Tough Times For Management
Copyright 2014 by Virgo Publishing.
By: Carol Krendl
Posted on: 12/01/2003



 

The self-storage industry continues to see uneducated property owners building storage in saturated markets. On a weekly basis, I get calls from people who are building a selfstorage project but have not completed any due diligence in advance. These types of builders and operators only make the management of a storage business more difficult. They are determined to build, yet they fail to have a storage professional conduct a feasibility study to determine if the project is viable or how large it can be to successfully rent up and make money.

If you are a builder who got the “building itch” from Kevin Costner’s movie Field of Dreams, if you think the adage “If you build it, they will come,” applies to your 5 acres, think again! On the other hand, if you are competing with an owner who has this type of mentality, you must become better at operating your business.

In times like these, your management prowess can make or break a project. Tough competition and a slowing economy will require you to sharpen your management tools to effectively attract more customers than your competitors. Therefore, the important question is, “How can I become more effective at managing my investment?”

First and foremost, you must master the basics of self-storage, which are:

  • Build the project in a growing market with good visibility
  • Hire friendly employees
  • Train for service excellence and business philosophies
  • Compensate employees well
  • Praise jobs well done
  • Lead your employees by example
  • Market your project effectively
  • Operate your business in a customer friendly manner
  • Evaluate and reinforce your training and philosophies
  • Set policies and procedures for employees
  • Visit the property often
  • Communicate regularly with employees
  • Communicate regularly with your customers
  • Get referrals for new customers
  • Give customers a means of communicating with the owner

Management Intensive

If you haven’t already determined the selfstorage business is management-intensive on your own, here is a news flash: You must manage your managers or they will manage you! Very few employees can see the “big picture” or understand your business philosophies. Therefore, you must get better at hiring employees and effectively communicating to them the business and customer needs in self-storage.

For you Monopoly fans, you can have the best properties on the board and still not make money or win the game. People have to land on your property or you do not get the rent money. The moral of this story is, if your managers can’t get a customer to “land” on your property with a phone call, you won’t get the rental. This can be a real problem if you have a “Boardwalk” type of property—the customer may base his buying decision on price if your employee didn’t differentiate your product and services. He should get the “Go to Jail” card, and you should go back to “Go,” because you will not collect that extra $200.

Self-storage owners are often afraid to terminate employees who are not performing well. Don’t make the mistake of keeping a poorly performing employee on your payroll. If you are not spending time at the property with your employees, you will not be able to determine whether they are truly being effective. And as a supervisor, you must have an agenda when you visit the property. Here are examples of items you should be reviewing on a regular basis during your property visits:

  • Marketing ideas and issues
  • Sales (number of phone calls received during that week vs. rentals)
  • Employees’ mystery-shopping sales evaluation
  • New-tenant questionnaires (check for ad source)
  • The list of delinquent tenants (preferably listed by number of days delinquent)
  • The move-out questionnaires, to look for areas to improve customer service
  • Reports from computer
  • Internet use (or abuse)
  • Auction paperwork
  • Maintenance and cleanliness issues that need to be resolved

The above list is merely some of the items that should be covered. Yesterday, when I visited one of my sites, I had the following notes as my agenda for time spent at the property:

  • Congratulate employees on mysteryshopping scores (Tim 99, Nancy 100, Jack 94)
  • Randomly review rental agreements and files for accuracy
  • Ask why administration fees were waived on new rentals
  • Ask about the free rent credit given to units 4508 and 2105
  • Ask about security problems and any customer complaints
  • Check merchandising of products
  • Review the petty-cash receipts and approve
  • Check Internet use
  • Inventory six spaces for next auction
  • Ask about status of project list
  • Check for uniform cleanliness and inspect the restroom
  • Problems/issues (customer or employee)
  • Praise for last month’s net increase of 25 spaces

What Gets Measured Gets Done

Keep in mind you cannot possibly cover everything in one visit. A highly effective supervisor should be visiting the property weekly for at least four to five hours. If your property is not easy to visit on a weekly basis, you must become effective at managing by the numbers. It is important to learn to interpret the management reports from the computer. And you must learn to use e-mail, fax and the telephone effectively. At a minimum, the facility supervisor should visit once a month for a full day.

While you are visiting the property, watch, look and listen to everything happening at the business. You can learn so much when you are observant. If you happen to see behavior that is unacceptable or not to the standard you would like, let the employee know as soon as possible. It is imperative you address issues immediately. If you procrastinate, you are condoning the inappropriate behavior and/or you may forget to bring up the matter at a later date. However, be careful not to address issues in front of a customer or other employees if they are not involved— praise in public and critique in private.

