By Keith Ruehle
You designed the perfect ad, spent weeks negotiating with the Yellow Pages representative and, finally, the new phone book is out. Your ad is working; it's drawing calls from many prospective customers. It seems all is well, right? Not quite.
The perfect self-storage prospect is someone with the Yellow Pages opened to your ad and his hand on the phone. You could not ask for a better potential customer. Statistically speaking, he's perfect: He lives nearby, has an immediate need, can afford storage, and is taking action right now. Here's the best part: He's dialing your phone number! Life is great--but only if your manager answers his call.
The Hard Facts
Actual self-storage statistics indicate nearly one-third of the best possible prospects will never even speak with a facility's manager. How can this be? Maybe he's calling before you open or after you close. Perhaps the phone is busy. Or maybe the manager is out fixing a roll-up door and the prospect is getting the answering machine. Will he leave a message? It's not likely. Research shows only two of 10 callers will leave a message. Will he call back? Sorry. Chances are he will simply move his finger down the page to the next listing and call your competitor.
The self-storage industry is unique in that more than 90 percent of its business transactions occur over the phone. Think about it: If your phone lines were somehow down, business would temporarily come to a halt. Nothing would be more important than getting them operational again. The telephone, being the primary vehicle of customer inquiry, is the lifeblood of your business. If the phones are ringing, business is good. But given the importance of this communcation tool, it's amazing how little most business owners know about their telephone traffic.
How Much Do Lost Calls Cost You?
There are actually two types of losses. First, there is the loss of advertising costs. This is simply calculated by adding up your yearly advertising costs and multiplying by 30 percent. Far more expensive and not quite as obvious is the cost of lost opportunity. This is essentially how much money you could have made from missed prospects. The lost opportunity cost is calculated by knowing how many prospects are missed, your average closing ratio and the value of a new customer. For example:
You logged 140 new-prospect calls this month. The industry average indicates you missed three of every 10 calls, therefore, you were actually called by 200 new prospects. You missed 60 calls. Your average closing ratio is 50 percent, which means you could have converted 30 of these missed calls into paying customers. Assuming a new customer is worth approximately $500 over the length of his contract, the loss of 30 customers in a month equals the loss of $15,000. Your actual numbers will vary slightly, but between lost advertising and opportunity costs, the net result is staggering.
Prevention and Recovery
The good news is you can take some simple steps to reduce the number of lost prospect calls. There is also a creative way to recover the lost prospects themselves. First and foremost, there is nothing better than having a friendly, well-trained manager answering the phone. All self-storage businesses have times of the day when the phone rings the most. Make sure your manager is present in the office during those times when the majority of calls come in. They should always be available to answer the phone during those times.
One way to reduce missed calls is for the manager to keep a cordless phone with him at all times when he is away from the office. Some self-storage facilities are experiencing good results with the new 2.4 GHz multiline portable phones, which have a much longer range than the older 900 MHz phones. It is reported the reception is good around the yard, but degenerates inside a metal building. A good system with one handset sells for about $500. It does seem a bit expensive, but one additional customer will pay for it.
For a time, cell phones seemed to be the solution. In this instance, the manager can dial a code to forward the business line to the cell phone whenever he leaves the office. The reception is good even within metal units. When the manager returns to the office, he dials another code to release the forwarding. Unfortunately, many store managers have reported the constant forwarding and un-forwarding was problematic. In many cases, unbeknownst to the manager, calls remained forwarded to the cell phone after it had been turned off.
If prospects receive no answer at the site, forwarding them to a call center is another option. Call centers are better than answering machines--but only if a live operator answers immediately. If the caller has to enter menu selections, you can expect as many hang-ups as with a machine. Remember the prospect has an immediate need and wants to speak with someone now. He has just heard four rings, a click, another ring, and is now required to enter a menu selection. There is a good chance he will simply call the next listing in the phone book.
Another problem identified with forwarding prospects to a call center is many managers realize they now have a backup. Over time, they answer fewer phone calls. This results in even more prospects hanging up before a live person answers. Call centers work best for after-hours callers. In this scenario, the prospect can be forwarded immediately, reducing the risk of him hanging up before speaking with a salesperson.
While it is always best to answer phone calls personally, some calls will inevitably be missed. The good news is there are basically two ways these lost calls can be recovered. One is automated, and the other uses a manual system. They both use a caller-ID service from the phone company.
In the manual system, the manager uses a small caller-ID display unit. He simply checks the device when he returns to the office and writes down the name, phone number and the time of the call on a form. This form then becomes the call sheet. The manager simply places a return call to each prospect and says, "Hello. This is John Doe from City Storage, and I see from my caller ID that you tried to reach us. I apologize for missing your call. Is their anything I can do for you?" When the manager is diligent making return calls, many extra rentals will result.
One Atlanta company offers an automated system that recovers lost calls. This service utilizes a proprietary device installed at each self-storage location. The device monitors every aspect of incoming and outgoing calls (except the conversation) and reports the information to a data center. There, the data is compiled, analyzed and merged into a number of reports, graphs and maps. These are sent to the owner on a regular basis. For example, graphs are compiled indicating when call volumes are heaviest as well as when most calls are missed. This information helps managers determine when outside activities should be performed and part-time employees scheduled.
One of the most beneficial aspects of this service is a daily report of missed calls. Each morning the site manager receives a list of calls missed during the previous day. He can then make a courtesy call to each of the prospects on the list. The service can also denote calls from existing customers and vendors. Furthermore, it can cross- reference the missed-call list with the outgoing calls made to check the manager's diligence in following up with missed prospects.
Some managers are reluctant to make return calls to missed prospects. They may feel it is intrusive or they just don't like the idea of placing them. Self-storage managers claim that when they call missed prospects back, they are generally receptive and appreciative the manager cared enough to call. According to John Bauer, manager of a Shurgard facility, "We rent an extra two to four units each month by calling prospects back. They often thank me for calling them, even the ones who don't rent."
It is essential you implement at least some of these ideas to reduce and recover missed prospect calls. Don't let them slip through the wires. You have already paid big money in advertising dollars to get these prospects to call, so revenues from any prospects you can turn into paying customers goes directly to the bottom line.
Keith Ruehle is the vice president of the Client Discovery Service, which has provided sales, marketing and operational information for the self-storage industry for more than three years. This unique service monitors all telephone traffic to and from individual locations anywhere in the country. For more information, call 800.240.4637; e-mail [email protected].