At what point does your business information shift from being an afterthought to the centerpiece of daily operations? At what point do business decisions become affected by good, timely data—decisions that effect growth and profitability and result in competitive advantages? As the self-storage industry has become more complex, with intense competition and varied business models, companies seek to make more effective use of their available resources. Based on its quality and content, operational data is one resource that can lend itself to improving a business in many ways.
For information to be useful, it must be available and timely. There is only so much you can accomplish when your business data is scattered on various computers. This is not another diatribe on the benefits of centralized data. Instead, it’s about the new frontiers of self-storage, including kiosks and call centers, and the value of historical data.
Kiosks have garnered the attention of many operators as a way to expand and improve the storefront and customer-service experience, as well as save money. But what is really required to make the kiosk work in various modes of operation?
A kiosk is a fantastic idea for sites that need additional methods of handling customers or for after-hours service. Similarly, some operators would like to run “lightsout” facilities, smaller sites where a full-time manager is not economically feasible. In this case, a kiosk is a great solution; but it depends on facility data being available and, in most cases, timely or in real time. The kiosk at a busy facility is likely tied into the operational software and knows what it needs to take a payment or move in a new tenant. However, a kiosk placed in the Student Union of a local university, miles away from a facility, may not have access to timely data, depending on how the operator makes his information “visible.”
Call centers offer another example of why corporate data should be accessible outside the domains of site offices or corporate databases. The value of call centers for operators of all sizes is clear. However, it is compounded or crippled by what each center “knows.” The call centers in this industry are very technically capable and eager to move beyond the days of faxed or e-mailed vacancy reports. Dollar for dollar, the call centers make sense by extending service hours and ensuring no customer is neglected. Coupling the tremendous service capabilities of the center with real-time data only magnifies the return on the investment and provides customers more options. A call center working with information that is 24 hours old has its hands tied, since occupancy data is likely to be inaccurate.
The Value of Historical Data
It is encouraging to see operators in our industry adopting new technologies. Vendors scramble to meet the demands of those who imagine new tools to better manage properties and serve customers. With the number of companies that offer online solutions increasing each year, centrally based systems are here to stay.
The examples of technology use cited above demonstrate the benefits of data consolidation; but another area deserving attention is the history of facility data. For example, take the exercise of pricing unit inventory. Immediate knowledge of occupancy and available units is obviously very useful when a new customer is renting a unit via a kiosk. This same knowledge is useful for determining unit rates, though it only provides a fraction of the information required for accurate pricing.
Pricing decisions based on current occupancy alone ignore trends and characteristics of your customers over time. More intelligent decisions can be made if historical considerations are taken into account. Being able to refer to past pricing adjustments and contrasting them against competitive data can greatly improve the efficiency of business decisions.
For example, I know of one organization that is actively using tools to track customer reactions to various price increases. From this data, it can analyze exactly when a customer becomes sensitive to a rate increase. Let’s say an analysis of the data over two years shows that three percent of customers will move out within 60 days in response to a 6 percent rate increase. An increase of 6.5 percent or higher causes a 7 percent move-out over the same time period. Given this data and some very simple math, it is easy to see the range within which rates can be adjusted without causing a mass exodus. Further, with known vacancy rates based on historical results, forecasting and demand analysis becomes obvious and predictable.
Obviously, for this approach to work, data must be on hand. In this case, the timeliness of the data is less important than the overall historical record. The company just beginning to use information in this manner is not likely to have the historical data necessary for immediate use; thus, the payoff is a year or two down the road.
In addition, analysis of the data is not trivial. It requires some sophistication to determine which events are responsible for customer decisions: rate changes vs. other forces that influence normal attrition. It is also helpful if seasonal trends can be included in the big picture to help account for abnormal occupancy statistics at given times of the year. The pricing puzzle is complex, but with solid data from past pricing exercises, some of the uncertainly can be removed from the equation.
General reporting is the first and last consideration of good data. Reportable, useful data meets all of the conditions outlined above: availability, timeliness, consolidation and historical depth. Good reporting solutions mean facilities and corporate users are satisfied with required information; and investors, partners and other entities can see and use pertinent data as they need it.
Companies that intend to remain competitive and reactive in the self-storage industry need to plan for emerging technologies. Though new technology consistently enters the marketplace, not all companies are able to adopt and make use of it. Opportunities are passing them by. Companies that do not strategize and prepare for the future will be at a disadvantage. Large companies with dozens or hundreds of facilities as well as those just entering the market will benefit from clear tactics in terms of information technology.
James Hafen is the chief technical officer at Salt Lake City-based Centershift, which provides hosted application and online management services for the self-storage and other leased-property industries. For more information, call 1.800.9CHIFT; e-mail firstname.lastname@example.org; www.centershift.com.