The Cost of an Average Manager, Part II
Copyright 2014 by Virgo Publishing.
By: R.K. Kliebenstein
Posted on: 01/01/2001



 
The Cost of an Average Manager, Part IIProfessional managers are part of the solution, not the problem

By R.K. Kliebenstein

This is the second part of a series on dealing with staffing changes. Previously, we discussed the self-storage supervisor/owner's role in the process. Now, let's examine the situation from the employee's side of the table. This is an opportunity to ask yourself: "As a self-storage manager, how can I prepare to deal with unmet expectations of an owner or supervisor? What is my role in the process? How can I 'train' my supervisor?" These are issues that, if avoided, may lead to some very negative consequences, such as demotion, disciplinary action and termination.

Do I Understand What Is Expected of Me?

Employees are frequently blindsided by an unhappy owner's expression of dissatisfaction. After receiving annual raises and hearing praises from a supervisor, the employee may have no idea a staffing change is even being contemplated. Have you, as an employee, asked what your owner's specific goals are? Do you know what he expects? Even if things are going "great" at your self-storage facility, have you asked what is expected of you?

It is often hard to get the full attention of an owner or supervisor if he is absent or has many other duties and projects on his plate. I suggest asking your supervisor to lunch. (And expect to pick up the tab; after all, you are inviting him.) Go somewhere off site on your day off. Make sure the location is relatively private. This meeting should never include spouses (unless you are working as a team), and there should never be children or friends with you. This is a business meeting.

Make certain you are prepared before the meeting. Have month-by-month occupancy statistics for the last year ready to review. If you know how to produce charts to present the information, you should do so. Make certain you look at occupancy on four levels: 1) unit occupancy, 2) occupancy by square footage, 3) dollars per square foot and 4) percentage of economic occupancy. If you have recently added new space to the facility, then these reports will need to be adjusted to reflect those changes.

I am amazed at how many professional managers do not know how many units or square feet they manage, or the economic occupancy of the store. If you do not know these basic facts on a daily basis, you are likely a caretaker, not a manager. How can you be the captain of your ship if you do not know how big your boat is? It is your responsibility to be informed so you can communicate with your supervisor on his level. If your occupancy is above 92 percent, have the rates been increased? Are you helping your owner watch for trends? Have the monthly deposits increased each month this year over last year?

During lunch with your supervisor or owner, you need to get answers to the following questions:

  • What percent of occupancy (per square foot, unit and economic occupancy) does your supervisor or owner expect out of the facility?
  • At what level of occupancy are rate increases expected?
  • If occupancy or gross receipts decline, when does the owner want to discuss the matter? (In other words, in his view, how long before this is viewed as a trend, not just normal fluctuation?)
  • If there is a downward trend, what should your role be in correcting it?

What Do I, as a Professional Manager, Need To Know?

You should always be armed with facts and figures. So often, we throw around percentages and numbers (or vague, unsubstantiated statements), because we do not take time to gather the facts. Here are the basic facts about your market and facility you, as a professional manager, should have documented:

  • Where do my customers live? Review the ZIP code reports from your computer records. Where exactly do your customers live? If you serve more than one ZIP code, indicate on a map the number of competitors in each zip code serving more than 5 percent of your tenant base. If you do not have multiple ZIP codes, conduct this research by telephone exchange. Most phone books have a map of the surrounding exchanges, and you can identify by phone number where your customers come from. If you have a high percentage (more than 20 percent) of "foreign" customers (those who live more than 25 miles away from your store), then you have a unique market you should discuss with your supervisor or owner. Do not guess at this information--be armed with facts, not assumptions. See Figure 1.
  • How did these customers find our facility when they rented? I cannot tell you how many times a "caretaker" (not professional manager) will say, "I get a lot of referrals" or "Most of my customers are repeat customers who stored with me before." Very few of them have facts supporting these statements. Most software applications have a customer profile that identifies how a customer found your facility. If you have disregarded the accurate collection of this information over the years, you have missed an important part of being an informed professional manager.

Once you have determined how the customer found the facility, divide the number for each category by the number of occupied spaces to determine the source of your tenants, expressed as a percentage of the total base. Refer to Figure 2 for the lists of categories. Some software applications can produce this report for you--if you took the time to accurately record the information in the beginning. If any category is less than 15 percent, it is probably not "a lot."

  • Who are my competitors? The professional, informed manager will know who his competitors are and, equally important, why they are competitors. For example, if when you plotted where your customers came from you found a large number are from an area more than three miles away, determine who the competitors are in that area. You may have assumed XYZ Storage was not a competitor because he was more than five miles away from you; but when you looked at where a large number of your tenants came from, and it was within two miles of that competing facility, you quite possibly identified a "hidden" competitor. Look at each competitor in the "path" of your customer (between him and your facility). Determine why the customer drove past the competitor's site to get to you. Here are some possible reasons:
  • The competitor is full and does not have the sizes you have available.
  • The competitor does not have a map in the Yellow Pages and customers cannot find him.
  • The competitor does not have a display ad in the Yellow Pages.
  • The competitor does not have the climate-controlled spaces or special features your store has.
  • The competitor's rental rates are higher than yours.
  • How do my rates and my store compare? As a professional manager, you should know your competitor very well. You should know the strengths and weaknesses of his location, as well as his level of quality, management and curb appeal. You should know each competitor's rates in any size category that represents more than 10 percent of your unit mix. You should check their rates quarterly, and visit the facilities annually. You should keep a notebook of your quarterly information and annual-visit data.

