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Debating Dishonesty: A Self-Storage Manager's Perspective

Last Thursday evening, I received an e-newsletter from Self Storage 101 that, quite honestly, got my blood boiling a bit. The focus of the e-newsletter was theft by managers in the self-storage industry. It was titled, “Just in Time for the Holidays! How to Steal.”

Granted this industry vendor does feasibility studies and audits, but consider this: owners alone are not the recipients of their e-mail blasts. I am a well-treated manager, and I treat the property as if it was my personal investment. It is, after all, up to me to run things correctly and make sure our the owners’ property is safe, and never puts us them in the position of being sued for any reason.  

This subject, in my opinion, is so tired and, honestly, a bit of a sore spot with me. It’s fear-based marketing, and not necessarily the best tactic to take, but I’m sure it’s highly effective to the right audience.

Over the years I have witnessed the thief-type managers land position after position after losing a job because the owner didn’t take the time or effort to build a case and prosecute. He even might give a job reference. “Oh yes, they worked for me from X date to X date. They went above and beyond what I expected. Uh, they wanted to relocate and things didn’t work out as they planned, that’s why they’re looking for work now. Too bad I already hired replacements.”

The owner may have been too embarrassed to prosecute, therefore, the thieves were free to seek employment elsewhere and do the same to the next unsuspecting owner.

Any honest manager out there will tell you, sure, they’ve been approached about taking cash for a discount or cash to allow people to live in units. I have responded to the few “under the table” requests by turning the tables and asking, “Do you really think $100 cash for a couple of months instead of you paying $245 a month is worth me risking my job? You’ve got to be kidding!”

The games played are as various as there are people in the world. But I have to ask, is any small amount of money worth risking a job or personal reputation over? Not to mention prosecution. The majority of managers in our industry would answer with a loud resounding “NO!” But because of a few bad apples, the myth that all managers are thieves continues to run rampant in our industry.

We all need to stop and ask ourselves what would prompt someone to resort to stealing? Could it be the poor management team living in a condemned single-wide mobile home on site with boards for windows and no heat who bust their buns for a $7 per hour, combined salary? Yes, it happened. I personally witnessed it, a sweet, older couple being completely taken advantage of. But here’s the clincher, they didn't steal. Instead they networked and found someone who appreciated their value and hired them away. I could easily give you a half dozen more examples of mistreatment if not for space restrictions.

Owners: In your area, even though housing and utilities may come with the job, ask yourselves this question, "Am I paying enough for my staff to pay their auto insurance and gas, medical costs and groceries?" Take a look at your own personal financial spreadsheet and ask if you could make ends meet in your area on what you pay if you forced to downsize your own budget and walk in your manager’s shoes. If the honest answer is no, then maybe it's time to rethink your pay scale, and realize you’re asking these people to manage and protect a multi-million dollar investment on your behalf.

Do you pay a “bonus” for so many rentals in a month? If so, then aren’t you setting yourself up for someone to “cook the books” and hold off processing vacates until the next month to meet the bonus level?

Responding to the suggestion that managers are cutting locks for auction and cherry-picking high-value items to resale for personal gain, my question to self-storage owners would be, “Why are you not using a professional auction service to alleviate this potential type of theft?” A professional auctioneer’s percentage is a small price to pay for the level of distance between you, the buyers and the lien party’s goods.

Obviously, there are bad apples in every industry and we need look no further than the headlines of the last year for validation. However, when it comes to theft, there are two sides and two responsible parties, and it’s up to all of us to self-police our industry.

I’m sure my opinion will garner reaction from both sides of the debate. I encourage you to log into the industry’s leading forum, SelfStorageTalk.com, and let’s debate it. We can all learn from each other, and together we can come up with solutions to prevent other owners from falling prey to the same situation.

I mean no disrespect to the author of the e-newsletter. He’s promoting his services and it worked. He got press out of his missive, and maybe some owners out there should hire him ASAP... for all of our sakes. 

Thieves Steal $3,400 in Goods From Georgia Self-Storage Unit

Thieves stole more than $3,400 worth of property from a unit at Athens Self Storage in Athens, Ga., earlier this week. Items taken included a TV, cue sticks, a computer, leather chair, washing machine and clothes dryer.

The theft occurred between midnight Thursday and 6:30 p.m. Monday, according to Athens-Clarke police. It was discovered Monday when the woman who rented the unit found the padlock had been cut.

