Statistically, more than 90 percent of self-storage operators have never ventured into records management. Or so they think. Virtually every facility in North America already stores business records, though perhaps unknowingly. Self-storage is the world’s second-largest provider of the service. The competition comes from commercial records centers (CRCs).
You may wonder how CRC service compares to that of a typical self-storage. In a nutshell, storage facilities are better positioned to attract customers while CRCs have the upper hand in specialized benefits. This creates an exciting partnership opportunity. Let’s look at the facts.
Ahead of the Game
Self-storage facilities have something CRCs don’t: walk-in traffic. No one calls or walks into a CRC, primarily because they’re invisible in many markets. Consider the following:
- CRCs can’t be seen from the freeway like many self-storage sites. Typically, they’re found in warehouse districts or industrial parks.
- CRCs have little or no signage. Clients of traditional records centers don’t want it advertised that business records are stored in the building. Some clients even request no signage on delivery vehicles.
- It’s too expensive for CRCs to call on most small-business accounts. With the cost of a sales call estimated at hundreds of dollars, consider the cost of preparation, prospecting and manpower.
When it comes to targeting small businesses, self-storage’s walk-in traffic gives it an advantage, especially since nearly 25 percent of visitors represent small businesses. Furthermore, just about everyone who walks into a self-storage facility has a relationship to a business owner, manager or employee.
Remember, small-business records are intensely profitable. The yield per unit on these accounts is higher than any other type of storage, bar none. However, while self-storage facilities are better positioned to attract customers, their services are often inferior to those of CRCs.
Accounts and Services
So far we’ve learned that self-storage earns the records accounts, while CRCs better satisfy customer needs. Doesn’t it make sense to build a bridge between self-storage facilities and CRCs, as long as both sides make money? Storage operators are in an excellent position to sell accounts to CRCs. Below is a step-by-step plan for those interested in this new win-win venture.
1. Find the best local providers of traditional records-management services. These are easily found in the Yellow Pages under “Business Records Stored” or “Records Storage.” Avoid the national companies and look for entrepreneurial operators.
2. Set up a meeting with the CRC owner or general manager at your office. Holding the meeting at your own office gives you a home-court advantage and allows you to set the agenda.
3. Have a plan developed and be sure to take control of the agreement. The plan should include several packages such as “economy,” “small business” and “professional.” Each package is bundled with pricing and includes particular services. (Read more about “Small Business Packages” at www.insideselfstorage.com/articles/491RECOR.html.)
4. Shop for the best deal, looking citywide for the best partner. Negotiate the deal and leverage your strength—that you will be bringing them high-yield accounts.
5. Determine a compensation plan. A fair amount of compensation would be 50 percent to 100 percent of the first year’s storage revenue. Since this is actually billed and received over a 12-month period, you should expect to receive payments over the next year, starting 60 days after the contract is signed.
6. Create a lead-generation program for larger accounts (which usually require client-needs assessments that self-storage sites don’t provide, but CRCs do), entitling you to kickbacks for sales leads and prospects furnished to the CRC.
7. Provide the CRC with a turnkey system including marketing materials, personnel training to sell the service, accounting for compensation tracking and a partnering agreement.
Understanding the Benefits
Why would any self-storage operator want to give away business? If you offer records storage and are unable to provide all the services to customers—particularly those who have hundreds of boxes stored at your site—you may end up losing business in the long run. Plus, industry observers report most small businesses that rent from self-storage facilities need space for materials and equipment—not just business records. Creating an alliance with a CRC means you can have your cake and eat it too.
So if you don’t want to do records management yourself but wish to capitalize on business that already walks in your door, this may be just the opportunity for you.
Cary F. McGovern is the principal of FileMan Records Management, which offers full-service assistance for commercial records-storage startups and sales training in commercial records-management operations. For help with feasibility determination, operational implementation or marketing support, call 877.FILEMAN; e-mail firstname.lastname@example.org; visit www.fileman.com.