Self-Storage Collections: A Product of Company Culture and Strong Effort
|Copyright 2014 by Virgo Publishing.|
|By: Rick Jordan|
|Posted on: 08/22/2009|
While not every self-storage auction is avoidable, there are things you can do as a facility operator to keep delinquencies to a minimum. Pay close attention to collections and make sure your staff is adequately trained in this area. While a lot energy goes into getting customers to rent, once they do, you must take steps to ensure they pay on time. Successful rent collection is a result of company culture and strong effort.
Building a Culture
Your company culture is comprised of the underlying attitudes that influence the behaviors and functions of managers and customers. It will influence how hard managers work and how they interact with tenants. Think about your own corporate culture:
Company culture plays a major role in collections success. It determines how a manager treats the task and how the customer responds. A lackadaisical attitude will cause a manager to put in little effort and make the customer feel like he can pay whenever he gets around to it. A culture that’s too rigid may cause the manager to come across as coarse and angry when dealing with collections and have a negative impact on customer service.
What you need is a culture that promotes professionalism and respect. The manager will be courteous and consistent in his collections efforts. He’ll respect the customer. In turn, the customer will respect the manager and be more likely to make timely payments.
Your tenants have many financial obligations and sometimes have to prioritize them. Create a business environment in which they feel obligated to put you at the top of the list. Managers should be pleasant but firm when it comes to collections, viewing the task as a way to bring in revenue and help the customer avoid late fees and sales.
Make the Effort
Collections success is also a result of effort. Managers have to work hard to ensure customers pay on time. They should understand that collections is one of their primary job functions and feel accountable for following a consistent schedule of activities. This clearly defined list should address when to make phone calls and mail letters, adhering to the timetables outlined in your state’s lien law.
Letters should never be delayed or postponed but consistently mailed at the prescribed intervals. You may also want to e-mail copies of letters to customers.
Phone calls are perhaps the most important part of the collections process. They should be made consistently and according to plan. The best approach is to call the delinquent customer before the grace period expires to help him avoid a late fee. Once he is delinquent, make another call. In short, call the customer before and after each step in your delinquency schedule. Additional calls should be made whenever necessary to avoid a lien sale.
Make sure your managers are making their collections calls. They should keep a log of when each call is made so you can easily check their notes and see the account status. Accountability is essential to the program’s success, and follow-up will ensure the job gets done.
Now more than ever, storage operators and managers need to focus on collections. If you create the right culture of professionalism, respect and accountability, and put forth consistent effort, you will see results. You will sustain revenue and manage delinquencies, thereby making your investment as lucrative as possible.
Rick Jordan Jr. is the president of RWJ Storage Management LLC, which provides third-party management, training and consulting for self-storage properties. To reach him, call 562.682.5003; visit www.rwjstorage.com.