Source:  Athens-Banner Herald,  Thieves Break Into Athens Storage Unit

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Updating Your Self-Storage Marketing Program for Modern Times

Self-storage operators must rely on advertising and marketing to get their potential customers. In the past, the marketing strategy for the industry consisted of a sign, a listing in the Yellow Pages and a friendly (yet often lonely) manager behind the desk. This strategy worked fine for a long time. In fact, there’s an entire industry to prove that it worked just fine until bam! It all changed.

These days, we’re faced with a new, dynamic marketing paradigm in which tools such as Google, Facebook, craigslist, Twitter, etc., reign supreme. The great newspapers and magazines that served the advertising needs of American business in the past are all but gone. Even the U.S. Post Office is losing revenue because advertisers are finding better ways than direct mail to promote their products. Yellow Page directories are more often used as door stops now. And if you don’t have a website, you’re considered a dinosaur by anyone under 40.

Many large storage operators have sophisticated, revenue-management systems that help them price their rates on a day-to-day basis and collect data on every customer’s rental behavior, including length of stay. Additionally, these systems test various incremental increases in rent that relate to customer demographic. As their databases get older and bigger, their predictions on all the variables get more precise. This provides them with invaluable marketing information.

Getting Up to Speed

Updating your marketing methods may seem overwhelming but, in fact, it’s relatively simple to do and not nearly as expensive as you might think, especially when you compare the costs to your Yellow Pages bill.

To start the process, you need a crisp, clean and simple website. A complicated one with too much information is a detriment. The page should include your facility’s address, phone number, e-mail address, location map, the name of your local area, and a few pictures. Your rates (by unit size), and hours of access are also important. Briefly list your other amenities: security, retail product, promotions, etc. Lots of “white space” is a good thing—you don’t want viewers to get confused.

If you don’t already have someone to work on your website, post an ad for a Web designer on craigslist. You’ll likely get calls from a lot of young, hungry folks who can quickly create a Web page at a reasonable price. Interview two or three developers, and choose one who understands the needs of your business and can build a site that functions smoothly. To get an idea of what’s out there, take a look at other websites. But keep yours simple!

If you do want a fun gimmick, however, one that is easy to create and use, add a 45-second video of the facility owner or manager personally welcoming the visitor. Your Web developer can do this, and it adds a warm, personal touch that will make your page more distinctive.

You can also list your facility on craigslist for free, renewing the ad every week. Surprisingly, this method has had great success for some operators.

You may already know that search engines such as Google and Yahoo! rank websites based on quality, traffic, volume and links to other sites, as well as a raft of other obscure criteria. Thus, it’s smart to list your property on two or three of the portal sites that specialize in helping consumers self-storage. While each site has a different approach, they all get a lot of traffic and have high-ranking positions on the various search engines. These sites improve your chances of getting a response from potential renters. They’re also inexpensive relative to other advertising methods, and the additional rentals you’ll secure will more than pay for the costs of listing on them.

Self-storage is a local business in the sense that your website and marketing area is relatively small. It’s important that your marketing and Web efforts focus on the region in which you actually do business, most often a five-mile radius around your facility. Again, this is where the self-storage portal sites can be helpful because they often restrict searches to the geographic criteria of the renter. 

A Little ‘Home Cooking’

While electronic marketing is critical today, there are other effective marketing mediums that require less technology. After several years of operation, for example, many operators report the majority of their new customers are actually repeats. So it’s important to keep in touch with past tenants on a regular basis—at least every six months, or better, every quarter. A picture postcard of the facility with a handwritten note is an effective reminder to the customer that Grandma’s junk is still in the garage and winter is coming. The note need say nothing more than, “We miss you! Come back, and the first month is always free for our favorite customers. Thank you, Bob.”

Start collecting e-mail addresses from all your renters. These will be immensely valuable as your online marketing increases. E-mails will be useful for communicating general messages, such as notifying renters the facility is closed due to a holiday or weather. These e-mails not only provide information, they let the renter know you’re professional.

Similarly, you can send an e-mail to current customers to offer a referral credit if they know of a prospect. Simple contacts with customers are effective, building relationships and customer confidence.

Using these “new-fangled” strategies doesn’t mean you should abandon your marketing efforts. Those older methods will generate leads as well. Just make sure to carefully track where leads come from, and then adjust your budget to reflect the most cost-effective type of advertising.

The future of marketing is not written on the wall but on the Web. The times have changed in the marketing world, and it’s important that you and your business change with them. As singer Bob Dylan warned, “You better start swimmin’ or you’ll sink like a stone.” 

