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Articles from 2001 In July

Inside Self-Storage 09/2001: The Fast-Start Educational Client Symposium

The Fast-Start Educational Client Symposium

By Cary McGovern

This article focuses on the fast-start educational client symposium, which has proven to be a significant generator of new records-management business. Since the records-management sales cycle is long--six months or longer--a catalyst is recommended to get new business to move through it quickly. The client symposium has consistently worked well as a "pump-primer." When well-planned and diligently managed, it can be the most valuable start-up tool for a newly formed commercial records business. It can also act as a renewed marketing push for an established business. If you are already in the business of records management and want to spur new growth quickly, the symposium is something you should consider.

What Is It?

For many years, companies such as Xerox, IBM and other market leaders in the administrative outsourcing and management field have offered educational events valuable to their clients or prospects. These can be a very valuable to you, the vendor, as well. These events are well-planned, strategic marketing tools and generally have two principal goals: to educate the client or prospect, and move new prospects quickly through a lengthy sales cycle.

The event is usually a three-hour format presented either in the morning or afternoon. Some of my clients request both morning and afternoon sessions during the same day or next day in order to provide an attendance option for the participants. These symposiums are usually at a hotel, conference center, chamber of commerce meeting facility, or any place conducive to training and education. The topic typically focused on the current state of records management and the movement toward technology in the future.

The event must be of value to your clients and prospects or they won't attend. It must be carefully planned and the timing has to be just right for it to work. If you are not diligent with your plan, it may be a waste of time and money. I have conducted nearly 100 of these events and have had mixed success. Those that have been the most successful have followed a strict discipline and time line.

It takes about eight weeks to plan and implement a symposium event to get the results you want. The first two weeks are related to site selection, gathering your resources and planning the implementation process, which generally takes six weeks to accomplish. Each day during the six weeks, there are duties to perform. Each step leads to the next step and all are connected in a workflow process that should yield up to 50 percent of the invited guests in actual attendance at the event.

Plan the Work and Work the Plan

The Location. Pick a place convenient to most of your prospects. I know people who have tried beautiful locations that, though appealing, were just not convenient. The room should be suitable for adult education. It should be set up with tables for writing in classroom style--do not use an auditorium-style setup. The tables should be set with note pads and pens and should not be crowded.

The Materials. You should provide a printed copy of the presentation in Microsoft PowerPoint "notes" format. The printed presentation should be formal and inserted into a folder with your sales and marketing materials, and business cards. It is advantageous to include an electronic copy of the presentation and materials on disk or CD. Everything should be in place before the symposium begins.

The Time. Timing is crucial. Depending on your prospect base, the timing could be different from industry to industry. Always avoid the beginning or end of any month since these are always busy times for administrative personnel. The seminar industry has determined that Tuesdays are the best day of the week for out-of-office educational events. Always avoid Mondays and Fridays.

The Schedule. As I mentioned earlier, it takes about two weeks to find a site and determine the time line. The next six weeks includes many activities and must be managed carefully and diligently. The most important ingredient is getting the prospects to come to the event.

Determining the Value. Value is difficult to quantify. It is important you put yourself in your prospect's shoes. You are attempting to determine what value this event has to him. If you are to get prospects to attend the event, you must provide one or more valuable skills, tools or resources. They must know they will walk out with something more valuable than the time they spend with you.

Educational Content. It is my experience that prospects want to know how to solve their records-management problems, what the future holds for them and how they can prepare for it. You may focus on problem solving, skill development, tool selection and resource identification. Remember that you are essentially presenting yourself as the "expert" and principal resource for them to look to for solutions to their problems. Your course content should be professional and current. Your clients and prospects should consider the presenter an expert.

Follow-Up. As important as it is to get your clients and prospects to the symposium, it is equally important to follow up with them. The "hook" of the symposium is the survey. Your primary goal is to get your client or prospect to commit to a survey or needs assessment. This requires quick-response follow-up after the symposium.

Once done, you will have accomplished several goals in the process of planning and hosting a client symposium:

  1. Your prospects will have given you their valuable time, and they are now invested in you.
  2. You will have presented your company as expert in the field.
  3. Records management will be fresh in your prospects' minds.
  4. You will have given your prospects something of value--information.
  5. Prospects will be familiar with you and your company.
  6. You have provided prospects with the next necessary step, the survey or needs assessment.

Regular columnist Cary McGovern, CRM, is the principal of FileMan and FIRMS (FileMan Internet Records Management Services), which provides all of the materials, resources and content expertise necessary to hold a client symposium. If you have questions about these or other resources, including information on marketing, starting up or operating a records- management facility, call 877.FILEMAN or e-mail [email protected].

Go for Mobile

Go for Mobile
Portable storage units add flexibility, profitability to your business

By Amy Campbell

With a self-storage facility seemingly on every corner, standing above the crowd is a challenge in this industry. Offering ancillary products such as packing materials or free use of a company-owned moving truck has become commonplace. But there's another growing trend in the industry that takes the self-storage concept one step further: mobile storage. Whether offered as an ancillary product or used to expand an existing facility, mobile storage embodies the one thing everyone is looking for: convenience.

A New Market

"Three years ago, when we first introduced mobile storage, we were educating people about what the service is. Now, we find more of the people who call us already know what it is, so we're doing more selling of our containers than of the whole concept," says Dustin Deal, sales manager for Kontane Inc., maker of the HomePak, a wooden mobile-storage container.

Originally promoted as home- storage containers, mobile storage has recently been embraced by the self-storage industry as an ancillary product and marketing tool. "It's a market in the beginning stages that's really getting ready to take off," Deal says. Simply put, it's storage that comes to the customer. In the average scenario, a self-storage customer rents a truck, fills it, drives across town to the storage facility to unload, then returns the truck. With mobile storage, the container is delivered to the customer, who then packs it and uses a personal lock to secure it. When the container is full, a driver returns it to the warehouse for storage. The self-storage operator makes money by charging a rental fee on the container.

The customer-friendly concept is convenient, Deal says. "Now customers don't have to go out and rent a truck, try to pack all their items in it and move it in one day. Their other option is to go to a professional moving company, which is obviously not a cheap thing to do. Mobile storage lies somewhere in between," Deal says. "It takes the truck driving out of the process, but allows customers the option of packing the containers themselves. A lot of people feel more secure packing their own items. That's one of the main selling points."

Tim Riley, founder and CEO of Washington-based Door To Door Storage, says the mobile-storage market is still in its infancy. "It's much like the self-storage business was in the early 1970s, where there was a lot of product being built but the consumer hadn't figured what it was."

Mobile storage is another way for a self-storage operator to expand his market, says Chris Havener, president of Havener Enterprises, maker of the Pro Box storage vault. "A lot of companies look at adding truck-rental lines. But when you're a dealer for U-Haul, you're doing the work and they're making the money. This is another option," he says.

Box Trotters took the home-delivery storage concept one step further. The South Carolina company delivers containers to the customer, then arranges for the containers to be shipped across states via intermodal stack train. "It's actually a very high-quality method of transport and it's very economical," says company President Henry Cox. "Everyone is concerned about energy consumption and conservation these days. The fuel costs for the railroad are typically much lower than trucks, so it can be cheaper depending upon the shipment."

Box Trotters offers self-storage operators an alternative to purchasing and storing containers by enabling them to become agents. "We've been getting a lot of inquiries from mom-and-pop self- storage operators," Cox says. "Because they don't have the resources Public Storage and Shurgard do, they have no ability to sell the service. This gives them an opportunity to compete with those companies with very little investment. We support them with all the marketing, the brochures, the website enhancements. It basically is an adjunct to their existing self-storage operations," Cox adds.

