A Silicon Valley startup has developed a service that promises to guide self-storage operators in making better pricing decisions.
StorTrack is a new online subscription service that lets self-storage operators view real-time rental rates at nearby competitors.
Competing with the ‘top guys’
Users type their store location and the radius of miles for their market area into a browser-based application; a map then displays all of the storage facilities within the designated area. The application shows current and historical pricing information for various sizes of storage units.
StorTrack’s general manager, John Tilly, said the data give storage operators “an immediate view of the self-storage pricing market.”
“In the self-storage industry, the top guys are able to use their financial might to build sophisticated revenue management systems,” Tilly said.
Meanwhile, smaller operators take a more basic approach, typically calling competing facilities from time to time to see what they’re charging. “That is really a non-scientific approach, which can lead to inaccurate results that they build pricing on,” Tilly said.
With just a few clicks of a mouse, an operator using StorTrack can find out how much and how often competitors are raising or lowering their prices in a certain area. Tilly said this gives users more confidence in pricing decisions.
“If you make a random decision about pricing, who knows if you are leaving money on the table,” Tilly said.
Tilly owns San Mateo, CA-based information technology company 365 Media. A few years ago, 365 Media teamed up with another company to develop a revenue management platform for Sovran Self Storage, the REIT that operates Uncle Bob’s storage facilities.
“From that, we evolved the idea that the rest of the market could do [a lot] with this information as well,” Tilly said.
Tilly decided to create a product that the entire self-storage industry could use and spin it off as a separate venture. He said 365 Media is in the process of spinning off other pricing intelligence projects for other industries, such as hotels and event ticketing.
Tilly said he’s looking to hire someone to run StorTrack.
The price of pricing info
StorTrack has compiled pricing information for about 24,000 storage facilities in the U.S., or about half of the country’s entire storage inventory. The company obtains pricing information from various online sources, primarily facilities’ websites.
For small facilities that don’t have an online presence at all, the only way for StorTrack to obtain pricing information from them is by conducting additional research.
Within the first month of business, Tilly said, hundreds of operators signed up for a seven-day free trial offer from StorTrack. Tilly declined to say how many operators went on to buy full subscriptions.
The service starts at $49 a month for a single facility; the cost per location drops for an operator with at least two facilities.
Knowledge is power
Operators can boost their rental revenue by using the data to make more informed decisions about pricing, according to Tilly.
“For example, if you are 95 percent full but your average price is 50 percent of the market rate, you know you have room to increase your prices,” he said.
Tilly said the service also can help with development of new facilities.
“We’ve had a number of subscribers who are planning to launch or develop new territories. They are looking up locations to see what pricing conditions are like in that area,” Tilly said.
To download a free report about improving revenue management at your self-storage facility, visit selfstora.ge/revmgmt.