I’m often asked about discounting – particularly when I conduct StorMan training or attend a Sales conference, with clients keen to know how I would discount if I was running a marina or self storage facility. Given that this has been quite a hot topic of conversation over the years, I thought I would wade in and give my opinion of how I would do it if I was running things.
Let’s take a look…
What is a Discount?
Before we go on, we need to get our head around what a discount actually is. According to Google, a discount is “a deduction from the usual cost of something.” From this, we can see that for a storage facility or marina, a discount is a deduction off the monthly rental.
It’s important to remember that a discount is NOT a giveaway.
A giveaway is defined as “a thing that is given free, often for promotional purposes.” This can be anything from a month’s free rental to free merchandise. Often, many people confuse these two things and this skews their discounting as a result.
What kind of discount should I offer?
Now that we know what a discount is, we can look at how to offer one. That is, of course, if we need to offer one at all! Too often, I see people give away money that could otherwise be theirs just because they think they need to discount. In order to seek the answer to the discounting question, you need to look at what “phase of your business life” your business is in.
Ask yourself this: Which phase is your business in?
- Startup mode (1 – 6 months of opening)
- Build-up stage (6 months – 18 months)
- Maturity (18+ months)
The discounting rules are different for each phase – so understanding this at the outset is very important.Typically, if your business is in Startup mode phase then cash flow is king! By this I mean that you should be looking at doing any type of reasonable discount to attract business. At the end of the day, you need to realise that you have an empty facility or marina and you need customers who will be the foundation of your Rent Roll. Typically these discounts will have a large financial incentive tied to them.If your business is in the Build-up stage phase, then the discounting plans should revolve around maintaining your customer base and increasing your market awareness of the storage facility or marina. The discounts at this point would not be as dramatic or as long term as Phase 1 discounts and will be attractive to those customers who are looking for longer terms of rental or specific features of your site i.e. Haul-out facilities for marinas or longer access hours for storage.
If your business is in the Maturity phase (or is classed as mature; generally over 80% occupied), then the discount structures should reflect this. Discounts should be smaller, short-term incentives that briefly impact the bottom line but allow for a small percentage of your customer base to refer other people as potential customers and gain a small financial recognition for doing so. Continue reading via my Discounting Whitepaper below…
Discounts Done Right: Download our free Whitpaper