By Kevin Kerr
While some people may tell you there’s no right or wrong way to do things in self-storage, I’m here to say there’s most definitely a wrong way. The good news is most mistakes are completely avoidable. By planning an effective operation strategy that involves technology, you’ll begin to see streamlined workflow, higher tenant satisfaction and increased profit. Here are five areas where technology can make or break your business.
Tenants are the life force of any self-storage business. It’s the facility operator’s responsibility to know the difference between keeping them informed and being an intrusion.
The wrong way. While it’s important to stay connected with prospects and existing customers via social media, texts and e-mail, don’t overload them. This is especially important if you combine your personal and business social media accounts, which can result in a landslide of posts.
Deluging tenants with messages is a type of “brute force” marketing. While your intentions may be good, continuing down this path could lead to a long-standing smudge on your company’s reputation as well as quickly being dropped into the spam filter of every possible tenant in your area.
The right way. Don’t be afraid to use these basic tools, but don’t overdo it. Most important, offer value to your message recipients. Build engagement by offering special promotions, referral programs or contests in which they can participate. Then broadcast these opportunities through every medium you have available including:
- E-mails: Offer value in your subject line, such as “Want 50% Off Next Month’s Rent?”
- Text messages: If a tenant has opted to receive text messages, take advantage of the incredible open rate (average 98 percent) and see how well tenants respond.
- Kiosks: Promoting specials directly from your onsite kiosk is easy and requires zero interaction from staff.
- Display terminals: This is a hybrid solution between a kiosk and tablet. It features a customer-facing screen that allows for promotional slideshows while not in use.
Overall, it’s better to have a wide range of deployment options than to continuously hammer recipients from limited sources. By diversifying your delivery, you should see a direct improvement in the results.
There’s a natural cost to running a self-storage business. While it’s unavoidable, it’s crucial to identify and shift expenditures to increase your return on investment (ROI). Let’s look at your marketing.
The wrong way. If hiring someone to assist with corporate marketing isn’t an option, you’re probably handling some of these responsibilities yourself. When attempting to track the effectiveness of these efforts, it’s important to gather as much data as possible. Without properly tracking the source of each new tenant, you’re unable to determine the ROI for your efforts, which could lead to false assumptions and bad spending.
For example, imagine putting an advertisement in the local newspaper and seeing a 10 percent increase in new rentals the following month. Without tracking the source, you might assume the ad was directly responsible for the increase in rental activity when, in fact, it was due to a ferocious squirrel infestation at a competitor’s site. Without accurate information, you would believe your ad had a high ROI, which would lead to poor investment choices in the future.
The right way. There’s nothing wrong with handling your facility marketing on your own, but it’s critical to follow through and gather information properly. Here are some tech-based methods that have proved effective:
- Create your own online surveys. This is an easy, low-cost solution on websites such as SurveyMonkey.com.
- Purchase pre-made surveys. Surveys established by self-storage professionals are readily available from several resources.
- Enter and track the results using your management software. Most software will allow you to create and track lead sources so you can view results on easy-to-read marketing reports.
Now, let’s look at mistakes operators often make in regard to tracking their facility-maintenance tasks.
The wrong way. With site upkeep, there’s often more to manage than you might think. This includes warranties, suppliers, maintenance staff, etc. It may seem easier to shoot from the hip when things need to get done. But not only does this leave you unorganized and unprepared, it can become a severe drain on staff resources and lead to longer completion times.
The right way: Stay organized and integrate your work orders and warranties with your management software. By using your program to track these issues, you not only have your information consolidated, you can better assign charges and manage the budget.
Your company website will be the first impression you’ll make on many customers. Before a potential tenant has seen a single unit or spoken with a manager, he’ll most likely have scoured the depths of your website for discounts, location and features. He may even decide whether to contact your facility or a competitor based solely on what he finds online.
The wrong way. After the initial contact, your website’s value should continue to increase for the tenant. If all you’re using your website for is face-value aesthetics and information, you’re severely hindering your potential. If you’re not offering some form of industry-standard integration on your website, I can guarantee you’re either losing business or, at the very least, irritating some tenants.
The right way. Most software providers now offer Web-based programs that work directly with your website. Offering online customer service will not only keep your facility managers free to perform other tasks, it will lead to higher tenant satisfaction and a competitive edge within your market. Here’s what you should offer:
- Online rentals: This is a proven solution that allows tenants to complete the full rental process online.
- Online reservations: If you’re hesitant to forego meeting prospects face-to-face before renting, reservations give you the opportunity to gather information in advance and streamline the process without losing the opportunity to meet with new customers.
- Online payments: This is an important tool. Allowing customers to pay online maximizes their convenience while keeping site managers free for more pressing matters.
Raising rental rates is a touchy subject for some self-storage operators. However, if you’re regularly sitting between 90 and 100 percent occupancy, you may be limiting potential profit if you aren’t using some revenue-management tools.
The wrong way. Not doing rate changes at all. Of course, tenants aren’t going to bake you brownies because they’re so happy about an impending rate increase; but depending on the increase, the amount of pushback will be surprisingly small.
The right way. For the best results, use dynamic and automated methods for adjusting rents instead of facility-wide rate changes. Here are some options:
- Rate changes by occupancy (push rates): Using a tiered system, you can set your street rates to automatically drop or increase based on current occupancy. This is a good way to drive sales with a low occupancy and increase revenue with a high occupancy.
- Rate changes by day: Have you been tracking rental sources like I suggested? Good, then you can easily determine if certain days of the week are better than others for new rentals and adjust move-in rates for those day accordingly.
- Automatic annual changes: This is a very low-risk, high-reward method to revenue management. Instead of applying rate increases to existing customers facility-wide, use your software to automatically apply a rate change to every new tenant at separate, pre-determined times. This method lies dormant until you’ve set it to take effect. For example, it might notify a tenant of an intended 5 percent rate increase after 10 months, and then apply the rate increase in the 11 month.
Knowing your facility’s trends and using a combination of these automated rate methods has the potential to yield amazing results. If you’re above 90 percent occupancy, you may want to try a rate change based on occupancy (5 percent) for new tenants to reflect supply and demand while an automatic, time-based rate change (5 percent) lies dormant for 10 months. Assuming the tenant stays two years and the unit’s base rate is $100, you’d generate an additional $193.50 in pure profit without any aggressive changes or ever having to press a button—and that’s just from a single tenant.
Maybe you’ve been working in the self-storage industry for decades or you’re fresh on the block. Either way, unless you’re certain your facility is running to its highest potential, it’s important to acknowledge mistakes and adjust accordingly. I suggest starting with one small change. If you’re happy with the results, consider trying another, and then another. Before you know it, you may have just made a noticeably positive impact on your operation.
Kevin Kerr is the marketing and sales coordinator for Storage Commander, a Murrieta, Calif.-based supplier of Web-based and onsite facility-management software. To reach him, e-mail [email protected]; visit www.storagecommander.com.