Most self-storage operators fear new competition coming into their market. When it happens, they typically become reactive instead of proactive. For example, when a new facility pops up around the corner, most of them decrease rates and pump up promotions for fear of losing market share. Instead of anticipating and preparing for increased competition, they are caught by surprise.
Is it possible to hold rates steady or even improve on income per square foot in times like this, or would it be too risky? Absolutely, it can work, if done properly. In fact, if rates increased, it might entice the new competitor to offer higher rates and spur on a win-win situation for both parties.
An effective way of combating competition and enhancing the profitability of a self-storage business is to develop the proper systems and create accountability within operations. This makes your team responsible for achieving goals and objectives established by the company.
Most storage operators need better systems to hold employees accountable for achieving results. Start by tracking and measuring key performance areas to improve your operation in the long run. How can you enhance aspects of your business if you dont know where you stand?
One area that needs to be measured within the sales process is how many callers are converted to renters. How many walkin customers sign a contract? With a measurable system in place, everyone involved in the selling effort knows the conversion rate and what is expected in terms of results.
Tracking gives each staff member a measurable scoreboard of where he stands in relationship to what is considered poor, average, good and great performance. Its important everyone becomes involved with setting the standard to create the consistency needed for long-term success. Make it an all-inclusive project.
Another way of establishing accountability is to set goals within the key areas of your business. For example, you might set a monthly goal for unit rentals that is realistic but challenging. This gives employees a target to aim for and will help to set the expectation in terms of acceptable and exceptional results. Employees tend to like monthly goals because they are more immediate than quarterly or annual objectives and easier to track.
If the team is up against a challenging month as a whole, everyone can wipe the slate clean for the next month and concentrate on re-focusing on future achievement. This can strengthen the accountability of the team if the level of expectation is measured in a way that is understandable to all.
By providing a monthly storage goal, youre also creating a way to measure results and pinpoint areas for improvement within the sales program. Once the areas for improvement are recognized, additional training can be administered. This takes operations to a higher level and ultimately creates an atmosphere of discipline.
Review and Renew
All operators need to establish a system to review employees objectively rather than subjectively. Subjective evaluations can take away from creating an atmosphere of discipline and lead employees to complacency. For example, if the manager did not clearly understand his job description and expectations, he will probably fall short of what he can actually accomplish.
What would happen if the manager had control over his own destiny and the outcome of his performance review? If administered and communicated properly, this can be hugely beneficial. If you can move toward more of an objective appraisal, you can take employee accountability to a higher level.
You might consider a monthly evaluation that becomes a part of the annual performance review. Areas to measure might be monthly storage goals, telephone mystery-shopping scores, sales-conversion ratios, customer referrals and key-influencer referrals to name a few.
Always measure areas impacted by employee performance. This entitles staff to more control over the outcomes of their evaluations and their increases. Its also critical to review administrative and other important business functions. This is just an illustration of what can be measured and how to tie it into the evaluation process for higher levels of accountability.
Sink or Swim
As many markets across the county experience over saturation, the average operator must find ways of improving operation. It seems economic occupancies are often low because of a reactive tendency to giveaway the store when competition comes into the marketplace. Its the mindset of a self-storage operation that determines its outcome.
In other words, if the attitude of employees is to be more proactive in finding ways to improve the operation, they will weather the storm and come out shining. Facing adversity will either strengthen or weaken a self-storage business. If handled properly, increased competition can take you to an entirely new level.
The question is not whether competition will continue, but if will you equip yourself to handle it proactively. Success is never-ending; its doing everything consistently well over the long-haul. Too often, operators feel they have reached their highest level of success. When this occurs, complacency can take the wheel and lead business to a dead end.
Dont let the competition whisk past you. Always remember: Success is not a destination; its a continuous effort.
Brad North is the founder of Advantage Business Consulting, which specializes in facility management, feasibility, onsite sales, marketing and operational training for the self-storage industry. He contributes articles to various self-storage publications and is a nationally recognized speaker and consultant within the industry. For information, call 513.229.0400; visit www.advantagebusinessconsulting.com.