The Box

Just as there are a myriad of self- storage facilities to choose from, there is also a variety of storage and shipping containers. Over the years, family-owned and operated Seattle-Tacoma Box Co. has designed 16 models of mobile-storage containers. "We went through quite a few before we found one that worked well," says Jake Nist, whose family has been making storage containers since the 1950s. "We've found a design customers seem pretty happy with, and they're withstanding the pickup-and-delivery and warehousing process pretty well."

Seattle-Tacoma's most recent invention is a cardboard, one-way container. "Basically, it gets shipped from point A to point B and gets disassembled at that end," Nist says. "It's allowed mobile- storage people to service more than just their local area. Now, they're able to move someone from point A to point B without having to worry about getting their containers back."

James Wayman, owner of Store to Door in Woburn, Mass., also sells a one-way storage container. The 8-by-5-by-7.5-foot box holds one-and-a-half to two rooms of furniture and up to 2,000 pounds. "The One-Way is self-contained, has no hardware and an all-weather, plastic sealer over it," Wayman says. It comes in an easy-to-assemble kit and costs less than $150. The container gives self- storage operators an alternative to the standard shipping vault. "It's just like selling supplies. You sell boxes for $8.95 or you sell a wardrobe box for 12 bucks. You can sell them the One-Way moving box to put their whole apartment in for $150 to $200," he says.

Havener Enterprises once used wooden boxes for its 250,000-square-foot warehouse. "But we didn't like them," Chris Havener says. "You had to cover them. They leak. They weren't as durable. So we started building the metal boxes for our own use." Havener now markets the Pro Box, a 5-by-8-foot box that can be assembled in 30 minutes. "The biggest advantage to our box is you don't need a cover for it and it's very durable," Havener says. Self-storage companies can also use the box as a marketing tool by slapping a magnetic sign on the side when it's out of the warehouse.

Kontane has found its product, the HomePak, a great success, partly because of it's versatility. The 7-by-5- by-8.5-foot container is constructed of exterior-grade plywood and a moisture-proof plastic lumber base that cannot rot, split or splinter. The HomePak also has a roll-up door and vinyl cover, making it ideal for storage use or as a moving tool. "It's a convenient concept," Deal says. "Once people try it, they like it."

From wood to steel to cardboard, the type of container you choose depends on several factors, including the purpose of the container, cost, equipment needed and available space. Many companies, such as Kontane, offer lease-to-own programs. Other products, such as the one-way containers, cost considerably less than wooden or steel vaults that average around $300. Unfortunately, most companies don't have a chunk of money to invest in containers and equipment. However, there is another avenue to consider. "You can start off on a small scale with 10 or 20 containers and work your way up," says Tom Moore, general manager for Florida-based Jacksonville Box and Woodwork Co.

Getting Started

The kind of equipment you will need highly depends on your facility, your existing equipment and the services you want to offer. For example, the one-way vaults only require storage space, whereas purchasing wooden or steel vaults will call for space and equipment. "Self-storage owners, if they're going to offer mobile storage, really need to research what all this entails," Deal says, keeping in mind that many self-storage operators are starting from ground zero. "Obviously, most of them don't have a truck. They would need some kind of flatbed truck to deliver the containers. And then they would also need the containers."

Start-up costs vary but can reach as high $2 million and are largely undefined in this market. "If you're looking at getting into this business, make sure you have plenty of capital. There's not a lot of off-the-shelf equipment," Riley says. In addition to the storage containers, a flatbed truck and forklift are necessities for moving and transporting vaults. There are also space considerations to hold the containers and equipment. "You need to consider the warehouse space. Are you going to lease or are you going to own it?" Riley asks.

Pricing is another factor. "Don't underprice the service," Riley warns. "I see a lot of people try to come in and price at the low end and charge self-storage rates. You need to charge double what self-storage rates are in a prevailing market." A 30 percent to 40 percent markup is reasonable, Riley says. "A lot of the costs that don't exist in the typical self-storage model do exist in this model. You've got a lot more labor, for one. In self-storage, you have one to two bodies to run a site. In our business, it could be up to 10."

Keeping the container to the industry standard of 5 feet wide by 8 feet deep by 7 feet tall, with a door on the end and a hinge on the left, could be a cost savings, Riley says. "There are huge benefits to standardizing the containers. One reason is you can share containers with others." The size of the containers really doesn't influence a customer, he adds. "Everybody seems to think, 'If I just had better containers than brand X or Y, I would get all the customers.' Well, it doesn't quite work that way," Riley says. "It's a people business. They buy from people--it's not because you've got a great container."

Taking a Risk

The start-up of a mobile-storage operation doesn't end after you purchase containers and equipment. "One caution to anyone getting into this business is he needs to promote the product and service well. In most areas of the country, the market is still underdeveloped," Deal says. A simple Yellow Pages ad won't be enough, he warns. "For self-storage, that's what they're used to doing. That's what they've done for years. Everybody knows if you need storage, you can look in the Yellow Pages and you'll find tons of ads in there," Deal says. "You can't do that with this because people don't know what they're looking for yet. It takes more of a hands-on approach in the market." Deal suggests forming key relationships with apartment managers or realtors in the area, direct mailing to people living in apartments or other interesting marketing ideas.

In other words, self-storage operators should take a proactive approach, Nist says. "You want to have a solid plan of attack, and a good business and marketing plan." Without them, seasoned operators say, it's unlikely mobile storage will become a viable commodity for your business. "The business model for this part of the industry is not yet proven like the self-storage business model," Riley says. "This business model is new and still in the research and development stage. Basically, that means you're at your own risk."

Although it's not an established market, Riley says the promise is there. "Customers love it. That's the bottom line. The next thing is now that they love it, can we make any money at it? That's still to be proven," he says. "The fascination and motivation for those involved in the business today is we know customers like it. We're all racing to prove a business model. And if you want to enter that race, just understand the stakes are high." But for forward-thinking self-storage owners, it's worth the gamble, Riley says. "It is definitely a niche that will absolutely be in the storage business 10 years from now. No question in my mind. There's just too much going for it."

Adding On

Not all self-storage operators can afford the high cost of adding mobile storage to their existing services. However, there's another use for mobile-storage containers that not only has fewer up-front costs but can be just as lucrative. Portable self-storage units can be added to your existing buildings as additional storage. "Portable storage offers a lot more flexibility," says Johnny Green, owner and president of Portable Self Storage Inc. in Bonney Lake, Wash. "You can pick them up and relocate them, change the mix, sell them individually or relocate the whole complex to another site. You can't do that with conventional self-storage."

The 10-by-20-foot standard portable comes in an easy-to-assemble kit and looks identical to permanent storage buildings. "Our modules are designed so they can be assembled in place and trimmed, so the finished group looks like conventional self-storage buildings," says Terry Wellner, owner of Modular Mini Storage in Tualatin, Ore.

"Basically, it's an instant building," says Wayne Terry, marketing director for California-based Triton Mobile Storage Inc. "We take the containers and modify them to resemble a self-storage unit. They have multiple compartments and roll-up doors. It' an immediate way to grow."

Another advantage portables have over conventional storage is flexibility. "Frequently, portables can be placed where permanent buildings cannot--for example, on certain easements or setbacks, under power lines or where the maximum area of permanent building has already been built," Wellner says. "You can use them to fill in areas around your facility or place them along property lines to enhance security." Most portables are also climate-controlled and use little energy. "Our portables are high-quality structures just like our permanent buildings," Wellner says. Portables also offer the same amount of security as traditional storage buildings. "We use the same type of roll-up doors as other storage units so security is virtually the same," Terry says.

