Some of our clients have requested that SpareFoot collect a fee from customers on our website before we allow them to make a reservation. But as you know, SpareFoot's reservations are 100% free for customers and do not require a deposit of any kind. This article provides some context for our decision to keep our website totally free.
SpareFoot's core mission for facilities using our service is to:
- Capture customers who are looking for storage before they wind up renting from a national brand.
- Increase your occupancy as much as possible by sending you as many tenants as we can.
Remember, SpareFoot's incentives are aligned with yours. Our business model is 100% pay-for-performance, so SpareFoot doesn't collect any fees for customers who don't actually move in. We're constantly working to ensure that the customers who reserve a unit on SpareFoot are quality reservations, with every intention of renting from you. Of course, sometimes customers' plans change - houses don't get sold, moves don't happen, etc. - so we expect a small percentage of customers not to follow through.
In an effort to determine the effect of taking deposits on our site, we ran a month-long test for some facilities in a high-traffic area:
- 50% of customers who visited our website saw the standard version that doesn't ask for a credit card or accept a deposit.
- 50% of customers who visited our website saw an altered version where they were required to enter a credit card before they could reserve a unit.
Here were the results for one facility in the test:
Without Credit Card With Credit Card
Total Reservations 21 9
Move-In Rate(%) 67 88
Total New Tenants 14 8
As you'd imagine, the move-in rate was very high for the credit card customers. However, the total number of tenants the facility received was lower (8 versus 14). We decided the test was a failure, because it didn't jibe with our core mission:
Capture customers who are looking for storage before they wind up renting from a national brand.
National brands don't require a deposit on their websites. By requiring one on SpareFoot, we'd lose you business to these operators.
Increase your occupancy as much as possible by sending you as many tenants as we can.
In the version of the test without the credit card requirement, the facility was able to increase their occupancy with even more rent-paying tenants from SpareFoot! In the other version, though the reservations were more likely to move-in, the bottom line number of tenants sent was much lower.