You will want to have a photograph of each competitor's store, and a map of where it is located. There should be a table showing its strengths and weaknesses. When you have a few years worth of data, you can begin to see trends in rent increases, the amount of turnover in manager staffing, how the store is maintained and what activity is happening in the immediate surrounding area. Is there a lot of building going on? Are there new retail stores in the competitor's neighborhood? Are there a lot of vacancies in strip malls near the competitor? How do the houses look? How do these facts compare with those of your facility?

  • What are my closing ratios, and do I understand my facility's traffic? I am certain as a professional store manager, you log each and every caller and visitor you get. You know how many calls were converted to visits, and how many visits became tenants. If you dared to be totally honest, you logged every call, not just those that made you look good. You know what time of day is the peak because you recorded the time and date of each call and visit. You recorded messages left on your answering machine during times you were closed or out of the office touring the property.

You may find you need to be open on Sundays because there were calls left unanswered. Are you closed on Sunday because your competitors are? That might be the very reason to be open on that day. Are you checking your caller ID to see who called but did not leave a message (and then logged the call on the traffic report, and followed up with a return call)?

Don't Whine and Complain--Suggest a Solution

One of the most compelling reasons for a manager to fall in disfavor with an owner is loss of respect. This often happens because the employee is seen as a chronic complainer or whiner. If you have a legitimate concern, discuss it with your supervisor, but always offer a solution, not just a complaint. For example, if you have researched your Yellow Pages ad and believe it needs to change because there is no map, redesign the ad on paper before you bring it up to your manager. Call and find out what a larger ad or an ad with color will cost.

If you and all your competitors are full in the 10-by-10 size category, and you have an abundance of vacant 5-by-10s, suggest combining some of those 5-by-10s into larger units. Know which tenants this would affect, and make certain you do not suggest combining where the door configuration does not work, or where tenants to be moved are difficult to contact. Understand what this change does to your rents per square foot. What is the break-even point for loss of revenue per square foot vs. gained occupancy? If you are going to suggest new landscaping or individual door alarms, do you have cost estimates for these improvements? Be a part of the solution, not a part of the problem.

Now That You Have the Facts...

Now, do something with all this information when you review with your supervisor. Armed with facts and figures, you are a professional manager informed about his facility's activity. Perhaps your closing ratios are weak (less than 75 percent). Perhaps you could benefit from additional training--ask your supervisor for it. Do not think needing additional training is a sign of weakness. This is not an "ego" thing. This is a request of your owner or supervisor to help you be a better manager.

Examine the competitors. Perhaps you've gained several new competitors over the past few years who have features such as individual door alarms or climate control. Maybe they are located on a main street and you are on a back street. Where are your rates in comparison to the competition? Are you a market leader or follower? How are your occupancies compared to the competition? Did you guess at their occupancies, or did you have their managers provide you with facts?

Discuss with your supervisor your Yellow Pages ad, its size and placement. Perhaps you need to remodel the office or paint the buildings. Maybe the landscaping looks tired. Is the parking lot clean and well-maintained? How does your signage look?

You may have a good case for discussing a merit increase if your store is operating at 94 percent occupancy (if it is higher, there should have been a rate increase to existing and new customers in the last 90 days); your deposits are 10 percent more than they were last year (based on the same number of units); and the economic occupancy is better this year than last, with an increase of at least 10 percent in rates per square foot. Why not suggest you receive a pay increase equal to the percent increase in rents per square foot? This would be a true measure of how well managed your store is.

By the way, did you suggest the rent increase, or make the increase kicking, screaming or doubting? What are the goals for the facility? How is the store operating today, and what are the expectations? Is an outside consultant needed because you and/or the owner just cannot figure out what is happening? Set specific goals for occupancy and rates per square foot. Suggest an incentive if you exceed the goals. Ask how you can be a part of the solution, not the problem. Prove you are a professional manager, not just a "caretaker."

Perhaps you have increased the rents per square foot, kept honest and accurate traffic reports, have up-to-date and accurate competition reports, and made realistic suggestions for improving the facility's performance, such as additional merchandise for sale, increasing the administrative fee or revising the unit mix to eliminate "flat spots." If your suggestions and accomplishments have gone unnoticed, it may be time for you to shop for a new owner. Then he may find out what the cost of an "average" manager really is.

R.K. Kliebenstein is a regular contributor to Inside Self-Storage and the founder of Coast-To-Coast Storage, which offers management consulting as a part of its full range of services. From feasibility studies to exit strategies, Coast-To-Coast Storage is the owner/operator's one-stop shop. Mr. Kliebenstein can be reached at 877.622.5508 (toll-free).

Figure 1

ABC STORAGE: WHERE CUSTOMERS LIVE

Source # of Customers % of Occupied Spaces How Far From Facility
Zip Code or Exchange 1
Zip Code or Exchange 2
Zip Code or Exchange 3
Zip Code or Exchange 4
Foreign
Do Not Know
Totals

 Figure 2

ABC Storage: Customer Source Report
Source # of Customers % of Occupied Spaces
Direct Mail
Drive-By
Former Customer
Internet
Referred By Competitor
Referred By Customer
Referred By Other Source
Walk-In
Yellow Pages
Do Not Know
Other
Totals