And the investment in portable storage can be considerably less than that of conventional buildings. "You can do it in phases--increments of one, two or 10 as you develop your market," says Green, who uses portables at his facilities in Washington and Canada. "You don't have that large capital outlay until you reach your absorption. In most new starts, there's a substantial amount of risk in the capital outlay, but also, you're betting on a market that may or may not be there. If it isn't, what do you do? Whereas, your options are always open with the portable units." One of those options is to sell them. "The portable lends itself to so many uses. It's a product that has a resale value. It can be sold to just about anyone--police departments, schools or churches," Green adds.

Love Them or LOSE THEM

Love Them or LOSE THEM
Seven strategies to retain employees

By Robert B. Tucker

Finding good employees has never been more challenging than it is in today's tight market, and retaining them is even tougher. Companies now face the most competitive job market in decades, and losing employees can ravage your bottom line. Consider the productivity and replacement costs involved when an employee walks out the door. Research indicates losing one employee costs a company an average of $50,000. So how do you retain employees? Here are seven strategies that will help:

1. Create a Great Environment

Build a supportive and challenging workplace where communication is encouraged, initiative is rewarded and development is provided. A good work environment offers employees interesting work, growth opportunities, ongoing training and a chance to be heard. This environment needs to be supported by a strong, well-defined culture, and maintained by managers who take an interest in their employees. Create the kind of place employees want to return to, not run from.

2. Support Your Employees

Talk with your employees. Make sure they know their jobs and your expectations. Provide employees with clear goals and the information resources necessary to work toward them. Include two-way conversations that allow employees to be heard. Value employees' input and include them in the decision-making process. Provide opportunities for making meaningful contributions. Good employee-management relationships are essential. The Gallup Organization's study of 80,000 managers in 400 companies found an employee's relationship with his direct boss is more important for employee retention than pay and perks.

3. Provide Ongoing Training and Development

This is key to keeping employees--and keeping them enthusiastic. Involve your people in the discovery of new opportunities and innovations. Develop them through mentoring programs. Provide learning opportunities at every level of the organization in the form of seminars, educational opportunities or training programs. Armed with new skills and motivated by the learning process, employees will gladly assume new responsibilities and meet challenges with greater initiative. As long as workers are learning and stretching, they will keep adding value in the form of tangible end results, and will stick around.

4. Re-Recruit

Take the time to find out how your people are doing. Find out what their needs are and whether those needs are being met. Find out how the company can support its employees. Make it a priority to have the conversation now. Take time to ask them, "What are the kinds of things that will keep you? What kinds of opportunities, growth, etc., do you want?" Make it easy to move and grow within the company and employees will be less likely to look outside. Never assume they can't be lured away.

5. Rev Up Recognition

Respect and appreciation earn respect and appreciation. Employees often say they never hear the words "thank you" from their bosses. Genuine appreciation costs nothing, but can yield significant benefits. You need to let employees know how much you appreciate them--regularly. Recognize even the little accomplishments. Give employees "brag" time to acknowledge their successes. Companies are recognizing their people more by acknowledging work, birthdays and milestones at meetings.

6. Make Work Fun

How can you make work more of an adventure? How can you get your people to want to come to work? When was the last time you celebrated some victory in your company, some milestone that everybody can get excited about? Find ways within your company to make your employees want to work and succeed. Create an atmosphere that celebrates success. One company has instigated a plan called "corporate cookies" to build employee camaraderie. One afternoon a week, cookies are delivered and everyone sits around the office talking about "what is going right." Simple things like this can have a big effect.

7. Walk Your Talk

Employees are looking to the workplace--and to you as the leader--for authenticity. It is one of the most critical criteria in retention. Southwest Airlines, a company that has shown steady profits year after year, receives fewer customer complaints and maintains greater retention of employees than any other U.S. airline. According to Fortune magazine, Southwest is also one of the most desirable companies to work for in America. What is Herb Kellaher, the company's CEO, doing right? He is making work fun, but he is also walking his talk. There is an authenticity about management that puts out company values and lives by them. Kellaher said recently, "Figure out what your values are, because once you figure out what your values are, the rest falls into place."

Robert B. Tucker, president of The Innovation Resource in Santa Barbara, Calif., provides customized keynotes and seminars on the topic of "Managing the Future: Age Waves in the Workforce." For more information, call 805.682.1012 or e-mail [email protected].

Getting Started

Getting Started
Selecting a solid site for a new self-storage business

By Harold C. Leslie

In today's market, it is more important than ever to do your homework before investing in a new self-storage project. Unlike the early days where you could build a project and expect it to prosper with little or no market study, now you must take an educated approach to your project planning or risk losing large amounts of your hard-earned money. Plan to spend at least $3,000 to $5,000 to develop information that allows you to make the right decision of whether to stop or move forward with a project.

Some areas of the country are now overbuilt, with too many available square feet of storage and too few consumers. There are many resources available to the prospective self-storage owner that can indicate whether a site would be profitable or if it would fail.

Resources for Information

Use demographics/market study companies and consultants familiar with the industry to tell you who are the available customers in an area, what is their mean income, what is the daily traffic count past the location you are looking to develop, if an area is growing and, if so, how fast. Also important is information on existing storage facilities in the area (prices and occupancy). These facts will guide you in the initial choice of facility location, and will give insight to the preparation of unit mixes, facility size and how much rent you may be able to charge. Many market-research companies offer packages tailored to self-storage.

One useful source of information is the Inside Self-Storage Factbook. This is published annually and contains information on financing, real estate, development, marketing, construction, management and other key aspects of the self-storage business. It is a great source for beginners. Also available is the The Self Storage Almanac, produced by MiniCo, an annual statistical abstract of the industry. It contains information on unit mixes, nationwide rental rates, construction costs, population traits and more. It may not give you the exact information for your specific site, but it can give you a statistical overview. If you have no previous self-storage experience, you may find both publications extremely helpful.

Another available tool is the expertise of industry professionals. Attend tradeshows and conferences held throughout the year. There are self-storage development seminars and workshops held regularly, sponsored by the major self-storage publications (including this one). Watch for events in your area. While attending, makegood use of the experts available to you. Listen to the speakers and talk to other attendees. Keeping up with the changing trends of self-storage will allow you to build a facility that will meet the needs of current and future customers.

Choosing a 'Good' Site

Once you have determined where your project should be, there are other important aspects to consider. A "good site" for self-storage should be:

  • Located on a major traffic artery.
  • Located between dense multifamily residential areas and retail locations.
  • On the "going home" side of the road when possible.
  • Zoned for self-storage use by virtue of being eligible for a special-use permit.
  • No closer than 3 miles to the nearest competitor, depending upon population (for urban sites, the distance can be as low as 1 to 1.5 miles).
  • When looking to purchase a parcel of land, you must know what you can pay and still be cost-competitive. To determine this, I use the 66 percent rule developed by Bruce Manley and Buzz Victor, two of the founders of the self-storage industry:

The 66 Percent Rule

Average the per-square-foot rate for a 10-by-10 and a 10-by-15 storage unit. Divide the total by .66. The result is the most you should pay for each square foot of ground. For example, let's say the rent on a 10-by-10 unit is $85 per month or $1,020 per year. That means the unit will earn $10.20 per square foot ($1,020 divided by 100 square feet). The rent on a 10-by-15 unit is $98 per month or $1,176 per year. That unit will earn $7.84 per square foot ($1,176 divided by 150 square feet). The average of the two is $9.02 per square foot. If you multiply this amount by .66 (66 percent), the result is $5.95. This is the most you should pay for each gross square foot of land you purchase.

