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The History and Value of Self-Storage Call Centers

Decades ago, the self-storage real estate investment trusts started using call centers to gain higher occupancy and better maintain a competitive advantage over smaller industry operators. Today thousands of independent facilities are using third-party call centers to capture more business.

September 2, 2016

6 Min Read
The History and Value of Self-Storage Call Centers

By Michael Sawyer

For most independent self-storage owners, new customer rentals are handled manually by facility managers during office hours. Their process to drive new tenant revenue is dependable and straightforward. Typically, the strategy only requires one manager to cover all the bases (telephone calls, website inquiries and foot traffic).

When new customers reach out by phone, managers are trained to drive them to the facility for an appointment and tour. When prospects visit the company website, strategically designed pages advise them to call the manager for unit pricing and availability. Regardless of where the communication originates, managers stay consistent with the strategy to drive appointments. In the end, all new customers are funneled to the property and manager.

This long-established strategy requires a face-to-face appointment to begin the rental process, assign a unit and execute the lease signing, and its effectiveness has been proven. On average, U.S. storage managers are converting 80 percent of their appointments to new tenants. But while this might sound like a positive statistic, there’s still more to measure before we consider a conversion process to be successful, according to Brad North, president of Advantage Consulting & Management, which specializes in sales, marketing and operational training to the self-storage industry.

“We have to first take into account how many sales calls were taken during any given time,” North says. “Then we would like to compare that number with how many appointments actually showed up. To gain deeper insight, we would want to measure a manager’s appointment-conversion rate as well. When it comes to statistics, knowing how to measure and interpret results is as important as knowing what to measure.

“There are also many little leaks that will constantly drain your profit. Due to a number of logical reasons, managers are only able to answer a fraction of your incoming calls. For storage operators who do the math, there is also a logical reason for concern,” North adds.

There's a profit leak in most storage businesses. In some, the leak is more like a hole that’s overlooked. Owners can analyze costs and profit and examine all the operational line items; still, most miss the leak. Meanwhile, profit is lost every single day.

Origin of the Call Center

Industry-wide, self-storage managers are missing 60 percent of the calls that roll into their facility. If they route calls to voicemail when showing units, maintaining the property or going to the bank, those calls could go unanswered for long stretches. The same is true if the facility only has one phone line or the store closes for any period of time. With so much at stake and little reason to gamble, operators are taking action to reduce missed opportunities.

The call-center concept was first implemented decades ago by the publicly owned self-storage giants—the real estate investment trust, or REITs—as a strategy to gain higher occupancy and better maintain a competitive advantage over smaller operators. The plan was devised to route all incoming calls to a centralized office. Over the years, the REITs’ investment in staffing and technology for these remote centers has become a vital business asset, one that only operators with several hundred locations could begin to justify (and afford). Yet the effect on profit margins has proven substantial.

By design, the REITs’ call-center agents represent the first line of communication for the business. They qualify leads, gather customer data, promote specials, and then drive appointments or reservations to the property. This allows the store managers to focus on operational duties, such as marketing, customer service, lead follow-up and closing sales.

Winning the Storage Wars

According to “The Self Storage Playbook,” a report published by Chilton Capital Management in October 2014, the REITs have a huge advantage over independent owners because of their call centers. This is because REITs have hundreds of agents behind the scenes to support store managers and ensure every call is answered. The report stated 45 percent of all sales leads, appointments and reservations are converted to rentals. On average, the typical storage property without a call center is only converting 25 percent of its sales calls, and 40 percent of facility calls go unanswered.

Today, thousands of independent self-storage owners have adopted the practice of using a third-party call center managed by an industry vendor. This trend blossomed during the last economic recession, and the solution has been proven to help owners better compete for rentals in their respective marketplaces.

The best call centers are equipped with state-of-the-art technology programmed to know everything about a facility (the location, its tenants, payments due, available units, pricing, policies and more). This technology allows the call-center agents to process rentals, reservations and payments in real-time, 24/7.

“It’s a big decision to let a third party get between you and your customers,” says Robert Chiti, president and CEO at OpenTech Alliance Inc., a Phoenix-based company that offers call-center services and other self-storage technology solutions. “While facility managers are always the best bet in servicing tenants or sealing the deal on rental calls, there’s still a big need for back-up. Custom call centers have been proven to make a significant impact on the financial performance of each and every self-storage operation.”

Call-Center Value

Call centers can be used to handle all incoming phone calls, allowing the manager to focus on operational duties, serving tenants, following leads and closing face-to-face appointments. They can also be used solely to accept phone calls that would otherwise be missed and rolled over to voicemail. In either case, a call center is a solution to ensure every call to the self-storage property is answered professionally, whether it comes when the manager is on another call, with tenant or away from the office, or after hours, when the office is closed.

A call center is the alternative to missing 40 percent of your calls. Being available when the phone rings and immediately ready to do business with a customer is how call centers have earned their merit. “There’s no on-off switch for today’s buyers. They don’t like to be on hold, and they don’t leave messages. Even a sympathetic promise by the manager to call the customer back shortly can be interpreted as a disappointment,” adds Chiti.

A cold civil war still brews between the self-storage REITs and independent storage owners. While rental-conversion rates are important, the real issue is, if you miss the call, the chance of converting it to a rental is zero. Call centers provide the back­up necessary to capture every in­coming call, a better solution to compete for business and the means necessary to drive more new tenants. Those facilities left to rely solely on their onsite managers to handle calls, reservations and new rentals during regular office hours will see less impact in their business—especially in terms of income.

Michael Sawyer is the director of marketing for Phoenix-based OpenTech Alliance Inc., which develops self-service rental solutions for the self-storage industry. Every day, the company connects thousands of customers with self-storage operators around the world. Its automated products and services helped facility managers move in more than 100,000 tenants and realize more than $100 million in new sales revenue in 2015. For more information, call 602.749.9370; visit www.opentechalliance.com.

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