I Hate Making Collections Calls! Self-Storage Managers Learn to Be Good at Rent Collection, Even When They Don't Like It

Few self-storage managers actually like making collection calls. Luckily, the skills necessary to be a great self-storage manager with highly effective collection abilities can be learned using proven techniques and systems.

Bob Copper

September 28, 2010

7 Min Read
I Hate Making Collections Calls! Self-Storage Managers Learn to Be Good at Rent Collection, Even When They Don't Like It

Who doesnt hate making collection calls? Lets face it, calling people about paying their storage bill just isnt fun. We would rather clean out vacant spaces or straighten the filing system than sit down with that collections worksheet and make those calls.

But we have to do it. As self-storage managers, we have two primary responsibilities and two clear priorities: renting space and collecting rent. If we dont effectively collect payments, it really doesnt matter how many spaces we rent.

Unfortunately, the ability to effectively work on and control collections is rarely a natural gift. Some of us are natural salespeople, and some are natural managers with great organizational skills. I dont know that Ive ever met anyone I could point to and say, That guy (or lady) was born to collect money! None of us wants someone to call us about a past-due bill, and we certainly dont like calling others about theirs.

Luckily, the skills necessary to be a great self-storage manager with highly effective collections abilities can be learned using proven techniques and systems. You might never learn to love making collections callsat least, lets hope notbut you can learn to be good at it.  

Why Its Important

The first step in becoming a great collector is to understand how important revenue is to the financial viability of your facility. Your owner has a great deal of capital at riskand most likely a very close relationship with a bank. He expects a certain amount of return for that risk. You have a job because someone was willing to go through a laborious financial and developmental process to build the self-storage site; so its important that you, as the facility manager, take your responsibility to maximize revenue seriously.

Think about it this way: What if you owned the facility? Would it be OK to avoid collections calls? Would it be all right to waive late fees and allow past-due tenants to move out without paying their balance? Would you be content to collect only 85 percent of the facilitys potential income each month? Probably not.

Collections Know-How

Once you have a clear understanding of why its critically important to do a great job with collections, you need to know how to do it well. A great collections effort starts with a great system. And a great system starts with the initial customer contact and the sales process. How you initially interact with your tenants has a great deal to do with your long-term business relationship with them.

Your first contact must include a professional greeting during which you stand up when the tenant enters your office, ask his name, and show genuine concern about his need for storage. Self-storage customers have many options, so you must show appreciation for their consideration. An initial show of respect goes a long way toward setting the tone of the relationship with a person.

Once a customer decides to become a tenant, its important to get the relationship off to a good start. This begins with the tenant-information sheet, a document containing all the information youll likely need in case the tenant becomes past-due. When completing the sheet:  

  • Get as much information as possible, even if you need to pointedly ask or the tenant needs to get back to you.

  • Get as many phone numbers and other contact information as you can, including an e-mail address and cell-phone number.

  • Never ask for an alternate contact. Everyone knows that means someone I can bother if you dont pay your bill. Instead, ask for an emergency contact.

  • Never ask for numbers of relatives or friends. Instead, make a big deal about your great referral program and get as many names and numbers as possible. People will give you more information if they think somethings in it for them than if they suspect youre looking for people to hassle.

  • You must see and make a copy of the tenants picture ID.   

Keep in mind that youll never have a better time than at leaseup to get as much information as possible. Once the tenant becomes a delinquency problem, youre not getting any new info.

The next step in a great collections process is clearly explaining the rental lease. This important document deserves more than a cursory glance and Sign here. This just says well sell your stuff if you dont pay. The customer must understand the late-fee schedule and lien process, and know when his next payment is due. Its imperative you take the time to effectively review the lease.

Also, quit using the term grace period. If rent is due on the first of the month, the tenant should be considered late on the second, and he needs to understand that.   

Time and Day

At some point, despite your best sales presentation and lease review, some of your tenants are going to become past-due. Assuming you have a collections system, it should kick into gear now. Your ability to maximize facility revenue will depend on it.

The first step is to plan the event. Set aside time to make your calls, whether daily or weekly, depending on your workload. Make sure you have as much information available as possible. Set a manageable goal for the number of calls to make based on the time available. Focus on those collections calls, and try not to multi-task.

Then decide when to call. Collection calls should be started the day a customer becomes past-due. Tenants should understand that on the day they signed the lease, they created an expectation that they would pay rent on time, and you intend to hold them to it.

Effective calls can be made morning, noon and night, and times should be staggered from day to day. For example, you may schedule calls on Monday at 2 p.m. for two hours, and Tuesday at 10 a.m. Change the schedule the following week. If you keep calling John Smith about his account at 10 a.m. every day and he never answers the phone, its probably because he isnt home at 10 a.m. Try another time.

You must also decide whom to call. Starting with the As and calling through the alphabet rarely works because Zombrowski will never get a call. Starting with the really late tenants and calling by past-due date rarely works because the not-so-lates wont get a call until theyre really late. Every facility is different, but you might start calling a particular building or floor on one day, another on the next. Whatever your system, its important to ensure every past-due tenant gets called, and regularly.

Theres one particular tenant who must be called every day, and thats the one who lied to you about paying yesterday. When you fail to call tenants who made commitments to pay the day before, youre letting them know its OK to lie to you. Broken commitments must be addressed immediately after the promise is broken.  

Making the Call

Once you start making calls, consider these important points:

Communicate with confidence. Sit up straight and dont multi-task.

Never lose your cool. Dont take tenants refusal to make their payments on time as a personal slight.

Take good notes. Document names, dates and times regarding commitments to pay.

Have access to the tenant-information sheet, not just the past-due list. Theres a great deal of info on that sheet you should be using to make effective calls.

Be careful when leaving messages. Never leave an account-specific message with anyone but the tenant or on an answering machine. Right-to-privacy issues still come into play with self-storage collections calls.

Increase intensity. The intensity of calls ranges from Hey, just wanted to remind you about your payment due yesterday to Your goods are scheduled to be sold at auction Friday morning at 10 a.m. The point of collection calls is to get the tenant to make his payment while retaining him as a customer. Use tact and understanding while clearly communicating your concern.

Effective collections are more science than art. Having a clear and consistent collections effort means increasing revenue and decreasing stress levels. Create and use your system with the stick-to-it finesse that defines a self-storage professional.

Bob Copper is the owner of Self-Storage 101, a full-service consulting firm specializing in training, market and feasibility studies, and helping owners and managers reach higher and more profitable levels of operational effectiveness. To reach him, call 866.269.1311; e-mail [email protected]; visit www.selfstorage101.com

Subscribe to Our Weekly Newsletter
ISS is the most comprehensive source for self-storage news, feature stories, videos and more.

You May Also Like