Keep in mind that the building-to-land ratio of your project, including water retention, drives, setbacks, etc., must be in excess of 40 percent. For example, a site of three acres (130,680 square feet) must produce a minimum of 64,272 square feet of rentable storage.

In the process of purchasing a parcel of land, you will need to use a good title-search company that will find any recorded easements, highway right-of-ways, utility easements and service-access easements you would need to be aware of before purchasing the land and planning your buildings. Another factor to be aware of before signing the contract on a parcel of land is the state of the land itself. What kind of business was there before? You should invest in an environmental assessment before making a commitment on the land, particularly in urban areas. A professional environmental and geotechnical assessment will include:

  • An inspection of the physical characteristics of the property and surrounding area including topography, geology and hydrology.
  • A review of all reasonably ascertainable historic records.
  • A review and inspection of the current condition and uses of the adjoining properties to identify the presence of any environmental conditions or regulated activities with the potential to have a negative environmental impact on the property.
  • A review and inspection of the current condition and uses of the property, including compliance with appropriate regulations.
  • Soil borings collected using a geoprobe drill rig. These samples are to be carefully handled and tested in a laboratory for the presence of harmful contaminates.
  • A full written report, including conclusions and recommendations.

While it may sound extreme to go through all of this, it can save you from becoming responsible for cleaning up a toxic waste dump left by a prior owner, or being stuck with a piece of land you cannot build on economically (or at all) due to poor soil conditions. Also be mindful that it will be difficult (if not impossible) to obtain financing on a substandard site. (For more information on the environmental site assessment, see the May 2001 issue.)

Permits and Zoning

There are issues to be reckoned with related to community acceptance of self-storage. Many areas are now requiring elaborate architecture or expensive facades to make the facility blend with existing structures and surrounding architecture. Zoning and planning boards must be approached with an eye toward education, highlighting the advantages of having adequate self-storage available in the community. Here are some benefits you can emphasize while presenting your case:

  • Self-storage is quiet.
  • It acts as a good buffer.
  • It produces very little traffic.
  • It has no impact on utilities or schools.
  • It provides good tax revenues.
  • It's a community service.

You will also need to be informed on the community standards for construction such as: allowable coverage on your land, building setbacks, parking requirements, minimum drive widths, sign limitations and setbacks, landscape requirements, water use and storm-water management, etc. The better informed you are about these issues before you buy a piece of land, the better you will be able to design your facility correctly the first time, without costly changes after plan review.

Design Options

After you have settled on where you will build, you must design the facility. Look for an engineer or architect who already has experience in self-storage. The unique requirements of storage projects--in current building techniques and in conformity to codes--can be tricky. You want someone designing your facility who already knows which hoops to jump through. You do not want to have to pay while this person learns the ins and outs of your industry. There are special code requirements for building separation, fire codes with special requirements for storage, and certain mandatory requirements for hall widths and maximum travel distance between exits, etc.

When you have a preliminary plan ready, you will have to present it to the building department for permitting. In most cities and towns, it would seem most bureaucrats disseminate misinformation and inaccuracy. We have found in many cases municipal employees feel it is their job to be adversarial rather than helpful. This is particularly true when it comes to providing answers that require interpretation.

How to Approach the Bureaucracy

Be courteous. Be honest about what you do and do not know. If you cannot make the progress you want on your own, consider the services of an attorney, architect or engineer. However, as I advised before, any of those three disciplines must have previous experience, as you do not want to pay to educate them to self-storage.

After you have selected a site and had preliminary drawings made, you must bear in mind that, realistically, the occupancy rate of your facility after 18 months of operation must exceed 80 percent to achieve stabilization. If you fail to select a viable site, you may find yourself paying the mortgage out of your own pocket. If that continues for more than 18 or so months, you may find your financiers looking over your shoulders in a most unpleasant way.

Make sure to do all of your "homework" before proceeding on an investment that could easily amount to more than a million dollars. Don't think you can do it on the "cheap." Paying a few dollars before you build may save you much more later in the development of your self-storage project.

Harold Leslie has been involved in the self-storage industry for more than 28 years. He currently serves as president of Leslie Industries Inc., a design and engineering firm that has completed more than 50 million square feet of self-storage projects to date. Leslie Industries' European affiliate has completed more than 5 million square feet of building conversions to self-storage in the United Kingdom and continental Europe. Mr. Leslie is also is the owner of five self-storage facilities in the United States. For more information, call 850.422.0099;

Inside Self-Storage Magazine 07/2001: Fire Prevention & Safety


Fire Prevention & Safety

By David Wilhite

Fire Prevention Week is held each year to commemorate one of the worst fires in American history--the Great Chicago Fire of 1871. According to popular legend, at about 9 p.m. on Sunday, Oct. 8, a cow in a barn behind Katherine O'Leary's cottage at 137 DeKoven St. kicked over a lantern, starting the blaze. Unusually brisk fall winds caused the fire to race out of control and, by 1:30 a.m., the entire downtown business district was in flames. By dawn, nearly 300 people were dead and more than 17,500 buildings had been destroyed.

In 1922, President Warren G. Harding established National Fire Prevention Week to honor the memories of the victims and drive home the importance of fire safety. It is important to remember that fire prevention should be practiced every day, not just one week each year. By following safety procedures and recognizing potential hazards, you and your employees can prevent fires at your facility and help save lives. The best way to survive a fire is through prevention. Become aware of any potential hazards that exist on your premises and take steps to correct them immediately.

Smoke Detectors

Smoke detectors save lives. They are one of the most important safety devices available for protecting your premises against fire. Low in cost and easy to install, smoke detectors are unobtrusive and require little in the way of maintenance. Most important, they can provide the early warning you need to detect and contain a fire before it destroys your business.

When choosing a smoke detector, be sure it has an easily-accessible test button and a long-life battery backup. The alarm should be tested for proper operation once each month and a new battery should be installed at least once each year (or whenever the detector starts to "chirp"). Be sure the type of smoke detector you choose can be daisy-chained with all of the others on your premises so an alarm condition will trigger all of the alarms in the chain.

General Fire-Prevention Guidelines

  • Conduct a general fire-hazard check when you secure your facility at the end of each business day.
  • Periodically check all smoke detectors for correct operation and replace backup batteries.
  • Lock all sprinkler-control valves in the wide-open position using sturdy locks and chains.
  • Keep an adequate number of fire extinguishers on hand and recharge them regularly.
  • Keep heating, air-conditioning and maintenance areas clean and free of any flammable materials.
  • Use light bulbs that are the proper wattage for your lighting fixtures. A bulb of too high wattage or the wrong type may lead to overheating and cause a fire.
  • Don't plug one extension cord into another.
  • Keep fire exits and escape routes clear and well-marked.
  • If possible, provide around-the-clock security patrols.
  • Periodically inspect your premises for any new fire hazards.

What To Do in the Event of a Fire

Knowing what to do in the first few minutes when a fire breaks out is essential for minimizing property losses, preventing injuries and saving lives. In the event of a fire, call the fire department immediately, regardless of the size of the blaze (never assume someone else will call). Many businesses have been destroyed by small fires that got out of control in the time needed by the fire department to arrive.

You should also activate the nearest fire-alarm pull station if one is available on your premises. A special note for indoor-storage owners: If you or your employees have any doubt about the size of a fire or your ability to contain a blaze, you should evacuate the premises immediately and be sure to close all doors and any windows behind you. If you encounter smoke, take an alternate exit or crawl underneath it, staying low to the floor where the air is cleanest.

