By Darren Kelley

By Darren Kelley

icture this: It’s a brisk morning in early spring, and you’re standing outside a self-storage facility, coffee in hand, watching as customers trickle in to access their units. As the president and co-founder of Right Move Storage, I’ve found myself in this scene countless times, pondering the ever-shifting landscape of the self-storage industry. In these moments, I’m reminded of the journey that led me here—the challenges, the triumphs, and the pivotal decisions that shaped our company’s trajectory. And at the heart of every decision, there’s one constant: data.

I’ve dedicated my career to helping self-storage owners navigate the complexities of our industry. In this article, I invite you to join me on a journey through the world of data-driven decision-making in self-storage. Together, we’ll explore how harnessing the power of data has transformed not only my own approach to business but also the fortunes of countless self-storage owners like yourself. So grab your coffee, settle in, and let’s uncover the secrets to success in an industry where data reigns supreme.

As a seasoned player in the self-storage industry, we recognize the importance of comprehending its nuances and dynamics to thrive in this ever-evolving landscape. Let’s delve deeper into the core elements shaping the self-storage industry.

By comprehensively understanding the growth trends, key players, and challenges inherent in the self-storage industry, we equip ourselves with the knowledge and insights necessary to thrive in this dynamic environment. Through strategic alignment and informed decision-making, we position ourselves for sustained success amidst the complexities of the self-storage landscape.

Growth Trends And Market Dynamics
The self-storage industry has undergone a remarkable expansion, spurred by shifting consumer behaviors, urbanization trends, and evolving lifestyles. Factors such as the rise of minimalist living and the growing need for flexible storage solutions have contributed to this growth trajectory. Understanding these underlying trends and market dynamics is paramount for self-storage operators striving to maintain a competitive edge. By dissecting the drivers propelling industry growth, we can tailor our strategies to align with emerging demands and market shifts.

Key Players And Competitors
In a crowded arena of storage providers, identifying the key players making waves is crucial for navigating the competitive landscape effectively. From multinational corporations boasting expansive networks to local mom-and-pop operations offering personalized service, the self-storage sector exhibits a diverse array of players. By scrutinizing the strategies and distinguishing features of these key players, we gain valuable insights to inform our own business approaches and carve out our niche in the market.

Challenges Faced By Operators
Operating a self-storage facility presents a myriad of challenges, ranging from managing fluctuating demand to navigating regulatory complexities. However, armed with resilience and strategic foresight, these challenges can be overcome. By acknowledging the hurdles confronting self-storage operators and proactively devising solutions, we empower ourselves to surmount obstacles and fortify our position in the industry. Whether it entails optimizing facility operations, adapting to evolving market dynamics, or ensuring compliance with regulatory standards, we approach these challenges with unwavering resolve and a data-driven mindset.

In the past, self-storage operators often relied on gut instincts and anecdotal evidence to make decisions about their facilities. However, as the industry becomes increasingly complex and competitive, this approach is no longer sufficient. Data-driven decision-making offers a more strategic and informed approach, allowing operators to base their decisions on empirical evidence and statistical analysis rather than intuition alone.

Benefits Of Data-Driven Decision-Making
Improved operational efficiency: By analyzing operational data such as occupancy rates and revenue per square foot, self-storage operators can identify inefficiencies, optimize resource allocation, and maximize revenue potential. For example, by analyzing occupancy patterns and transaction data, operators can anticipate peak demand periods and adjust staffing levels accordingly, leading to smoother operations and higher customer satisfaction. Or, by monitoring the call frequency data, an owner can understand the risk of having the manager perform duties out of the office that might cause a $1,600 rental (14- to 16-month rental opportunity) to be missed.

Enhanced customer experience: Understanding customer demographics and preferences is key to delivering a personalized and seamless experience. By collecting and analyzing customer data, operators can tailor their services to meet the unique needs of their target market, leading to higher customer satisfaction and loyalty.

Better marketing strategies: Data-driven marketing strategies enable operators to target the right audience with the right message at the right time, leading to higher conversion rates and increased ROI. By analyzing market data such as local demographics and competitor analysis, operators can identify opportunities for growth, optimize marketing spend, and drive customer acquisition.

Financial optimization: Analyzing financial data such as revenue and expenses, return on investment (ROI), and profitability allows operators to identify areas of inefficiency and waste, leading to cost savings and increased profitability. By monitoring key financial metrics and KPIs, operators can make data-driven decisions that drive long-term financial success.

Operational Data
Occupancy rates: Tracking occupancy rates allows operators to optimize pricing strategies, identify trends, and forecast future demand. By analyzing occupancy data over time, operators can identify patterns and adjust pricing and promotions accordingly to maximize revenue.

Revenue per square foot: Calculating revenue per square foot helps operators assess the profitability of their storage units and identify opportunities for revenue growth. By analyzing revenue per square foot by unit type, size, and location, operators can optimize pricing and unit mix to maximize profitability.

Customer demographics: Understanding customer demographics allows operators to tailor their marketing efforts and services to meet the needs of their target market. By collecting and analyzing customer demographic data, operators can identify trends, preferences, and opportunities for growth.

Market Data
Local demographics and population trends: Analyzing local demographics and population trends helps operators identify growth opportunities and target markets. By understanding the demographic makeup of their local market, operators can tailor their marketing efforts and services to meet the needs of their target audience.

Competitor analysis: Monitoring competitors’ pricing, promotions, and service offerings helps operators stay competitive and identify opportunities for differentiation. By analyzing competitor data, operators can identify gaps in the market, optimize pricing strategies, and develop unique selling propositions that set them apart from the competition. Using revenue management software allows the manager to more accurately and efficiently adjust rates based on real-time market data on pricing.

