Thoughts From the Road

By Jim Chiswell

I had the recent honor of speaking at the very first conference of the Illinois Self Storage Association (ISSA), which is now just over a year old. The association is off to a good start, with 70 owners/operators and vendor members.

I want to congratulate Jack Murphy, Kevin Heiden and John MaanDeKok for their personal efforts, and the financial resources they have invested in launching the ISSA. This association's leadership, under President Murphy, has already taken a major step in the group's growth. Rather than depending on the work of volunteers, they stepped out in faith and retained a professional association manager, Michael Lane, to run the day-to-day operations. Michael's 20-plus years of association experience has already paid off significantly for all of the self-storage owners in Illinois.

The Illinois Association's goal is much like that of the Texas Mini Storage Association (TMSA) and the New York Self Storage Association (NYSSA). They not only provide legislative monitoring at the state level, but also provide a vehicle for owner and manager communications, cooperation and learning. The establishment of state organizations is a critical next step in the growing maturity of the self-storage industry.

The ISSA, with direct help from the TMSA, is already planning to publish its own version of the Texas Gold Book. For those of you not familiar with the TMSA Gold Book, it is, in my opinion, one of the finest resources that has ever been published for self-storage operators. It contains up-to-date information on Civil Codes, Lien Laws and other legal matters essential for all self-storage facility owners and managers to be familiar with in the operations of their properties.

There are other state associations starting to evolve around the country. It is vital for the long-term health of our industry that these efforts succeed. If you are an owner in a state with an established association or one just being developed, get behind them with your membership dues check and a commitment of your time. I feel this is especially true for the major national and regional companies that, in many cases, are standing on the sidelines and not supporting these organizations. Yes, I have heard all of the reasons why people don't join. The bottom line is that we all owe something back to the industry where we make our living. If you don't have a state organization, get some industry friends together and get one started.

There is one final opinion that I want to express about associations. I personally think that the time has come for the national Self Storage Association's (SSA) Board of Directors to fully recognize the importance of state associations to our industry. I feel that the national board needs to totally restructure the SSA. By dismantling the antiquated regional structure and creating a new governance board made up of representatives from each state association, we can take a giant step forward in improving the focus of national activities on the problems facing our business. I am convinced that a new direction for the national SSA is in everyone's best interest.

I have posted on my website (www.jimdot.com) the state associations that I have been able to identify, including their address, the name of a contact person and their URL (when available). If you are part of a new association that is not listed there, please drop me a note or e-mail, and I will add you to the list immediately.

How Much Does the Telephone Really Cost?

When I ask most owners and managers that question, I am given the per-month cost of the phone bill. In a few cases, I am asked, "Does that include my Yellow Pages costs?" The point I am making is that the cost of the telephone is really every dollar that you spend on marketing your facility.

Almost every marketing dollar spent is designed to get the phone to ring. What happens from that point is the subject of an entire day's seminar. I would like to challenge you to take a few minutes and fill in the blanks for your own facility. The following is an example for you to follow:

• Total Marketing Dollars = $18,000
• Total annual calls = 480

Only count your prospective customer calls, not calls from existing customers. Take your total marketing dollars, and divide them by the total of annual calls. In this example, the cost per call is $37.50. That sounds like a lot of money to me.

Now take it one step further with this calculation:

• Total new rentals last year = 175 units
• Average length of stay = 8 months

The average rental rate per month is $100. Multiply the average length of stay by the average rental rate per month. The average rental customer who stays an average of eight months brings in $800. If you rented 175 units, total sales would equal $140,000.

Now take total annual telephone calls (480) and divide that number into the figure for total sales ($140,000). You discover that each telephone call is worth $291.67. It doesn't matter if the person on the other end of the line ended up renting.

If you run these numbers for your facility, you might be surprised at just how much each phone call costs you, as well as what each call is worth over the course of the year. So, managers, every time you answer a phone call from a prospective customer, you will realize how important it is to give that caller your undivided attention and best sales effort. And, owners, it really is important that you provide your managers with educational opportunities to improve their telephone/sales techniques.

The more you understand the internal operations of your facility, and what things really cost, the more effective you will become as a manager and an owner. I would be very interested in the results that you obtain for your facility. Send me an e-mail or drop me a note. If I receive sufficient participation, I will publish the results in an upcoming article.

Jim Chiswell is the president of Chiswell & Associates of Williamsville, N.Y. Since 1990, his firm has provided feasibility studies, acquisition due diligence 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. He can be reached via e-mail at Jchiswell@adelphia.net; phone (716) 634-2428; www.jimdot.com.