A note about fire extinguishers: In the event of a fire, fire extinguishers will almost certainly be your first line of defense. When choosing a fire extinguisher, you need to be aware there are four basic types suitable for different situations. Type I is rated for use on small paper or wood fires; Type II is rated for use on grease fires; Type III is rated for use on electrical fires and Type IV is rated for use on all of the above. Although a Type IV extinguisher costs a bit more than the others, it is preferred for the added protection it offers.

As a facility owner, you are responsible for preparing a fire-safety plan and training program; posting fire emergency-exit procedures for tenants; and conducting employee fire drills on a regular basis. As part of your operation's safety program, your employees should know their responsibilities in the event of a fire according to your fire-safety plan; the location of the two exits closest to their work area; the location of the nearest fire-alarm pull station (if available on your premises); and the phone number for the nearest fire department (calls dialed to 911 may be subject to unnecessary delays).

Reducing the Likelihood of Arson

Arson is one of the leading causes of commercial fires. In fact, fire-safety experts estimate that nearly one-quarter of all fires affecting businesses may be the work of arsonists, many of whom are vandals or burglars attempting to destroy any evidence of their break-in. Below are some commonsense guidelines you and your employees can follow to reduce the likelihood of arson at your facility:

  • Watch out for strangers who appear to be loitering on or around your premises; notify the police in the event of any suspicious behavior.
  • Be especially alert for any threats from, or unusual behavior by, disgruntled employees.
  • Be sure all doors and windows are securely locked after working hours.
  • Make sure outside doors, windows and alleyways around your premises are well-lit in the evening hours.
  • Keep trees and bushes trimmed low near buildings so they can't be used as cover by an intruder or present a fire hazard.
  • Keep all public areas in your facility clear of any flammable materials.

Fighting Small Fires

The very first thing you or any employee should do in the event of a fire is call the fire department (or dial 911) and ensure everyone has evacuated your premises. Once that has been done, you may attempt to control a small fire with a fire extinguisher properly rated for the type of fire you are fighting. The most important concern when a fire breaks out is the safety of people on the premises. Keep the following three points in mind:

  • Never fight a fire if it is large or spreading.
  • Never fight a fire if your escape route may be blocked by the spread of fire.
  • Never fight a fire if you are unsure how to correctly use of the extinguisher or are unsure of the type of fire.

No matter how large or small your self-storage facility may be, securing adequate coverage is essential for protecting your business and your peace of mind.

In addition to loss-of-income and extra-expense coverages, Universal Insurance Facilities Ltd. offers a complete package of coverages specifically designed to meet the needs of the self-storage industry. For more information, or to get a quick, no-obligation quote, write P.O. Box 40079, Phoenix, AZ 85067-0079; call 800.844.2101; fax 480.970.6240; e-mail [email protected];

Is Marketing Dead Weight?

Are You Waiting for Rivals to Strike?

By Harley Rolfe

There is good reason why it takes the jolt of competition for most business owners--particularly in this industry--to develop a serious interest in marketing. Implementing a sound marketing program requires a change in attitudes and methods. Change is never easy.

What I often hear from self-storage operators is they are ticked they now have to "waste" time and money on marketing. They're not so sure the thing we call the free-enterprise system is all it's cracked up to be. It doesn't help to say competition is a way of life for many businesses and the foundation of our economic system. They feel self-storage was doing just fine without it, thank you very much. They had satisfied customers before, and they have satisfied customers now. Only business is more hectic these days. Realistically, operators know they need marketing, but they're reluctant.

Economic attitudes vacillate between the fear of loss and the opportunity for gain. Of the two, loss is much more insistent. Why? In the case of loss, you already possess something. You know exactly what the stakes are. Losing it is painful, even devastating. However, gain is speculative. It may pan out, it may not. That's why dips in the stock market are so much more precipitous than increases. Your ownership of a self-storage facility is similar. Competition presents you with the potential loss of revenue you presently enjoy. This is very real. The other benefits of marketing are opportunistic and not nearly so compelling.

There are good reasons to engage in marketing activity, but the trigger is usually curiosity about how to cope with the potential revenue loss occasioned by competition. Those other benefits represent potential gains and are, therefore, less urgent.

Is Marketing Dead Weight?

Is marketing just so much extra expense to a self-storage operation? It doesn't have to be. Marketing activities can provide management tools you can't get any other way. In my last column, I talked about how marketing helps us unravel and analyze the income half of our profit-and-loss statement. I have generally been employed by or operated competitive businesses in the course of my career. I can't imagine operating without the mechanisms afforded by marketing--after all, I want to know as much as possible about the source of my bread and butter. Here are some ways marketing can improve your business:

1. Use marketing to direct your facility toward the best type of tenant.

Take tenancies, for example. Aren't long ones the best? No owner has ever told me how he has identified and sought out long-term uses/users; but owners could feasibly sift through their tenant base, look for long-term renters, figure out why they use storage, and then compose programs to attract more of the same. The sleuthing part is what we mean when we refer to "market research." Many feel such a high-powered term couldn't possibly apply to their 500-unit self-storage facility. But it does.

The leading characteristic of any marketing program is the subdivision of the tenant population into meaningful segments. Knowing your market means knowing what the segments are and how to reach and influence each one. Generally, the owner takes what comes his way and hopes for as many long-term renters as possible. I'm suggesting you can do this more deliberately.

2. Marketing can improve the value of your facility.

You know the formula for the determination of the value of a business involves two factors: the net profit and the capitalization rate. Take the net profit (before debt service) and divide it by the cap-rate percentage. The result is the dollar value of your business. Most businesses place a lot of weight on net profits and pay little attention to the cap rate, but they are equally important.

More precisely, the cap rate recognizes the predictability of income as business risk. If income is unpredictable and uneven, business risk is higher. That is recognized by a higher interest rate. Anything you do to stabilize income helps lower the cap rate, so extending average tenancy duration should reduce the cap rate and increase the resulting facility value. I admit the appraiser may not instantly respond to your entreaties about reducing cap rate in recognition of better income control. But he will understand and be able to grant preferential language in his report when he finds a departure from the usual pattern.

Presenting a potential facility buyer with a longer-than-average tenancy pattern buttressed with a methodology that produces it will discourage the inclination of the buyer to counter. He knows he will inherit high income stability. He knows you can show him how to maintain it. Your price is justifiable.

3. Marketing can improving the value of your offerings.

Far from being a needless expense, promotions make a product or service preferable. Something unfamiliar makes us hesitant. A person venturing into unknown territory (i.e., someone who has never used storage before) will do so with trepidation. A first-time renter is totally dependent on what he can see and what he is told. He has no experience to guide him. This is the perfect opportunity to demonstrate the value of promotion.

Promotional activity will offer him reassurance. Use of brand names, publicity or media produces familiarity, which removes some of the customer's wariness and creates preference. Preference either makes you a buyer's first choice, or allows you to receive a price premium. Maybe both. It is difficult for a commodity offering to receive a price premium, but being consistently full in the face of competitive market conditions is not bad. If you want the premium, add useful features or services that warrant it.

The overall mission is to deliver higher occupancy. When you consistently have high occupancy, it is time to consider increasing rates. The goal is to be able to raise rents in the face of active competition.

Harley Rolfe is a semi-retired marketing specialist whose career includes executive-level marketing positions with General Electric and AT&T. He also owned lodging and officefacilities for more than 20 years. Mr. Rolfe holds a bachelor's degree in economics from Wabash College and a master's degree in business administration from the University of Indiana. He can be reached at his home in Nampa, Idaho, at 208.463.9039. Further information can also be found in Mr. Rolfe's book, Hard-Nosed Marketing for Self-Storage.