Michael L. McCune is the president of the Argus Self Storage Sales Network, a national network of real estate brokers who specialize in self-storage. Argus provides brokerage, consulting and marketing services to self-storage buyers and sellers and operates SelfStorage.com, a marketing medium and information resource for facility owners. For more information, call 800.55.STORE.

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SpaceOut Conducts Survey of Australia Self-Storage Prices, Reveals Results

The results of a nationwide survey of self-storage unit prices in Australia has been released by Brisbane, Queensland-based SpaceOut, a local service that connects people who need personal or business storage space with those who have space available in their homes or offices. The data reveals vast price variations within the Australian self-storage industry, not only between urban and rural areas, but even within capital and suburban cities. It also shows discrepancies between prices at independently owned and chain self-storage facilities.
 
More than 700 Australian self-storage operators were asked to provide prices for some of their most popular unit sizes as well as outdoor parking spaces for boats and cars. The highest rental rates were found in Sydney, where a customer might pay more than $800 a month for a standard garage-size space. The next expensive locations are Melbourne and Brisbane respectively.
 
The survey also revealed a significant price discrepancy between urban and rural storage prices, with rural storage units costing anywhere from 40 percent to 70 percent of the cost of their urban counterparts. The least expensive places to store, according to survey results, are Tasmania, and rural regions of South Australia, Victoria and Western Australia.
 
The data also shows that independently owned self-storage facilities tend to be priced approximately 25 percent lower than facility chains. For example, the national average rent for a 3-by-7 meter storage unit is $273 per month at independently owned facilities and $389 per month at chain facilities.
 
This survey was commissioned by SpaceOut to its members in setting private storage prices. A summary of the survey, including a state-by-state breakdown of results, can be found at www.spaceout.com.au.

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Hawaii Self Storage Gives Away Halloween Treats, Helps Foodbank

From Oct. 23 through Oct. 31, all five Hawaii Self Storage facilities are giving away free plastic pumpkins filled with treats to every family that donates a grocery bag full of food for the Hawaii Foodbank. Donations can be made at any HSS facility from 8 a.m. to 6 p.m. Pumpkins will be distributed while supplies last.
 
HSS is Hawaii’s largest self-storage company, with facilities in Kaimuki, Kapolei, Mililani, Pearl City and Salt Lake. The company offers an extensive menu of amenities for residential and business customers and participates in numerous programs to give back to the Oahu community.
 
Source: Honolulu Advertiser, Free Halloween Jack-O-Lanterns at all Hawaii Self Storage Locations

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ISS Blog

Debating Dishonesty: Managers' Reputation vs. Owners' Need to Be Informed

Last week, industry consulting firm Self Storage 101 sent out a tongue-in-cheek newsletter highlighting the myriad scams self-storage managers can use to “rip off” their facility owners. It’s creating an interesting stir in the management community and is great fodder for debate. Let’s consider both sides of the equation.
 
First, a bit of background. I don’t know the specifics of the newsletter’s recipient list, but based on the company’s customer base, I’m guessing it’s comprised largely of facility owners. Self Storage 101 specializes in facility audits, market studies, due diligence and operational improvements. Owners Bob Copper and Bob Vamvas (I call them “The Bobs”) work with owners on sales skills, collection techniques and other essentials.
 
That said, it’s clear the letter went out to at least a few managers, because I got an e-mail from one who was less than pleased by the delivered message, claiming it perpetuates a negative image of facility managers and implies many are capable of wrongdoing.
 
The title of the newsletter was “Just in Time for the Holidays! How to Steal,” and went on to outline seven methods that can be or have been used by managers to take money out of an owner’s pocket. I was a bit shocked to see this information dispersed so openly. If there actually were any bad seeds on the mailing list, they just got a nice packet of scam ideas delivered to them on a silver platter. I won’t repeat them here, but some were fairly clever.
 
Even if we assume it was never intended for managers to see this newsletter, we know at least some owners use their generic facility e-mail address for communication, which means the manager is often the one who filters these messages. In larger operations, each person likely has a unique address; but smaller operations may funnel everything into an “[email protected]” kind of addy.
 
Getting back to the debate on the table: On one hand, you have the facility owner, who should be forewarned and aware that this type of dishonest behavior could be occurring at has his or her facility. From this perspective, Self Storage 101 was providing a valuable service, merely pointing out situations The Bobs have likely witnessed directly while auditing facilities. On the other hand, this industry has a robust management community that has undergone dramatic changes over the past decade. It’s bad enough to battle negative images of self-storage facilities and managers perpetuated by the public media; now managers have to battle suspicion from their own owners, created from within our own ranks.
 