There are numerous markets around the country that are experiencing over-saturation. Combined with a slowing economy, this could spell disaster for an operator who is not maximizing the management of his investment in the self-storage business.

Think Like Your Customer

Your business will experience a higher level of customer satisfaction if you can operate on a daily basis with the customer’s perspective in mind. Customers expect that storing their goods should be safe, convenient and easy. This shouldn’t surprise you. However, I have heard employees say to a customer, “You will have to get here by 4:15 if you want to look at or rent a unit, because we close at 5.” Thankfully, this was one of my competitors. Why would an employee discourage a person from visiting the store and renting, even if it was almost closing time? The answer is either 1) the home office said the employees weren’t allowed overtime or 2) the (burned-out) managers are running the show.

Are your employees and operations promoting customer convenience? Assess your property, renting procedures and policies from a customer’s perspective. Years ago, all my properties had typical storage-access hours from 7 a.m. to 7 p.m. After receiving several customer complaints and move-out questionnaire forms that suggested we extend our hours, I decide to offer hours from 6 a.m. to 9 p.m. Since that time, we have acquired new rentals on a monthly basis because we had the longest office hours in town. In addition, since we now have individual door alarms monitored by a security company in the evening, we have offered extended gate hours. This is one small example of offering convenience to the customer.

Too often, you will find storage is still being operated with “caretakers” who are merely rule-driven. Rules and policies are necessary, but they can drive some customers to your competitors. This is especially true if the employees are presenting rules and requirements during their sales presentations. This information can be covered once the customer has signed the contract.

Nothing Beats Visiting the Property

To excel at management, a supervisor must keep his employees “rowing in the same direction.” One way we can ensure employees know what direction they should be taking is active supervision. Therefore, it is important to make customers’ needs the center of your discussions when visiting the property. This means you must lead by example and continually demonstrate that customers are the focal point of our service business.

I recently visited a property where it took 45 minutes to go through the rental process (the time did not include showing the space). The employee said, “I can’t believe how impatient people are today.” I took the opportunity to point out her rental process had too much paperwork to be signed at the time of rental and she should streamline the process. It shouldn’t take more than 15 minutes for a customer to complete the rental agreement. Do you know how long it takes for your employees to rent a space? If you are spending quantity time at the property, you should know this type of fact.

Keep Your Focus

As a supervisor/owner, you must learn to keep your focus during property visits. Managers often waylay you and get you too focused on solving their problems. On occasion, they may bring up a priority; however, more often than not, you will find yourself discussing the petty-cash check, the customer who stinks or some other topic. To keep employees focused, you must maintain a high level of awareness of the item, action or topic at hand. Important things on which to focus are:

  • Improving customer satisfaction
  • Increasing profitability
  • Fairness
  • Creating a more organized business
  • Assisting your understanding of the market and business through reports
  • Monitoring the accuracy of employees

It is not always easy to keep your eye on the target, especially when there are so many distractions. Don’t lose sight of new ways to keep your customers happy. This doesn’t mean you should not have rules, but you shouldn’t let them abuse your kindness.

For example, if you waive a late fee once, customers assume they can get you to waive it again. Some plead for mercy, some threaten to move out, and others simply ignore the reoccurring fee. My policy is to waive the customer’s first late fee and educate him on the policy in a friendly manner. Any late payment thereafter will be assessed, and we will again politely explain the policy to the customer. Learn to be flexible and train your manager to make good decisions based on your company’s philosophies and values.

Where Does the “Buck Stop” in Your Organization?

Who in your organization is ultimately responsible for the property? Are they spending enough time helping employees focus on the important things? Are the employees responding to training and direction given by management?

Don’t let your property suffer because of lack of attention or action. Effective management requires constant decision making and action. If you have complacent or poor performers, allow them an opportunity to find a job they like. If you keep this philosophy in mind, it will make your decisions much easier.

Industry expert Carol Krendl has been involved in self-storage for nearly 20 years. In addition to working as a corporate trainer for a large self-storage developer with 69 selfstorage properties, she has written many articles on a variety of industry topics—including a quarterly newsletter on sales and customer service—and conducted seminars for selfstorage owners and managers. Krendl has served as president of the Western Region board of directors of the national Self Storage Association as well as treasurer and secretary of its Executive Committee. She is also on the board of directors for the newly formed California Self Storage Association. For more information, e-mail carol@skilcheck.com.