Editor’s Note: This article contains material published in the book, How to Make Money in Self-Storage, by RK Kliebenstein and Jennifer LeClaire.
This may be the most challenging time ever in our industry. The self-storage business has been a blessing for many owners, operators, vendors and managers, as well as customers. Now, we face obstacles we have never encountered before. Some in the industry will rise to the occasion, while others will fail as a result of an unwillingness to recognize change and embrace the dynamic nature of our industry.
You may remember an old cigarette commercial that targeted women during the women’s movement with the tagline: “You’ve come a long way, baby.” About the time this advertising campaign was popular, the self-storage industry was in its early days of inception, and was often characterized by rows of metal buildings with paneled doors, chain-link fences and unpaved driveways with little or no security. Many of you will agree that we, indeed, have come a long way.
In terms of just the physical construction aspects of the industry, self-storage has changed dramatically. We have gravitated toward high-traffic locations that emulate retail sales areas. Self-storage has grown from metal garages to multi-story buildings with millions of dollars invested, where convenience and state-of-the-art security are primary selling points.
Unfortunately, what hasn’t changed much are the ways in which we operate self-storage stores. Many operators are still thinking Tyrannosaurus Rex, when the industry is now developing robot-operated, manager-less self-storage operations. While I am not advocating firing our managers and replacing them with robots, there is a great deal of sense in changing the way in which we conduct business.
I am amazed at the number of self-storage owners and operators, particularly those in more suburban and rural stores, who still think this business should be run the same way it was in 1970. It is important for us to change and revolutionize the manner in which we consider retail space an integral part of self-storage operations. As we develop sophisticated retail locations, we must now find ways to maximize the utility of that square footage and, in fact, we should measure our sales per square foot generated.
Much like any other retail-driven operation, self-storage managers must be trained to up-sell and cross-sell. We must begin with a paradigm shift and use consultative selling techniques to match the best possible product for our customer with the inventory we have onsite.
In addition to renting self-storage space, we need to learn how to sell moving and storage supplies, such as locks, boxes and tape. There are additional retail sales opportunities all around us. We must recognize this is a competitive environment, and to compete we must think as they do about scalability, salability and availability. Expensive retail locations dictate that we find additional revenue sources such as pack and ship, records storage, local and cross-country moving, online auctions and mobile storage.
We must learn that strategic alliances, revenue-sharing and brokering can be profit-generating and can drive traffic to our stores, giving us an opportunity to prove that we have secure selling skills and can rent space to all those who enter our stores.
We must begin to look beyond the 5-by-10 and 10-by-10 spaces and recognize that, although it was our core source of income, we are no longer living in the ’70s. We must look for new retail opportunities that will generate the kind of traffic we so highly covet. To drive residential consumers to our front doors, we need to consider new product and service offerings, such as carpet shampooers and propane exchange tanks.
The Commercial Consumer
To attract the commercial user, perhaps the most desirable of all guests, we need to further understand their business needs. In the ’70s, we stored their old desks and computers, tattered and torn business record boxes, leftover inventory and last year’s store displays and merchandising fixtures. We must now think about integrating new services into our self-storage locations that will bring these valued customers through our doors.
What if self-storage operators positioned themselves in the market to securely store backup tapes from customers’ PCs? How about shredding documents, complete with certificates of destruction, or converting hard copy files and records to digital images that can be stored on virtual servers? There are a host of products and services—sold largely through the Internet—that require little time and energy on the part of our managers other than fostering client relationships and using a consultative sales approach to solve problems for business customers.
These programs can be offered with low capital investment by the self-storage operator, and will require little space for execution. A minimal amount of training will be required, but can also be found online.
Tomorrow’s Self-Storage Store
Someday, the self-storage store as we know it will be but a mere memory and a photograph in a museum. While there are some clever “themed” self-storage stores designed and decorated in retro fashion to attract attention, there will be even more stores constructed with glass storefronts; sliding-glass doors commonly found at most retailers; DIY rental and payment kiosks; touch-screen monitors for updating addresses and communicating customer comments and requirements; and a host of other conveniences that will continue to move our industry forward. Biometrics, retinal scanners, bar-coding and digitizing our business will become commonplace.
I have had the privilege and pleasure of working with developers of computer-controlled cranes, robots and software for automated self-storage, where technology is expected, not an afterthought. These stores, made available through an increasing number of developers, will have unique features that make operations more efficient and provide a “wow” factor for tenants. The cost of these mechanisms will be reduced as they become more commonplace and as developers find efficiencies in design and construction techniques.
The inconvenience of elevators and long hallways to access climate-controlled space will be replaced by drive-up climate-controlled storage. This business model will be easily integrated into mobile storage, and markets limited by small, convenient geographic areas will be expanded into citywide, even countywide, tenant-acquisition opportunities. Advertising and marketing efficiencies will be gained as prospective customers are located farther and farther away from our locations.
Are you ready for the future?
RK Kliebenstein is owner of Coast-to-Coast Storage and the co-author of several books including How to Invest in Self-Storage and How to Make Money in Self-Storage. A sought-after speaker and educator, he welcomes your comments and ideas. To reach him, call 561.963.4004, ext. 81; e-mail email@example.com.