By Jim Chiswell
I want to start this month's column with a correction to an article I published in the April 2001 issue of this magazine called "The Feasibility Study." In my haste to make deadline, I made an error in explaining Buzz Victor's "66 Percent Rule." In detailing the calculation I wrote, "You should not pay more than $7.96 per buildable square foot." The word "buildable" should have been omitted. This means you should apply the per-square-foot value to the entire parcel being purchased. I apologize for the error, though looking on the bright side, it may have made developers more conservative about getting their numbers to "pencil out."
Washington Self Storage Association (WASSA)
I want to take a moment to congratulate Dean Reynolds, president of WASSA, and his board of directors on their outstanding state convention in April. The two-day conference brought more than 125 owners and managers together from across the state. I feel fortunate to have been selected as the keynote speaker at the opening session. WASSA has also created a wonderful website with a significant "Members Only" section. This allows the association to communicate information to members while providing a major benefit for owners and managers. Check out the site at www.wa-ssa.org.
I continue to urge you to become an active member and attend the annual or regional meetings of your state association, as well as any of the meetings sponsored by the national Self Storage Association. It is only through the strength of unity that we can successfully deal with the many issues facing us at the state and national levels.
Customer Service Deficit Disorder (CSDD)
My keynote speech at the WASSA meeting was all about customer service. As I travel across the county, I see firsthand the steady decline in customer service at every level of the travel and hospitality industry. You might ask yourself: When was the last time you were made to feel special by a clerk in a retail store or service person in a restaurant or on an airplane?
This breakdown in customer service is also at epidemic proportions in our industry. High occupancies and our ability to steadily increase rental rates have left many of us taking the customer for granted. It has created the illusion that there will always be someone else to rent a unit if customer X leaves in frustration. The admonition of my WASSA remarks was that if we do not focus our management attention and make customer service a true passion, our market share will be eroded over time, and our customers will go to other stores that cater to them.
Customer service isn't just limited to phone calls and discussions over the counter. You need to consider every interaction potential and current customers have with your business. Jan Carlzon, past president and CEO of the Scandinavian Airlines Group, calls these interactions "Moments of Truth." These include when customers drive by your store, read your signs and look at your Yellow Pages ad. Have you started to think of symptoms of customer service deficit disorder (CSDD) you may be suffering from?
After speaking at the WASSA meeting, my wife and I drove over to The Coeur d'Alene Resort in Idaho for a few days of R&R. As we drove up to the hotel, we were greeted by valet staff wearing lapel pins that read "Lagniappe." Once inside the hotel, it was evident every single employee was involved in this "Lagniappe" campaign. I discovered later that day what my friends in New Orleans already know: Lagniappe is a Cajun term meaning "a little bit extra." The hotel's general manager had adopted it as his way of expressing a passion for providing the extra measure of service that would set the resort apart.
I can testify as a frequent traveler that not only is his campaign successful, but during our stay we enjoyed the best customer service of any hotel in the United States. I left with a commitment to return as soon as possible. I also left with a few "Lagniappe" buttons in my pocket to remind myself that creating the mindset of doing just "a little bit more" at our facilities will place our stores in very elite company. As a result, rentals will increase, retention will increase and the bottom-line results will soar because you will stand head and shoulders above your competition. This is a successful prescription for defeating that horrible CSSD.
A Caution About Wine Storage
There has been a great deal written about wine storage and I am hearing more and more discussion about adding this niche offering to some self-storage facilities. Yes, I am very aware that at facilities with dedicated wine storage, the rental rate per square foot is appealing. I just want to urge extreme caution if you are considering this idea. I am convinced that wine storage will only work in a limited number of submarkets across the United States. No one has yet to step forward with a magic formula for wine-storage demand potential, and I do not believe one exists.
There are businesses solely dedicated to wine storage. Some of them can be found in the classifieds section of Wine Spectator magazine. I advise you not to get carried away by the lure of $60 to $100 per-square-foot rental rates when the space could easily sit empty. For those lucky enough to be in one of these unique markets, I wish you the best of luck. For the rest of us "mortals," I advocate a go-slow approach. Also, remember there are very serious penalties associated with the receipt of alcoholic shipments if they are illegal in your state.
Where Did This Come From?
As I travel across the country, I pick up different little phrases that have become a part of our language. Most of the time, I have no idea how they came into such common usage. I will strive in future columns to include several of these phrases and ask if any of you have an idea what they mean or how they got started. The first two are: "dead as a doornail" and "easy as pie." If you have any ideas about how these sayings came to be, please drop me a note. I will post the best answers in a future article.
Jim Chiswell is the president of Chiswell & Associates. Since 1990, his firm has provided feasibility studies, acquisition due diligence, expert testimony and customized manager training for the self-storage industry. In addition to contributing regularly to Inside Self-Storage, Mr. Chiswell is a frequent speaker at Inside Self-Storage expos and various association meetings. He can be reached via e-mail at [email protected] or by calling 716.634.2428. Visit www.selfstorageconsulting.com.