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October 1, 2002

4 Min Read
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Dear Boss,
I would like to make some recommendations regarding additional services for our customers and how they might impact our bottom line. Although our original intent was to provide upscale facilities where all these services would be included, we have not been able to justify this through higher standard pricing. At no charge, these services provide no competitive edge in attracting new tenants, as the majority of our customers do not anticipate the need for them or see their advantage.

On the other hand, there would be no negative impact on the sentiments of our existing customers if we were to charge for offering additional services. The majority are willing and expect to pay a nominal fee for them, and providing them would create a positive impression of our facility. Although the fees are minimal, the overall economic impact could be substantial.

As I shopped our competition to get a feel for the services they offer, it quickly became apparent they are not treating small, additional services as amenities, which are expected and included in the standard rental rate. For example, all of our competitors have a fenced-in lot and computer-controlled gate access, but 24-hour access through the gate is not offered as a standard. A charge applies for anyone who would like this feature on a regular basis. I have seen this fee as high as $30.

I realize we advertise 24-hour access and view this as a competitive advantage; but I think we can charge a nominal fee ($10 to $20 per month) for individuals or commercial customers who need this feature regularly. To satisfy those who argue we offer 24-hour access in our ads, our system allows a manager to offer this feature free of charge for a finite period of time to anyone who requests it. Therefore, the only customers charged would be those who are aware of, and willing to pay for, the option of permanent 24-hour access.

Many of the services we offer for free on an as-needed basis can have a nominal charge attached to them. For example, cutting a lock can require a $5 to $15 charge depending on the type of lock and whether it must be cut or drilled. After all, we incur the cost of labor plus eventual replacement of the tools, whether it is new jaws for the bolt cutters or new drill bits. We should be able to recover these costs from customers without alienating them.

We currently do monthly billing for a select number of customers who must be billed for us to get paid. If a customer would like to receive a bill on a monthly, quarterly, semi-annual or yearly basis, there should be a charge of $2 or $3 to cover the cost of materials, postage and labor.

It is not often customers leave our units in broom-swept condition upon vacating. Since we do not require a security deposit, this could be a service we offer at the time of vacating. They can simply pay the $5 cleaning charge and leave our facility in perfect compliance with the rental agreement--and with a clean conscience. This particular service would be an easy sell, and we would then get paid for something we are currently doing for free.

Many customers have asked to use the external electrical outlets on an occasional basis, and although we frown on this as a policy, exceptions have been made for temporary use. This would be another prime candidate for a nominal fee, and could easily be controlled through sound policy-making and follow-through (as well as locking the electrical outlets when not in use).

I also would like to explore the possibility of creating new services, such as water use for our RV customers, whether it be for potable purposes, rinsing dirty objects from a trip or even washing their vehicles. For car-storage customers, we should have jumper packs on hand to be used for dead batteries. We should also have an air tank or small compressor for these same customers. We could look into providing a battery-charging service as someone in our company has previously suggested.

Taken individually, these items may seem insignificant in terms of scope and revenue-generation. However, by implementing and using these many services in our day-to-day operations and promoting them through ongoing sales techniques, they can add to the bottom line and give us a long-term competitive advantage over competitors.

Your Manager

David and Tina Fleming are an award-winning management team with Premier Self Storage Inc. of Western New York. David has more than 10 years of experience in the self-storage industry, having managed facilities in three states. He is currently a corporate trainer and senior site manager overseeing five locations. He and Tina work as full-time resident managers of Premier Self Storage in Amherst, N.Y. To contact the Flemings, call 716.688.8000; fax 716.688.6459; e-mail [email protected].

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