Pricing Strategy & Discounts | PugTalk

Pricing Strategy & Discounts

How should you manage your rates, and which discounts work best?

Raising rates and adding discounts can give any owner heartburn, especially when pricing strategies and discounts aren't one-size-fits-al! So which strategies can you use to manage your rates and discounts? We're inviting a panel of owners and operators to share how they do this at their businesses.

How can you stay competitive with your rates?
Which discounts are right for your business?
How should you handle rate increases?

Featured Speakers: Darren Kelley, Andrew Sherrard, Trish Abraham, & Tommy Nguyen

Aired: May 7, 2024
Duration: 1:08:03

Overview

If you don't have time to watch the whole session, here are some of our favorite parts:

At 9:11, our experts talked about how they keep their street rates competitive in each of their markets.
15:20, the panel discusses how you should keep your target customer in mind when setting your rates.
Starting at 19:11, they highlight the importance of transparency and educating customers on pricing practices in the industry.
At 22:10, our experts explain what the 4/4/4 strategy is along with how the REITs are using it.
24:30, they talk about how pricing strategy should fit into your overall brand or company.
Around 30:15, they discuss the reduced pool of renters and the increased competition in major markets.
At 35:50, our guests highlight raising rates on existing customers, when they do it, and how they communicate it.
44:20, they start digging into discounts and share some of the ones they've tried and tested at their businesses.
Starting at 51:50, they cover the importance of explaining your discounts and making sure customers understand the details.
Around 54:45, our experts walk through whether or not they allow managers or onsite staff to offer additional discounts.
58:18, they discuss whether or not they will price match if customers bring up competitor rates.
At 1:01:35, they share specific pricing advice as we head into the second half of the year.

Carol Mixon-Krendl

SkilCheck

Website: https://www.skilcheck.com/
Email: carol@skilcheck.com

Hailey Teal

Jenkins Organization

Website: https://www.jenkinsorg.com/
Email: hailey@jenkinsorg.com

Resources from this session

Awesome Quotes

“Once your operation is in place, you can become more dynamic with your pricing, but that requires data. You need some method of being able to record the data that you need to know whether your price is in the right place - whether you need to move it up or start giving some concessions.” - Warren Lieberman

“I never want to downplay to what someone else is doing. I'm better than they are, then I'm going to be worth a higher price. That's what value is. If you go out to a restaurant and get really good service, would you go back? Yes! What if it was pricier? You'd still go back because you got better service and a better product.” - Jim Mooney

"It's good to be informed on your competition. I don't want to ignore them, but I don't want to respond too strongly to them either." - Warren Lieberman

"We did a survey of 10,000 facilities on their pricing. We found out that two-thirds of those operators didn't change the price of a single unit of the course of a month." - Warren Lieberman

“Rate increases and value pricing are the number one ways to grow your revenue.” - Jim Mooney

"Tenants in more convenient units tend to be less price sensitive." - Warren Lieberman

"The size of the unit is only one aspect of what people are willing to pay for." - Warren Lieberman

Highlights

Foundational marketing strategies to have in place - whether leasing up or stabilized:

Website
Set up listings (Yelp, Google My Business, Apple Maps)
Social Media
Establish Local Partnerships

Lease up marketing strategies:

Lead Generating Strategies (like digital ads)
Aggregators (Sparefoot, Storagefront, etc.)
Awareness Campaigns (like billboards, flyers, and sponsorships)

Your average customer value
Find the average stay length of all tenants. Next take your economic occupancy and divide by how many units you have. That will tell you what the average customer pays.

Multiply the average length of stay by what the average customer pays, and that's the average value of a customer.

For example, if a customer stays for 12 months and pays $100 per month, then their value is $1,200.

Your average lead value

Figure out your closing rate (or conversion rate) i.e. how many leads do you turn into tenants? Multiply that by your average customer lifetime value to figure out what your leads are worth.

Pro Tip: see which lead sources are converting the best. It may be that certain sources have a higher conversion rate, so those leads are worth more to you than a source that barely converts.

Typical Lease-up timeline

According to our panelists, it's typical to see a 3-4% increase each month, putting your facility at 36% after the first year, and 72% after the second.

Alternately, you can look at your lease up goals through the lens of your units, aiming for 20 units rented per month.

For Nick and StorageMax, they pro forma their economic occupancy at 85% with their sweet spot at 92%.