The self-storage industry is about to face a watershed moment. Since 2000, the estimated population of the United States has increased by about 44 million people, a 16 percent bump. Since 2010, it has increased an estimated 17 million, equal to 14 percent growth. Despite these figures, average rentable square feet of self-storage per person has declined approximately 3 percent since 2008.
When you combine these demographic changes with a decrease in the overall amount of storage available, it’s easy to see why the industry is experiencing overwhelming demand. It’s not magic, luck or individual genius; it’s just statistics.
Historically, self-storage rental rates and occupancies have never been higher. Revenue and expense management have been optimized with technology, and new competition has been relatively stagnant. This mixture has been positive for property owners, investors and managers, but there’s a hidden dark side that’s about to reveal itself in the form of operational complacency.
Self-storage, just like other industries, is subservient to supply and demand. With new development on the horizon, some operators are unaware or have limited experience in how to excel in a competitive market. The new market dynamic won’t result in everyone having 90 percent occupancy and customers appearing out of thin air. We need to go back to the basics. It’s time to invest in maintenance programs, marketing campaigns, sales, customer service and technology. It’s time to get back to fundamentals.
Take a walk outside and review the curb appeal and maintenance status of your facility. Dig deep into aesthetic and mechanical issues. It’s harder to market and sell a property to a potential customer if it appears to be falling apart. Ask yourself:
- What maintenance items need to be addressed?
- What projects are vital to promoting your facility to customers? Why haven’t these items been addressed until now?
- How are these items to be reported and to whom?
- What budget will be allocated to addressing these projects?
- Who’s responsible for hiring vendors, and what’s the procedure?
- What’s the invoice amount that may be approved by frontline staff? What’s the procedure if the invoice will be higher than that amount?
- Are there any bottlenecks in your operation that stall approval for maintenance and repairs?
If you don’t have a maintenance schedule, it’s time to create one. Make sure you’re using the plan and addressing tasks in a timely manner.
Your next task is to review your facility’s marketing plan. If you don’t have one, put one together. It should take into consideration the programs you’d like to implement, the budget allocated to these programs for materials and training, and how they’ll be measured and distributed.
Review your facility’s website, pay-per-click advertising, Google listings and social media accounts. Set up meetings with your online-marketing company to ensure these items are designed and implemented correctly. Use these meetings to review your online reputation. If there’s an issue, address it immediately. Reviews are important and will only become more critical in a competitive marketplace. Finally, address any online inaccuracies in contact information, pricing or map placement.
Also, make sure you have a solid referral program and you’re promoting it to existing and former customers. Consider implementing other marketing strategies such as direct mail, additional signage and programs that specifically target local businesses like realtors, apartment complexes and movers. Once you have a complete plan, implement training with staff.
Next, it’s time to optimize your sales-training program. Have you allocated funds to improve it? Being open for business is no longer enough. You need to consider your plan to convert potential customers. Do you have a sales script or guide that outlines the sales process? If not, write one.
Have you trained your staff on how to show a unit to a potential customer as well as promote your property’s features, such as climate-controlled space? Does your facility have a golf cart so prospects aren’t forced to walk the property to see a unit?
Conduct a market study of your competitors to see if your amenities and gate hours are similar or better. Managers can use this information during their sales presentation. Find out what kind of pricing and specials your competitors are promoting online and for walk-ins. The sales process should also include the promotion of ancillary products and services such as locks, tenant insurance and packing supplies. If your business offers autopay and online-billpay capabilities, be sure staff mentions it to prospects.
Customer service is another item that should always be a central focus. You need to think of it as a process. It begins in the office, which should be clean and inviting. Does your office offend any of the five senses? With a critical eye, consider any changes that should be made. For example, if the office is dark, displays peeling paint or smells musty, these are things that can be easily remedied.
Next, think about how customers are greeted. Managers should always stand, smile and offer a handshake. Also, present a bottle of water or cup of coffee to everyone who comes through your door.
Since most customers use self-storage because of changes in their life, it’s critical to show empathy and understanding. Someone who’s robotic in nature—just going through the motions of the rental process—will seem insincere. Rather, call the person by name and make eye contact.
Dealing with irate customers takes special skill, so it’s vital to have policies and procedures in place to handle these situations. For example, what’s the protocol if a customer becomes unruly? What freedoms are put on staff to appease a customer who’s upset about a rental increase or late fee? It’s important employees know these policies so they can act accordingly.
A self-storage manager with great customer service can make up for many facility flaws. Never underestimate the importance of this skill. Customer service can help swing the success of a facility one way or the other.
An increasingly competitive market means it’s time to install a tracking system. To do this effectively, you must dig deep and invest. You can’t leverage this technology by entering halfway or acting with passive interest. Information is great, but the ability to process it is the real difference-maker.
Self-storage operators too often make decisions with no information, partial information or just a gut feeling. For example, if you launch a direct-mail campaign, how do you know if it’s successful? Do you know how many potential customers are generated? Do you know how many of those leads are converted to rentals? Answers to both can lead to different conclusions.
If a direct-mail campaign doesn’t generate any leads, then maybe the design or mailing list was wrong. If it enticed potential customers but those prospects weren’t converted, your sales process may need to be adjusted. In addition, lead tracking allows you to calculate a return on investment for each marketing campaign. It also reveals holes in your training program and documents staff performance in real time.
The first thing college basketball coach John Wooden used to teach his players was how to put on their socks and shoes—not how to dribble, shoot the ball or rebound, but the importance of socks and shoes. Without these, his players risked major injury. Your facility should operate in the same way. It’s the simple, everyday things that will keep it successful. As operators, we must either get back to self-storage fundamentals, or the fundamentals will come back for us.
Matthew Van Horn is co-founder of 3 Mile Domination Self Storage Services, a full-service operations company specializing in self-storage management, marketing and consulting. He’s also co-author of “Self Storage Domination.” To speak with him about your self-storage operations, schedule a free 60-minute strategy session at www.3miledomination.com.