|The Inside Scoop|
Self-Storage Is a Product, Not a Right
There is such a huge emphasis on customer service in the self-storage industry these days that operators sometimes forget they provide a product, not a necessity of life. We're not serving water in the Sahara desert (even though it might sometimes feel that way to a customer in need), and we are under no obligation to provide storage to those who cannot pay for it or abide by our rules. Self-storage is not essential to survival. Right?
Last week in Las Vegas, during the Inside Self-Storage World Expo, I was sitting in the back of the room during Bob Copper's seminar, "Improving Your Self-Storage Collections: Effective Skills to Get the Rent!" If you've never heard Bob speak, I encourage you to check him out—but only if you can handle the truth. Bob doesn't pull any punches, and after decades in this business working with hundreds of owners and managers to improve their sales and collections, he knows a few things about self-storage and good old human nature.
At some point during the presentation, Bob was talking about delinquent tenants and the excuses they serve up for not paying rent, and the tactics they sometimes employ to get an operator off their back. Attendees (your fellow operators) were expressing the difficulties they've had in standing firm with late payers, especially if a tenant has a tale of woe that tugs the heart strings.
One woman asked, "What do I do if they offer a partial payment that's only enough to delay the lien sale but never enough to cover the debt?" Bob's answer? "Don't take partial payments." But the operator was concerned about whether she had a right to refuse and whether that's a poor service strategy. Bob's take on the subject? "Self-storage is not a Constitutional right."
Among the many lessons self-storage operators have had to learn in recent years as the industry landscape has changed is that customer service is a fundamental sales technique. In a highly competitive market and online environment, service can be the key to differentiating your facility from others and winning or keeping the customer's business. But are managers becoming so focused and even paranoid about providing great service that they now fail to be in control of their business? Are they giving away too much and giving in too often?
Sometimes there's a fine line between helping and serving a customer and being taken advantage of. At the end of the day, you sell a product. You wouldn't expect to go to the grocery store and walk out with a cart full of goods without paying, or eat at a restaurant and expect to leave the bill unpaid without consequences. So why would you allow a customer to occupy your storage space and default on rent? And then feel badly when you need to harass the customer or ultimately use the legal remedy provided to you by law? If you fail to pay rent on your apartment or the mortgage on your home, you will eventually be homeless, regardless of the circumstances that got you there.
I'm not saying you shouldn't have compassion for tenants. Every situation is unique, and it's up to you to determine if a customer legitimately deserves some leniency. Just remember that every delinquency impacts the overall profitability of your store, and it's your job to safeguard that income.
Self-storage is not about survival. No facility operator wants to see a customer lose his goods because of unpaid rent, but unless a tenant is using the storage unit to store his money, medication or food, he'll likely live through the loss. Your job is to get the rent. It's also to enforce the facility's policies and procedures. Self-storage is a product, not a human right. It comes at a cost, just like most things in life.
If you'd like a copy of the seminar Bob Copper presented at the expo, you can pre-order a DVD at the Inside Self-Storage Store. He teaches why successfully collecting rent is one of the most important skills you can learn, the most effective collection techniques in the industry, how the collections effort starts during the sales process and more. You can also watch these free Bob videos on the new Self-Storage TV:
- Self-Storage Around the World: Reflections of Non-U.S. Facilities on Six Continents
- Self-Storage Associations and Operators Combat Sales-Tax Hike in River Grove, IL
- Amsdell Cos./Compass Self Storage Plans 3-Building Conversion Project in Downtown Cleveland
- STORE Self Storage & Wine Storage in Palm Beach Gardens, FL, Hosts Goodwill ‘Storage Wars’ Charity Event
- ‘Tis the Season to Embrace Your Self-Storage Competition