Demand forecasting: Using historical data and market trends, operators can forecast future demand for self-storage services and plan accordingly. By analyzing demand data, operators can anticipate seasonal fluctuations, adjust pricing and promotions, and optimize inventory management to meet customer demand.

Financial Data
Revenue and expenses: Tracking revenue and expenses allows operators to assess financial performance, identify areas of inefficiency, and optimize profitability. By analyzing revenue and expense data, operators can identify cost-saving opportunities, streamline operations, and maximize profitability.

Return on investment (ROI): Calculating ROI helps operators evaluate the profitability of investments in new facilities or expansions. By analyzing ROI data, operators can assess the financial viability of potential investments, prioritize projects, and allocate resources effectively to maximize returns.

Profitability analysis: Analyzing profitability by unit, customer segment, or location helps operators identify areas of strength and weakness, optimize pricing strategies, and allocate resources effectively. By analyzing profitability data, operators can identify high-margin products and services, minimize costs, and maximize overall profitability.

Management software and platforms: Cloud-based management software such as SiteLink, storEDGE, Hummingbird, and others offer features for tracking occupancy, managing rentals, and analyzing financial data, enabling operators to make data-driven decisions and optimize performance.

Customer relationship management (CRM) systems: CRM systems like Reputation.com, Salesforce, and HubSpot help operators track customer interactions, manage leads, and personalize marketing campaigns, enhancing customer engagement and driving revenue growth.

Business intelligence (BI) tools: BI tools such as Tableau and Power BI enable operators to visualize and analyze complex data sets, uncovering insights and trends that inform strategic decision-making and drive business success.

Data visualization tools: Tools like Google Data Studio and Domo allow operators to create interactive dashboards and reports, making it easier to communicate insights and findings to stakeholders and drive alignment across the organization.

Web marketing companies: Much data can be extracted from your website; owners need to understand data such as lead-to-lease percent and the cost of a lead which help make better decisions on the marketing spend.

Establishing clear goals and objectives: Define specific, measurable goals for using data to improve operational efficiency, enhance customer experience, and drive financial performance, ensuring alignment with overall business objectives and priorities.

Identifying relevant metrics and KPIs: Determine key performance indicators (KPIs) for tracking progress towards your goals, such as occupancy rates, revenue per square foot, and customer satisfaction scores, ensuring alignment with strategic priorities and objectives.

Collecting and analyzing data effectively: Implement systems and processes for collecting, storing, and analyzing data from various sources to ensure accuracy, reliability, and accessibility while enabling data-driven decision-making at all levels of the organization.

Interpreting insights and making informed decisions: Using data analysis to identify trends, patterns, and opportunities for improvement enables informed decision-making and drives continuous improvement and innovation across the organization.

Iterative improvement and adaptation: Continuously monitor and evaluate the impact of data-driven initiatives, adjusting as needed to optimize performance and achieve desired outcomes, and driving continuous improvement and innovation across the organization.

One example of data-driven strategies is the current focus on ECRI (existing customer rate increases). As data revealed a weakening in the number of internet rentals in fall of 2022, the larger operators recognized the need to shift marketing, pricing, and revenue strategies. They began dropping rental rates up to 30 percent to entice customers to choose their properties over the competition while simultaneously increasing Google ad spend three times the previous year’s spend. Additionally, a more aggressive rate increase strategy was implemented, such as every four months to market rate or every six months. It is yet to be understood the potential negative impact of these strategies on the consumer.

A real-world example of data-driven decision-making leading to positive outcomes is new property technology, such as access and security technology, that’s providing data to help owners make better decisions. Our company recognized a significant impact on our NOI from increasing property taxes and rising property insurance costs in our areas. As we examined the impact, it was critical that we significantly increase our revenue line, however, we were already maximizing ECRI. We pivoted to new technology called Storage Defender, which provided 24/7 peace of mind by monitoring the customers’ individual units while providing an income and profit model for the property. The data we have gained from this move has been instrumental in future strategies regarding zone access, unit access, etc. Door usage and wear on the door can be monitored/measured by the number of entries over time, which aids in forecasting one of the costliest replacements we incur in storage. Many customers have benefitted from the protection it provides, and data has told us that security of a customer’s goods is of primary importance to the customer. The ongoing data is also moving to reduce or eliminate the deductible on tenant insurance and provide greater profit for the property from tenant insurance.

Data privacy and security concerns: Address concerns related to data privacy and security, ensuring compliance with regulations such as the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA), and implementing measures to safeguard sensitive information.

Access to reliable and accurate data: Recognize the importance of data quality and integrity, implementing measures to ensure data accuracy and reliability, such as regular audits and validation processes, and leveraging technology to automate data collection and validation.

Overcoming organizational resistance to change: Acknowledge potential challenges related to organizational culture and mindset, emphasizing the benefits of data-driven decision-making, providing training and support to facilitate adoption, and fostering a culture of continuous learning and improvement.

Operating a self-storage facility presents a myriad of challenges, ranging from managing fluctuating demand to navigating regulatory complexities. However, armed with resilience and strategic foresight, these challenges can be overcome. By acknowledging the hurdles confronting self-storage operators and proactively devising solutions, we empower ourselves to surmount obstacles and fortify our position in the industry. Whether it entails optimizing facility operations, adapting to evolving market dynamics, or ensuring compliance with regulatory standards, we approach these challenges with unwavering resolve and a data-driven mindset.

By comprehensively understanding the growth trends, key players, and challenges inherent in the self-storage industry, we equip ourselves with the knowledge and insights necessary to thrive in this dynamic environment. Through strategic alignment and informed decision-making, we position ourselves for sustained success amidst the complexities of the self-storage landscape.