Serving Up Truck Rentals

Using this growing ancillary to become the competition

By Kirk Nash

Ifyou talk to any entrepreneur in self-storage and ask him where he wants to seehis business in the future, his answer will depend on his level of currentsuccess. If he is just starting out, he might say, "I want my business togrow and become the best and biggest it can be. I want to take it to thetop." But if he's more established and doing well, he might say,"Business is good. I'm making money. I'd like to see more of thesame." These are average answers from average people.

The insightful, creative, far-thinking entrepreneur would answer thisquestion in a much different way. His answer would be, "I want to becomethe competition." This person wants to be considered by all in his field asa worthy rival. And he knows that if he is to be considered "thecompetition," he must be doing a lot of things right. He must raise thestandard with a quality product, his prices must be fair and, most important,his customer service must be complete, ongoing, fresh and acute. His businessacumen tells him he must continue to do all the things that have helped get hisbusiness to the pinnacle, and constantly offer innovative marketing andcustomer-service ideas and implementations.

I don't know about you, but I want to become the competition.

The Other Pieces

Occupancy
Occupancy is the No. 1 concern of self-storage entrepreneurs, and rightlyso. The more space you have rented, the more profitable you are. If you are 70percent occupied, you have a problem. You need to fill your space. On the otherhand, if you're 100 percent occupied, you have a different problem. You eitherneed to build more space, raise your prices or both.

Price: Doing Things the Easy Way
Storage-facility owners seem to fall into one of four categories: 1) theyhave just completed construction of a facility; 2) they have just purchased anexisting facility; 3) they are expanding a facility; 4) they own one of severalnew facilities sprouting up all over the market. Regardless of the category youfall into, increasing occupancy is your main concern. And it is a constantbattle due to the transient nature of the business.

Your task is to replace those tenants that leave each month and add more.Now, many operators/managers choose to take the easy way out by discountingstorage rates or offering a free month's rent. Why? Because it is the consensusthat when shopping, customers are only concerned about price. Look at anyfacility in the storage industry, and it's almost a guarantee the facility withthe cheapest rates will not be the facility with the highest occupancy.

If you are the entrepreneur who believes cheap rates are the key to higheroccupancy, you are wrong. The only thing you are truly accomplishing is theundersale of your product and the depreciation of your business. You arecompromising your storage facility for higher occupancy, and bringing the networth of your business down. This will catch up with you. You must become morecreative in your marketing and customer service. Remember: You want to becomethe competition.

Advertising
Derby Brown once said, "The business that considers itself immune tothe necessity of advertising sooner or later finds itself immune to thebusiness." Is there a storage facility in the world that isn't in theYellow Pages? Probably not. Advertising is a necessity for storage facilities.Storage is not an impulse purchase. People either need it or they don't. How dothey choose where to store their goods? Convenience, location, familiarity,availability, service and price. They cannot, however, choose you if they don'tknow you exist. Your task is to make them knowledgeable of your existence.

Many facilities are built on major thoroughfares; they have a great location.Some facilities have a large, can't-miss sign and have established familiarity.Other facilities have large, color ads in the Yellow Pages to make potentialcustomers aware of their presence. If you're already doing all of those things,is there still more you can do? There is if you strive to become thecompetition.

Staff
Most storage-facility owners are keenly aware of the importance of aknowledgeable, courteous and well-trained staff. The first inquiry may be theonly opportunity to sell that individual. How does your staff answer the phone?What information do they accumulate and assimilate from that prospect? Mostmanagers are well-versed and do an excellent job acquiring enough information toaccurately determine the size unit the prospect needs. They also do an adequatejob quoting the price of the unit, availability and any specials they may berunning. But are they doing enough? Not if you want to become the competition.

Rental Trucks
Assume your occupancy is 85 percent, your location is excellent, you have agreat sign and an attractive Yellow Pages ad, your prices are higher thanaverage, you don't give away a free month's rent, and you have an impeccablestaff. Have you become the competition? Probably not. Why? Your occupancy rateis too low. You're missing something. What is it that keeps you from becomingthe competition? Perhaps, rental trucks.

Yes, rental trucks. Are rental trucks the most important ancillary productsin the storage industry? No, locks are. Rental trucks are the difference betweenyou and the competition. Let's look at some of the major players in theself-storage industry. If you examine the top 10 to 20 self-storage operators inthe country, you will find nearly half of them offer rental trucks. The otherswill soon offer them. Why? Because that's how they attract their prospects. Moststarted in the storage business and added rental trucks. One started in therental-truck business and added storage.