Inside Self-Storage Magazine 07/2001: Occupancy Rates as a Marketing Tool

Occupancy Rates as a Marketing Tool

By Fred Gleeck

At a recent self-storage tradeshow where I was exhibiting, an operator walked by my booth and looked up at my sign, which read, "How to competition-proof your self- storage facility." As he walked by, I tried to get him to slow down and talk. He paused briefly, looked at the sign and then blurted, "Why do I need you? I'm 100 percent occupied!" But as most intelligent operators know, this is misguided. You never want to be fully occupied, for three reasons: First, you waste advertising dollars; second, you invite competition; and third, you're not maximizing profitability.

Occupancy and Advertising

Every phone call made to your facility from a potential tenant may cost you as much as $80 or $100 in advertising. How did I come up with this figure? Add up all of the marketing and advertising dollars you spend in a given year. Then tally all of the calls you receive from prospective customers in the same year. Divide the number of dollars by the number of calls and you have your cost per call. In a city like Los Angeles or Phoenix, this cost could well be more than $75. In your market, it might only be $20.

When people call your facility and you're 100 percent occupied, you may as well take a $20 or a $50 or a $100 bill and burn it. After all, you've paid to get the phone to ring, yet you've got nothing to sell. This is ridiculous. Some operators say, "I put them on a waiting list." The problem is that when people call to inquire about storage, 90 percent of them will rent a unit within the next 14 days.

Inviting Competition

There are one or two companies that employ people to call around the country and identify areas where facilities are operating at 100 percent. This data is then used to tell developers where they might want to consider building. By operating at full occupancy, you essentially invite competition into your area. I'll go so far as to recommend that when people ask you how business is, you don't give them the "full" truth. Rather than gloating about all the money you're making, give the response I use when asked about the state of my business: "We're getting by." Why give people yet another reason to get into the business and compete against you? Aren't there too many of these people as it is?

Maximizing Profitability

Our last reason for not operating at 100 percent occupancy is that when you do so, you aren't maximizing profitability. Take a look at the airline and hotel industries as examples of how to set pricing--the right way. If you think of each seat on a plane or every room in a hotel as a storage unit, the goal is to maximize profitability on each during any given day or flight.

How do they do this? They set their prices where they think they should be, and then move them up or down based on demand. If a certain flight starts to fill up quickly, the prices will rise quickly. The same thing happens at a hotel. If a day or week is in demand, the rates will be increased to maximize profits. This is the same way to work with your occupancy rates.

You need to set your prices based on occupancy rates within a unit size. This is an art and a science. Do not alter your rates across the board by a standard percentage. This is the lazy method of adjusting rates. Instead, consider this approach: Let's say you have 500 units. Let's also assume you have five different unit sizes--100 of each. When you get down to just eight or nine units left within a size, bump up the rates. This is a good rule of thumb, but you also have to consider how quickly these changes take place. If units are renting very quickly, you may want to start bumping up the rates when you've got 10 or 12 remaining.

How much should you raise your rates? The real answer is, as much as you can. The problem is we don't know what this magic number is. In a softer market, you'll want to bump up your rates without moving to the next major increment. For example, if you're at $83, you don't want to go all the way up to $90. You'd be better off bumping the rent to $89.

There are some markets around the country that can tolerate rate increases every three or four months (and lucky you if that's where you own). I have a number of clients in California, where no more storage is being built, who can easily raise their rates three times a year. Depending on how strong the demand is for a given unit, you may want to increase your prices strictly for new tenants. If demand is really strong, you'll want to increase rates for new and existing customers.

You may be asking, "But isn't this unfair?" I guess if you're Jerry Brown you might think so (he's a fairly liberal guy). Let me ask you this question: Do the oil companies think about you and how you'll feel when they raise the rates on the gasoline you buy? I don't think so. Most managers hate to raise prices. Why? Because tenants scream about it. Many managers also feel uncomfortable about owners "gouging" customers. If you're an owner, I hope your managers don't feel this way, but it's a very common sentiment.

Getting Everybody on Board

In order for managers to be on board with price increases, they need to understand how necessary they are for revenue maximization. I can't remember how many times I've suggested clients raise rates against their managers' wishes and they only had one or two tenants move out. When this happens, you know you probably could have raised rates even more. If managers get a hard time from tenants, I suggest they lay the blame on the owner, who is always a convenient scapegoat and can be made to look like the bad guy if necessary!

Pricing decisions should never be emotional. They should be based entirely on the numbers. And keep in mind price adjustments go both ways. Sometimes, you may want to lower prices based on demand. If the demand for a given unit size is low, you'll want to offer specials to bring people in. For example, if you are traditionally slow in the winter months with your 10-by-15s, then you need to offer some kind of a special winter rate on those units. Make sure, however, the special doesn't extend into the time period when demand for that particular size goes back to "normal."

This method of pricing will occassionally produce some odd results. I have seen one situation where the price of a 10-by-10 was almost as high as the price of a 10-by-15. Demand for the smaller unit was greater and the 10-by-15s weren't moving so well. So what? Adjust your prices based on demand. The market will always tell you what to do.

Another frequent question I am asked is: "Is it fair to charge different rates to different people for the same unit?" Let's go back to our example of airlines. Have you ever been on an airplane and asked the people around you what they paid for their tickets? I have. What did you find out? You hardly ever find two people who paid the same exact fare. Is this illegal? I hope not, for the sake of the airlines! It's not only legal, it's great business. The airline adjusts the rates based on demand. You should be doing the exact same thing

The 'Right' Occupancy Rate

What is the "correct" rate at which to keep your occupancy? The answer is: that rate which maximizes profitability on a short- and long-term basis. Profitibility is best achieved by keeping occupancy rates between 92 percent and 95 percent within each unit size. This way, you'll always have something to rent, but you'll be making the most the market will allow. If you follow these suggestions, you'll not only be able to raise your prices, you'll be able to keep your demand for storage high. Here is a summary:

  • Don't be afraid to raise or lower your occupancy rates to meet demand.
  • Adjust your rates for units within a unit size, not across the board.
  • Never operate at 100 percent occupancy.
  • Get managers on board with this pricing philosophy. Explain why it is necessary.
  • Continue to market aggressively, even when you're doing well. All it will allow you to do is increase your prices.

Fred Gleeck is a self-storage profit-maximization consultant. He helps storage owners before and after they get into the business. He is the author of Secrets of Self Storage Marketing Success--Revealed! and numerous other training items for self-storage operators. To get regular tips on self-storage, send him an e-mail at [email protected];  call 800.FGLEECK (345.3325).

Selling Records-Management Solutions

Closing the Sale

By Cary McGovern

This article discusses the most important element of the selling process: the close. All is lost if you get to the point of the close and discover the customer isn't buying. The sales cycle is indeed a process. Getting through that process with a sale is the goal. Without it, you have wasted your time and your customer's time. You should be confident early on in the cycle that you will close the sale.

Selling Records-Management Solutions

There is nothing mysterious about closing the sale. It should be the culmination of a series of events that ensure you will sell the customer your services. Nothing happens until the sale is made. To be certain of success, there must be both a method and management system within the sales cycle. The method should contain several steps, depending on the product or services you are selling. Selling records- management services involves a "solution-sales method" that will ensure you close sales with 75 percent of your qualified prospects.

Some commercial records centers sell records storage rather than records management. Selling storage as a commodity reduces the impact and depth of the records-management sale. The sale becomes an event rather than a solution. Remember that records management services represent a long-term service--and solution--to your customer. It is not like making a one-time sale of an object or finite service. Records-management companies are outsourcers that become resource partners to their long-term customers. After the sale, you will provide a valuable administrative service that becomes an annuity to you and a resource to them--forever.

