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Thoughts From the Road 7220

June 1, 2000

5 Min Read
Thoughts From the Road

Thoughts From the Road

By Jim Chiswell

I had therecent honor of speaking at the very first conference of the Illinois Self StorageAssociation (ISSA), which is now just over a year old. The association is off to a goodstart, with 70 owners/operators and vendor members.

I want to congratulate Jack Murphy, Kevin Heiden and John MaanDeKok for their personalefforts, and the financial resources they have invested in launching the ISSA. Thisassociation's leadership, under President Murphy, has already taken a major step in thegroup's growth. Rather than depending on the work of volunteers, they stepped out in faithand retained a professional association manager, Michael Lane, to run the day-to-dayoperations. Michael's 20-plus years of association experience has already paid offsignificantly for all of the self-storage owners in Illinois.

The Illinois Association's goal is much like that of the Texas Mini Storage Association(TMSA) and the New York Self Storage Association (NYSSA). They not only providelegislative monitoring at the state level, but also provide a vehicle for owner andmanager communications, cooperation and learning. The establishment of state organizationsis a critical next step in the growing maturity of the self-storage industry.

The ISSA, with direct help from the TMSA, is already planning to publish its ownversion of the Texas Gold Book. For those of you not familiar with the TMSA GoldBook, it is, in my opinion, one of the finest resources that has ever been publishedfor self-storage operators. It contains up-to-date information on Civil Codes, Lien Lawsand other legal matters essential for all self-storage facility owners and managers to befamiliar with in the operations of their properties.

There are other state associations starting to evolve around the country. It is vitalfor the long-term health of our industry that these efforts succeed. If you are an ownerin a state with an established association or one just being developed, get behind themwith your membership dues check and a commitment of your time. I feel this is especiallytrue for the major national and regional companies that, in many cases, are standing onthe sidelines and not supporting these organizations. Yes, I have heard all of the reasonswhy people don't join. The bottom line is that we all owe something back to the industrywhere we make our living. If you don't have a state organization, get some industryfriends together and get one started.

There is one final opinion that I want to express about associations. I personallythink that the time has come for the national Self Storage Association's (SSA) Board ofDirectors to fully recognize the importance of state associations to our industry. I feelthat the national board needs to totally restructure the SSA. By dismantling theantiquated regional structure and creating a new governance board made up ofrepresentatives from each state association, we can take a giant step forward in improvingthe focus of national activities on the problems facing our business. I am convinced thata new direction for the national SSA is in everyone's best interest.

I have posted on my website (www.jimdot.com) the state associations that I have beenable to identify, including their address, the name of a contact person and their URL(when available). If you are part of a new association that is not listed there, pleasedrop me a note or e-mail, and I will add you to the list immediately.

How Much Does the Telephone Really Cost?

When I ask most owners and managers that question, I am given the per-month cost of thephone bill. In a few cases, I am asked, "Does that include my Yellow Pagescosts?" The point I am making is that the cost of the telephone is really everydollar that you spend on marketing your facility.

Almost every marketing dollar spent is designed to get the phone to ring. What happensfrom that point is the subject of an entire day's seminar. I would like to challenge youto take a few minutes and fill in the blanks for your own facility. The following is anexample for you to follow:

  • Total Marketing Dollars = $18,000

  • Total annual calls = 480

Only count your prospective customer calls, not calls from existing customers. Takeyour total marketing dollars, and divide them by the total of annual calls. In thisexample, the cost per call is $37.50. That sounds like a lot of money to me.

Now take it one step further with this calculation:

  • Total new rentals last year = 175 units

  • Average length of stay = 8 months

The average rental rate per month is $100. Multiply the average length of stay by theaverage rental rate per month. The average rental customer who stays an average of eightmonths brings in $800. If you rented 175 units, total sales would equal $140,000.

Now take total annual telephone calls (480) and divide that number into the figure fortotal sales ($140,000). You discover that each telephone call is worth $291.67. It doesn'tmatter if the person on the other end of the line ended up renting.

If you run these numbers for your facility, you might be surprised at just how mucheach phone call costs you, as well as what each call is worth over the course of the year.So, managers, every time you answer a phone call from a prospective customer, you willrealize how important it is to give that caller your undivided attention and best saleseffort. And, owners, it really is important that you provide your managers witheducational opportunities to improve their telephone/sales techniques.

The more you understand the internal operations of your facility, and what thingsreally cost, the more effective you will become as a manager and an owner. I would be veryinterested in the results that you obtain for your facility. Send me an e-mail or drop mea note. If I receive sufficient participation, I will publish the results in an upcomingarticle.

Jim Chiswell is the president of Chiswell & Associates of Williamsville, N.Y.Since 1990, his firm has provided feasibility studies, acquisition due diligence andcustomized manager training for the self-storage industry. In addition to contributingregularly to Inside Self-Storage, Mr. Chiswell is a frequent speaker at InsideSelf-Storage Expos. He can be reached via e-mail at [email protected]; phone (716) 634-2428; www.jimdot.com.

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