While at the recent ISS Expo in Washington, D.C., I sat in on a seminar about self-storage insurance. While discussing employee-dishonesty coverage, the presenter shared a story about a manager who had worked with an owner for decades. She had been given “the keys to the kingdom,” allowed to manage the books. In the end, it turned out she had been embezzling money from the owner for many years. He never suspected it. Is he partly at fault for not being more vigilant? Sure. Is it sad that any owner should have to be wary of his own employees? Sure. Is it true there are corrupt people in the world, and some of them will work at storage facilities? Yes again.
 
Let me know your thoughts: Is it true that to be forewarned is to be forearmed, and it is a consulting firm’s duty to advise facility owners of the potential danger of manager scams? Or should that kind of information be kept on lockdown to avoid unnecessary suspicion and criminalization of manager activity?
 
You’ll read more about this topic later in the week when we get a manager’s perspective here in the blog. I invite any industry consultants or owners to submit their opinions or comment in response.

Vacant K-Mart Owners Fight for Self-Storage in PA

The owners of a vacant K-Mart store in Lower Providence, Pa., want to convert it into a climate-controlled self-storage facility, but it will require an amendment to the existing zoning ordinance. On Thursday, Geoffrey Glazer, vice president of acquisitions and development for Kimco Realty, asked the Board of Supervisors to schedule a public hearing to discuss the amendment. The board unanimously agreed to advertise and schedule the hearing.
 
Lutherville, Md.-based Kimco Realty, which owns the shopping center, would like to use 70,000 square feet of the 102,000-square-foot building for self-storage, using the remainder for retail stores. The company is interviewing self-storage management companies to operate the site.
 
The Ridge Pike Business District was not originally intended to have self-storage, but the proposed ordinance change would allow it. Some on the Board of Supervisors are questioning whether this is the best use of the space. One asked if Kimco could plant landscaping to improve the site’s appearance.

Glazer said that because the storage facility would only need 10 to 20 parking spaces, the parking lot could be developed into a pad-site for a medical office building or a restaurant use.

Source: Norristown Times Herald, Wheels in motion

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Self-Storage Consulting Package

Art Marcone, a self-storage consultant and long-time business manager/consultant, has developed a business-consulting package for self-storage facilities.

The new approach is particularly effective in addressing the challenges of diminished active demand for self-storage units and the reduced number of casual self-storage users during this soft economy, according to Marcone.

It’s essential to success in today's economy for self-storage business owners to refocus their energies and place them more fully on sales, marketing and customer service, says Marcone, who is now taking on a limited number of full-service management accounts in the southeast United States, and has begun consulting on operations and sales coaching.

Marcone has 15 years in the self-storage management arena and more than 20 years in domestic and international marketing management and consulting at IBM.

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Richmond Brothers Offer Self-Storage and Incubator Offices

Brothers David and Tom Kern of Richmond, Va., have renovated a 60-year-old, 77,000-square-foot building on Chamberlayne Avenue into 500-unit self-storage facility that also offers incubator office space. AAAA Chamberlayne Storage, which opened two weeks ago, includes a business center with computers, gourmet coffee, a conference room and Wi-Fi. The facility also features piped-in music, carpeted hallways, and five covered loading docks.
 
An office, including optional storage space for merchandise, runs about $400 per month. If the concept works, the Kern brothers plan to add more offices and storage units.

Source: Richmond Times Dispatch, BIZ BUZZ: Brothers combine office and storage spaces

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ANAV Holdings and NFL PA to Build Self-Storage in Tacoma, Wash.

ANAV Holdings Corp., a subsidiary of World Assurance Group, has signed a letter of intent with NFL PA LLC to purchase a 45 percent membership interest in a self-storage facility to be built in Tacoma, Wash. The project has all entitlements in place, and construction may begin within 120 days of closing. When complete, the multi-story facility will contain 879 climate-controlled units.
 
According to Jonathan B. Morgan, president of World Assurance Group, the decision to sign the letter of intent was based on the location of the property, which is close to universities and military installations.
 
Through ANAV, World Assurance Group intends to participate in all areas of real estate transactions, including direct ownership, co-investment with other institutions or developers, and indirect participation through the acquisition of distressed debt or non-performing loans, with the eventual goal of control of the underlying assets.
 
NFL PA was created to serve the self-storage industry. Formed by an ex-NFL player―hence the name―it is being managed by a member of Sustainable Green Inc.

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