Seven Sure Steps

There are seven identifiable and very specific steps in the solution-sales method. Converting a prospect into a records-management solution sale is a diligent process. If you do it right, you should know if the sale will close by the time you have completed step three of the process. So, the close begins with step three. Let's briefly identify the seven steps.

Step 1:
Identify Prospects and Make Initial Contact

Create the prospect list from the resources available (i.e., Yellow Pages, chambers of commerce, local business guides and the Internet). Establish rapport with your customers and create an environment amenable to them accepting you as a preferred provider of records-management services.

Step 2:
Qualify Customer Interest

Gain an understanding of your prospects' organization, identify key decision-makers and influencers, and develop an interest in your services by explaining the customer-needs assessment (CNA) method. Get permission to perform the CNA.

Step 3:
Understand Customer Requirements

Conduct the CNA, analyze the data and verify it with your client. This is the most important step because it is here that you make sure all client needs are met--especially those of the process owner and decision-maker. If there is little or no interest after this step, you may decide to discontinue the sales process. You must do everything possible to get concurrence of the decision-maker at this point if you hope to sign the agreement later in the process. This is critical in the sales cycle--for the customer to be in agreement with the results of the CNA.

Step 4:
Determine Client Solutions

You should not have presumed any solutions until this point. You have just uncovered the problem that causes the customer pain. Step four is for developing the solution to alleviate the customer's pain.

Step 5:
Present Proposal and Justification

The purpose of this step is to develop and begin the implementation of a work plan, prepare the proposal documents and cost justification. The work plan forms a logical basis for presenting the proposal based on the customer's needs and stated requirements.

Step 6:
Negotiate to Close Contract

The purpose of this step is to negotiate the terms of the agreement, clarify any issues and time frames, have the customer sign the contract and process the order.

Step 7:

The purpose of this step is to make sure all of the customer's requirements are met. The customer must be trained on the systems. The initial batch of records is reconciled and business begins.

Next month's column will focus on the "Fast-Start Sales Event: The Customer Educational Symposium."

Regular columnist Cary McGovern, CRM, is the principal of FileMan and FIRMS (FileMan Internet Records Management Services), which offer full-service records-management assistance for commercial records-storage start-ups in self-storage operations. For assistance in feasibility determination, operational implementation or marketing support, or for questions on the FIRMS Sales Manager, call 877.FILEMAN, e-mail [email protected];

Sales and Marketing Strategy

Sales and Marketing Strategy
An absolute for self-storage success

By Dan Dombrosky

If you're a self-storage operator or manager, you may be asking yourself: "What's strategy got to do with it? All I'm trying to do is lease up. If I wanted some theoretical mumbo-jumbo, I could read the same books these marketing guys do. Tell me something that applies to me."

If you share this sentiment, I sympathize with you because I feel that way myself. This magazine's marketing columnists and other contributors have done an excellent job focusing on marketing issues and enlightening the readership. And it's true--the basics of marketing theory, concepts and practice cannot be ignored. I am going to do my best to avoid getting theoretical and hopefully throw out a few nuggets of practical and immediately applicable gold.

Analyze the Competition

I cannot think of a single competitive business endeavor where strategy does not play a preeminent role in success. However, it is perplexing how few people recognize strategy for what it is. Because of the rapidly expanding growth in the self-storage business, more attention is being paid to competition. But mimicking competitors' pricing is not a strategy, it's a tactic--and a losing one to boot. All you accomplish is the lowering of both of your profit margins.

If I were advising you, I would tell you to price your product in a manner that supports your strategy. To do that, you have to analyze your competition. Now, I do not recommend having your on-site manager call up and pose as a prospective customer in order to get information. That is demeaning to those of high moral standards and basically a waste of everyone's time. Maintain a positive relationship with your competition to the extent that you can. After all, you have a lot in common. If necessary, rent one of his units to obtain every policy, fee, practice, feature, benefit, strength and weakness you can uncover.

Analysis is the critical starting point of strategic thinking. You must then judge precisely the right moment to attack or withdraw while correctly assessing the limits of compromise. You must remain flexible and be able to come up with realistic responses to changing situations. It doesn't matter whether you are a national or regional corporation or a single-facility owner, strategic business/marketing planning applies to you equally.

A Competitive Advantage

You will increase your probability of success significantly if you apply the basics of marketing to your strategic planning. I once wrote a five-year business and supporting marketing plan for a division of a highly successful corporation. To me, there was always a fuzzy line between the business plan, which included a corporate, customer and competitive strategy, and the marketing plan, which incorporated much of the same.

I said I was going to avoid delving into the theoretical, so suffice it to say that what business strategy is all about--what distinguishes it from all other kinds of business planning--is competitive advantage. Strategy represents a company's attempt to alter its position of strength relative to that of the competition. When that position is compromised it endangers the very existence of the enterprise. It allows the company's profitability to be controlled by its competitors--a situation in which sound management is no longer possible.

In the real world of business, "perfect" strategies are not called for. What counts is a company's performance relative to its competition. A good business strategy is one by which a company can gain significant ground on its competitors at an acceptable cost to itself. The goal is to avoid doing the same thing on the same battleground as the competition.

Pitfalls to be avoided are becoming obsessed with winning and seeing everything in terms of success or failure. Consider moving from a mentality of "success at all costs" to simply avoiding the worst. A lot more choices will begin to open up.

Duking it Out

I was involved in a monumental battle at a first-class, well-managed self-storage site where I was resident manager. The site was state-of- the-art, aesthetically attractive, climate- controlled, and featured the latest security systems, including video surveillance and all the bells and whistles. Our competition was a local owner of a converted storage facility. We were less than an eighth of a mile apart.

One of the first things the established competitor did was install a couple of buildings with amenities identical to ours. He immediately advertised these features and benefits, even though they comprised less than 10 percent of his total square footage. It was a pretty damn good move, I thought. You had to drive by him to get to our facility. He sat up on a hill and was visible for quite a distance, while we were hard to find.

Now here is a sad, but true, anecdote: One morning, we received a call from a woman inquiring about storing her husband's sports car for the winter. We invited her to inspect our site and provided her practiced directions. Two hours later, a call came into our office from her husband. He was trying to reach his wife, who had called him with an insurance question from our competitor's office, where she had ended up by mistake. Both of them thought they were dealing with us, but really ended up leasing from the competitor.

We had been offering a special: rent for one month and receive the second month free. Our competitor responded with: rent for a month, get a month free; rent for two months, get two free; and rent for three months, get three free. If a friend had asked for my advice, I would have recommended he take that deal.

It got to be a battle out of control. There were a lot of fronts in this battle, which included lawsuits and blocked easements and a corporate competitive strategy I was not privy to as a site manager. As an experienced self-storage manager, I was a rookie in this game of competition. As a lifetime marketer, I was determined to fight the good fight.

Learning the Hard Way

The company I worked for was--and is--a highly successful player with more than 35 facilities. It had an obvious business strategy and the operating end of things well under control. Its occupancy rates were above national averages. After 18 months, we were operating this particular site with between 80 percent and 90 percent occupancy, depending upon the season. The company's other local sites were consistently running at a high 90 percent to full occupancy. These other sites were far enough away to not be a part of this competitive battle, though they, too, were beginning to experience increased competition.

Being new to the business, I was looking to learn the key factors for success in the self-storage arena. To me, a strategic plan was not revealed or obvious. It seemed we targeted whomever called and came in to rent. This is not a bad practice if it works, and there was a time it probably did work. In the right place, it probably still does. I thought I might get a pat on the back for targeting long-term, steady-paying commercial clients. After a couple of months, I thought maybe late-fee revenue was an objective. Remember: None of this was explained to me, and I was still learning.