Pay attention to people moving out of your facility over the next month. Whatmeans of transportation are they using? Trucks. Very few move in or out inanything other than a truck. U-Haul, Ryder, Budget, Penske, On the Move, cousinBill's pick-up--they're all trucks. If you don't currently offer rental trucks,you will.

One-Stop Shopping
BillSmith needed a 10-by-20 storage unit for six months. He called ABC Storage andXYZ Storage. Both facilities had the size he needed at the exact same price.Both facilities are exactly three miles from him. Both facilities offered locksand packing supplies for sale as ancillary products. ABC Storage offered rentaltrucks and XYZ did not.

Bill needed a truck to move his goods into the facility. If he leased spacefrom ABC Storage, he could also rent his truck from the same place. If he leasedspace from XYZ Storage, he would have to go elsewhere to rent a truck. Where didBill sign his lease? You guessed it--ABC Storage. Bill liked the idea ofone-stop shopping, and ABC Storage had become the competition.

Add Profit
Storage facilities with rental trucks have a higher occupancy rate thanequal facilities without trucks. Higher occupancy rates translate into moreprofit. But let's take it a step further: You will make additional income fromrental trucks. Whether you use a large rental-truck company that pays you acommission for truck rentals or you add your own truck, it will generateadditional income. The No. 1 ancillary product to storage should be rentaltrucks.

And, for those of you who have taken the easy way out by comping one month'srent, why not comp the rental truck? It is far less expensive to comp the truckthan the space. When you appraise your business, it will show lost revenue fromcomped space, thus deteriorating your bottom line and, consequently, loweringyour net worth. A comped rental truck will not show as a negative, but rather ascredit on your balance sheet, because you have the rental of trucks to thosemoving out of your facility to make up for those giveaways to those moving in.So, if you insist on a giveaway, give the truck, not the space. Become thecompetition.

Newly Armed Staff
When Bill called ABC Storage, the staff answered the phone with "ABCStorage and truck rental, how may I help you?" The manager of ABC Storagethen asked Bill how he planned to move into the facility. He informed themanager he would be renting a truck, and the manager proceeded to reserve onefor him. All of his needs were met. ABC Storage had a completely satisfiedcustomer. If Bill ever needs storage in the future, he will surely go to ABCStorage. And if anyone he knows asks him about storage, he will surely referthat person to ABC Storage, because remember: ABC Storage has become thecompetition.

New Marketing/Advertising
Imaginea truck--your truck--driving throughout your market area advertising yourbusiness, a moving billboard advertising your facility. Everywhere the truckgoes, your logo, advertising your facility, will be seen by thousands ofprospective customers. Every time you comp the truck to someone moving in orrent the truck to someone moving out, you are advertising your facility whereverthat truck goes.

If the truck isn't being used on a given day, park it in a high-traffic area.Let local charities know the truck is available for their use free of charge.Let the high school use it to pull a float in the homecoming parade. Advertisingyour business on your truck will enhance the familiarity of your storagefacility immensely. And for those of you who are truly sophisticated, you canmarket advertising to others on the sides of your truck--local realtors, titlecompanies, restaurants and auto dealers are always looking for innovative waysto advertise their businesses. For a small monthly fee, you can advertise theirbusiness--in addition to your facility--on the side of your truck. You are nowon your way to becoming the competition.

Rental trucks are the wave of the future in the self-storage industry. Inanother five to 10 years, you will be hard-pressed to find a storage facilitywithout them. Zoning and architectural standards are becoming more and morestringent for self-storage facilities. The consumer is getting moresophisticated and demanding. Record storage, wine storage, cold storage,climate-controlled storage were, at one time, a rarity. Now they arecommonplace. Your choice is to lead or follow. Self-storage customers areseeking one-stop shopping for their storage, packing and moving needs. Rentaltrucks can fulfill that need.

If you have recently built or purchased a storage facility, expanded yourexisting facility or think your market is shrinking due to expansion by othersin your area, it is time for you to consider adding rental trucks to yourmarketing and customer-service plan. Do this, and perhaps you, too, will becomethe competition.

KirkNash is vice president and CEO of Boerne, Texas-based On the Move Inc. On theMove offers a rental-truck program to self-storage and other industries thatincludes trucks, insurance, rental forms, handtrucks and furniture pads. Formore information, call 800.645.9949 or visit www.onthemovetrucks.com.