Time and Day
At some point, despite your best sales presentation and lease review, some of your tenants are going to become past-due. Assuming you have a collections system, it should kick into gear now. Your ability to maximize facility revenue will depend on it.
The first step is to plan the event. Set aside time to make your calls, whether daily or weekly, depending on your workload. Make sure you have as much information available as possible. Set a manageable goal for the number of calls to make based on the time available. Focus on those collections calls, and try not to multi-task.
Then decide when to call. Collection calls should be started the day a customer becomes past-due. Tenants should understand that on the day they signed the lease, they created an expectation that they would pay rent on time, and you intend to hold them to it.
Effective calls can be made morning, noon and night, and times should be staggered from day to day. For example, you may schedule calls on Monday at 2 p.m. for two hours, and Tuesday at 10 a.m. Change the schedule the following week. If you keep calling John Smith about his account at 10 a.m. every day and he never answers the phone, it’s probably because he isn’t home at 10 a.m. Try another time.
You must also decide whom to call. Starting with the As and calling through the alphabet rarely works because Zombrowski will never get a call. Starting with the really late tenants and calling by past-due date rarely works because the not-so-lates won’t get a call until they’re really late. Every facility is different, but you might start calling a particular building or floor on one day, another on the next. Whatever your system, it’s important to ensure every past-due tenant gets called, and regularly.
There’s one particular tenant who must be called every day, and that’s the one who lied to you about paying yesterday. When you fail to call tenants who made commitments to pay the day before, you’re letting them know it’s OK to lie to you. Broken commitments must be addressed immediately after the promise is broken.
Making the Call
Once you start making calls, consider these important points:
Communicate with confidence. Sit up straight and don’t multi-task.
Never lose your cool. Don’t take tenants’ refusal to make their payments on time as a personal slight.
Take good notes. Document names, dates and times regarding commitments to pay.
Have access to the tenant-information sheet, not just the past-due list. There’s a great deal of info on that sheet you should be using to make effective calls.
Be careful when leaving messages. Never leave an account-specific message with anyone but the tenant or on an answering machine. Right-to-privacy issues still come into play with self-storage collections calls.
Increase intensity. The intensity of calls ranges from “Hey, just wanted to remind you about your payment due yesterday” to “Your goods are scheduled to be sold at auction Friday morning at 10 a.m.” The point of collection calls is to get the tenant to make his payment while retaining him as a customer. Use tact and understanding while clearly communicating your concern.
Effective collections are more science than art. Having a clear and consistent collections effort means increasing revenue and decreasing stress levels. Create and use your system with the “stick-to-it” finesse that defines a self-storage professional.
Bob Copper is the owner of Self-Storage 101, a full-service consulting firm specializing in training, market and feasibility studies, and helping owners and managers reach higher and more profitable levels of operational effectiveness. To reach him, call 866.269.1311; e-mail firstname.lastname@example.org; visit www.selfstorage101.com.