Improving Operations Through Software

Markus Hecker Comments
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In recent years, many self-storage operators have upgraded from their DOS or manual management systems to Windows programs written specifically for the industry. Stepping up to a new system should always result in improvements to your bottom line. While you may see some enhancements quickly, others may come in more indirect ways months after you have installed the new software.

For example, ease of use lets a manager get through his day more efficiently, allowing him to focus on other moneymaking activities, such as marketing, networking with other businesses, and training new employees. Better performance tracking, on the other hand, creates the immediate benefit of identifying areas for progress.  Whether you have been using a Windows program for a while or are debating when to upgrade your system, here are a few program benefits to consider.

Ease of Use

I often compare a software program to a well laid-out house: a good floorplan draws you in and pulls you from one room to the next. Similarly, there is no substitute for a smart layout, organized screens and inviting buttons in a Windows program. When getting the feel for a program, a video can help break the ice. Some packages include video clips that offer an annotated tour of their main features.

As with most Windows-based software, few operators use all the features available to them. Many valuable tools remain untouched. Don't be afraid to ask your vendor for help. While most operators rely on technical support to overcome problems, few simply call for guidance in blending the program with their operations. Don’t let your list of questions go postponed or ignored—you may forget important details or a specific context when you do finally talk with your provider. Instead, call as soon as questions arise; get your answers, and be on your way.

As programs become simpler to use, operators spend less time training employees. That makes it easier to hire new staff and feel confident when you have to be out of the office. Whether you work the counter every day or remain hands-off, it helps to have software that is user-friendly.

Reports

The reports produced by your software should not shower you with information but summarize and correlate data in understandable ways. Reports help uncover inefficiencies in your operation. They can also show how well your promotions and marketing dollars work, plot where your clients live on a street map, or tell you what percentage of your business comes from referrals.

Look for reports that measure collections by category, such as rent, late fees and merchandise, and compare them to giveaways (i.e., forgiven late fees and other waived charges). All too often, concessions are not itemized by type, leaving you without a measure of how much in fees you waived. As the saying goes, “What gets measured well gets done better.”

Also look for ways to monitor how your economic and physical occupancies compare each month. Economic occupancy divides the rental income of actual occupied units by your potential revenue at 100 percent. It should closely track the percentage of rented square footage; otherwise, you are renting some units for too little or leaving too high a sticker price on vacancies. Older programs and even paper systems can measure these activities; but your Windows program should show several ratios side by side, as well as filter, sort and summarize by time period for better analysis.

Yield Management

Airlines have practiced yield management for years, and you should, too. Windows programs can let you set “smart” thresholds to adjust rent for vacant and occupied units every time you meet the criteria. While revenue management is unbelievably hard to implement with older programs or paper systems, having the right settings in a Windows program makes it a cinch.

Demand can vary by geography and time of year, and programs can show how to set your pricing accordingly. If you offer coupons or concessions, consider doing so by unit size, and check the length of stay and occupancy by unit size and type.

Merchandise

Programs can let you offer an ever-expanding list of goods to your customers. Merchandise, or point-of-sale (POS) items, can quickly snowball. Once you have success selling a limited list, you will quickly find other goods to pitch. Some operators even bundle several items, selling them at a slightly discounted price, yet raising their gross income.

What are the nuts and bolts of handling POS? Your software will account for additions to inventory (complete with purchase orders or invoices), transfers between stores, promotions, returns, shrinkage and damaged goods. To handle returns, programs can recreate sales receipts and match them to client copies. Generating return receipts for refunds helps complete the audit trail.

Printed Communication and Marketing

A word-processor is often included in your management program, and merge fields allow for quick, easy adjustments to your written correspondence. Receipts and invoices are a great marketing tool—you can use them to communicate messages to customers. For example, you can add a message to your monthly invoice announcing promotions, changes in operations, gate hours, etc. Repetition is the key to good marketing. This feature allows you to create awareness at no additional cost as you make better use of unused real estate on the bottom half of a document.

E-mail is another inexpensive way to communicate with tenants and prospects. The cost of e-mail is fixed; monthly charges are the same no matter how many invoices you send. With the rise of spam filters, email has lost some of its luster; but the ease of reaching customers makes it a good supplement to printed communication.

Other users still find postcards an attractive communication tool. With the popularity of dot-matrix printers in the DOS world, postcards were a staple; but they lost their appeal, as few Windows-based programs process them. Some Windows programs do still generate reminders, invoices or auction- date notices on postcards, helping you communicate with customers for 23 cents in postage.

Features at a Glance

There are many ways to get more use out of your software program. While you may not use all the features a program offers, it helps to focus on at least a few. Here’s a quick list of important considerations:

1. Training and Usability—

Look for ways the software can facilitate training for new users. User-friendly programs make for happy operators. The more popular the program, the easier it will be to find employees familiar with your software.

2. Reports—

The right reports limit honest errors and opportunities for theft as well as track trends. Look for itemizations of fees waived, not just total concessions. Compare economic to physical occupancy. Look at year-over-year changes in revenue, occupancy and other tell-tale factors.

3. Performance Tracking—

Your program should measure items such as payments accepted, leases signed, and phone calls to and from the store. Numbers of walk-ins and calls converted to rentals are important parts of your store’s bill of health, while logs of hourly traffic will tell you how to staff and set operating hours.

4. Yield Management—

Look for criteria in your program to adjust rental rates for vacant and occupied units. Such thresholds vary for different occupancy levels, locations and times of year.

5. Merchandise—

Use your program to boost your bottom line through merchandise sales. Software can turn your office into a retail operation by recording returns, shipments, transfers, shrinkage and damaged items for complete audit trails and performance tracking.

6. Collections—

Windows programs can be smarter about which tenants are late and why. From one menu, software can filter delinquents by the number of days late, organize ledgers and phone numbers for reminder calls, keep a log of conversations, and let you set prompts for additional follow-up.

7. Speed—

Look for Windows programs to complete multiple tasks from one menu with fewer screens and clicks. This will put information at your fingertips to accomplish tasks more quickly.

8. Marketing—

Learn who your customers are by plotting their addresses on a street map, asking how they found out about your store, and learning why they are storing. Then target prospects through mailings and personal visits. With the time you save using the features of your Windows program, you have a whole new set of opportunities to bring prospects to your store.

9. Backups—

Upgrade your backup system from floppy disks to other media, such as zip disks, CDs or flash memory sticks for USB ports. At a minimum, store a copy of your backup off-site, or ask your vendor about off-site options and procedures.

Markus Hecker is director of marketing for SMD Software Inc. out of Wake Forest, N.C. SMD provides management software for the self-storage industry. For more information, call 919.562.6711 or visit www.smdsoftware.com.

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