smaller unit? Focus on addressing the specific needs you’re not meeting.
Superior customer service works best in combination with other retention-boosting practices.
“The rental conversation is the whole ballgame,” says Huff. “Three extra minutes at the counter prevents a year of arguments that make people leave.”
Eventual rate increases are a fact of life for every business, so how do you handle that sensitive topic down the line?
“Everybody understands that expenses go up,” Huff says. “What people don’t like is being blindsided.”
Notify every tenant of an increase in writing with the required notice. Maintain a consistent increase interval, when possible. If you delay increases and then hit tenants with a large hike, even with notice, you’re going to see many move-outs.
“Most operators read those reviews defensively instead of reading them as data,” says Huff. “Learn from the data and make improvements.”
Mastroianni adds, “Track why tenants leave, not just how many leave. The manager should also mark whether the cause was reasonably preventable.”
Review the information monthly by facility and tenant tenure. Assign an owner, set a correction date, and check whether the pattern continues. This needn’t be a complicated dashboard, but a simple checklist of problems you can actually fix.
DeFazio recommends not waiting until move-out day for surveys. “Do an entry survey and ask why they chose you,” she says. “Do an exit survey and ask what changed. Most operators guess about their differentiators. Your customers will tell you if you ask.”
“Meeting customer expectations regarding technology, such as Bluetooth-enabled access, a user-friendly online rental and payment system, is essential in today’s environment,” says Middlebrooks.
Cameras, door alarms, and smart locks are expected features that will help you seal the deal. They make tenants feel secure. The most sophisticated technology isn’t always what keeps them around longer, though. A feature as common as autopay is a top retention tool.
“A tenant on autopay doesn’t drift into delinquency, doesn’t get overlocked, doesn’t get embarrassed, doesn’t get to the lien stage and just walk away,” states Huff. “Push autopay adoption hard. It’s the cheapest retention tool in the business.”
A pleasant environment also encourages tenants to stay. Everyone likes a clean, bright, and well-maintained facility.
“That means the office, the hallways, the restrooms, the grounds, the units themselves,” Huff says. “Burned-out bulbs and an overflowing dumpster tell your tenant you’ve stopped caring, and once they believe that they start shopping.”
Occasionally walk around your property just to see what needs fixing or cleaning up. Then, have a friend—a fresh set of eyes that won’t easily overlook any issues—do the same thing, and compare notes.
“Financial incentives like account credits or free rent usually do not effectively encourage longer stays,” says Middlebrooks.
If there’s a service or condition problem, a discount isn’t the solution, according to Huff. “If people are leaving because the property is dirty or the manager is short with them, a rate concession buys you a month and solves nothing,” she says. “Fix the actual problem.”
There are exceptions, though.
“A discount can be useful when it’s targeted, time-limited, and tied to a defined situation, such as a short-term hardship or a unit-size mismatch,” notes Mastroianni.
- A free lock,
- Free moving supplies at move-in (or move-out),
- One free month at a milestone, and
- A handwritten thank-you note.
“We pay $100 cash to anyone who sends us someone who rents,” says DeFazio. “That’s a better use of $100 than shaving $12 off a rate for somebody who was going to stay anyway.”