We had a lot of pharmaceutical representatives leasing space. They were mostly young, energetic, friendly people. There was plenty I wanted to find out from these pharmaceutical reps. Did they store with us because we were close to their home or apartment, or because we were close to their sales territory? Did they like the security we provided, or the fact that UPS deliveries were made to their units daily? With the information I gathered I could determine if it would be possible to attract more of them to our site and away from our competitors. For example, maybe they had a counterpart on the other side of town where our company had another store.

The Importance of Strategic Selling

Everything is strategic in self-storage--even phone sales. Tactical phone selling is what you do when you relate your site features and the benefits they provide to a caller's storage problems. But there is strategic phone selling as well, and it is imperative that site managers recognize opportunities to use it. "Strategic" calls will vary. It may be that you receive a call from local government agency you have been working with on zoning issues, and it wants to store some files. You might receive a call from a large hospital close by, notorious for needing a lot of storage. A personal visit and a special pricing proposal may be in order. Perhaps a local corporation will call inquiring about vehicle storage. You may want to go down and explain how your 24-hour, computer-controlled gate access could benefit them. Maybe the mall next door, the one you have been waging accessibility lawsuits with, calls to inquire about storage.

This last example is one I dealt with personally. We had a front gate and parking lot off the mall entry drive that we were not allowed to use because of pending legal appeals the mall had brought against us in a lawsuit. Then they called us for prices on storage space. This was a strategic call that required far more than price quotes given over the phone.

To make a long story short, I made a written proposal, which I personally delivered. This contact led to a renewed communication with mall management and their out-of-state owners. We were invited to a meeting of the mall store owners held by the development company. We managed to turn our antagonistic relationship into a positive one as a result of that strategic phone call.

The point is not all calls are the same. Strategic selling--when you go after the sale by targeting specific categories of buyers with the proper message--beats the competition every time. Whether your operation is big or small, the more you know about your clients the better opportunity you have to ask, "Why not? Why can't we fill this niche?" Use your creativity to differentiate your facility from your competitors' instead of doing everything just like them.

We had a client who rented a unit in which he could sit and play his drums. Is that a niche? Yes. One you want to pursue? Probably not--some of your other clients might not appreciate it, especially if you have a state-of-the-art, high-security site. What about the guy who rents a unit in which to sit and enjoy a cigar because his wife doesn't allow him to smoke at home? Is that a niche? Does it fit your strategy? Could you segment that market and afford to go after it? I would rather pursue low-maintenance, long-leasing, well-paying commercial clients and leave that one for the competition.

There is a new business seminar (or is it a book?) being advertised with a slogan along the lines of, "It's not the big that eat the little, but rather the fast that eat the slow." This says a lot. Timing and flexibility are the sine qua non in the competitive environment in which we operate. That is why a self-storage operation needs a business and marketing strategy to differentiate it from competitors, capitalizing on its relative strengths to satisfy customer needs.

Dan Dombrosky has more than 25 years of executive-level experience as director of sales and marketing for divisions of Monsanto's Fisher Controls and Swiss multinational ABB. Responsible for more than $150 million in marketing efforts, he now specializes in consulting on selected projects from start-ups to mid-sized regional. For more information, e-mail [email protected].

Call Me!

Call Me!
Are customers slipping through the phone wires?

By Keith Ruehle

You designed the perfect ad, spent weeks negotiating with the Yellow Pages representative and, finally, the new phone book is out. Your ad is working; it's drawing calls from many prospective customers. It seems all is well, right? Not quite.

The perfect self-storage prospect is someone with the Yellow Pages opened to your ad and his hand on the phone. You could not ask for a better potential customer. Statistically speaking, he's perfect: He lives nearby, has an immediate need, can afford storage, and is taking action right now. Here's the best part: He's dialing your phone number! Life is great--but only if your manager answers his call.

The Hard Facts

Actual self-storage statistics indicate nearly one-third of the best possible prospects will never even speak with a facility's manager. How can this be? Maybe he's calling before you open or after you close. Perhaps the phone is busy. Or maybe the manager is out fixing a roll-up door and the prospect is getting the answering machine. Will he leave a message? It's not likely. Research shows only two of 10 callers will leave a message. Will he call back? Sorry. Chances are he will simply move his finger down the page to the next listing and call your competitor.

The self-storage industry is unique in that more than 90 percent of its business transactions occur over the phone. Think about it: If your phone lines were somehow down, business would temporarily come to a halt. Nothing would be more important than getting them operational again. The telephone, being the primary vehicle of customer inquiry, is the lifeblood of your business. If the phones are ringing, business is good. But given the importance of this communcation tool, it's amazing how little most business owners know about their telephone traffic.

How Much Do Lost Calls Cost You?

There are actually two types of losses. First, there is the loss of advertising costs. This is simply calculated by adding up your yearly advertising costs and multiplying by 30 percent. Far more expensive and not quite as obvious is the cost of lost opportunity. This is essentially how much money you could have made from missed prospects. The lost opportunity cost is calculated by knowing how many prospects are missed, your average closing ratio and the value of a new customer. For example:

You logged 140 new-prospect calls this month. The industry average indicates you missed three of every 10 calls, therefore, you were actually called by 200 new prospects. You missed 60 calls. Your average closing ratio is 50 percent, which means you could have converted 30 of these missed calls into paying customers. Assuming a new customer is worth approximately $500 over the length of his contract, the loss of 30 customers in a month equals the loss of $15,000. Your actual numbers will vary slightly, but between lost advertising and opportunity costs, the net result is staggering.

Prevention and Recovery

The good news is you can take some simple steps to reduce the number of lost prospect calls. There is also a creative way to recover the lost prospects themselves. First and foremost, there is nothing better than having a friendly, well-trained manager answering the phone. All self-storage businesses have times of the day when the phone rings the most. Make sure your manager is present in the office during those times when the majority of calls come in. They should always be available to answer the phone during those times.

Cordless Phones

One way to reduce missed calls is for the manager to keep a cordless phone with him at all times when he is away from the office. Some self-storage facilities are experiencing good results with the new 2.4 GHz multiline portable phones, which have a much longer range than the older 900 MHz phones. It is reported the reception is good around the yard, but degenerates inside a metal building. A good system with one handset sells for about $500. It does seem a bit expensive, but one additional customer will pay for it.

Cell Phones

For a time, cell phones seemed to be the solution. In this instance, the manager can dial a code to forward the business line to the cell phone whenever he leaves the office. The reception is good even within metal units. When the manager returns to the office, he dials another code to release the forwarding. Unfortunately, many store managers have reported the constant forwarding and un-forwarding was problematic. In many cases, unbeknownst to the manager, calls remained forwarded to the cell phone after it had been turned off.

Call Centers

If prospects receive no answer at the site, forwarding them to a call center is another option. Call centers are better than answering machines--but only if a live operator answers immediately. If the caller has to enter menu selections, you can expect as many hang-ups as with a machine. Remember the prospect has an immediate need and wants to speak with someone now. He has just heard four rings, a click, another ring, and is now required to enter a menu selection. There is a good chance he will simply call the next listing in the phone book.

Another problem identified with forwarding prospects to a call center is many managers realize they now have a backup. Over time, they answer fewer phone calls. This results in even more prospects hanging up before a live person answers. Call centers work best for after-hours callers. In this scenario, the prospect can be forwarded immediately, reducing the risk of him hanging up before speaking with a salesperson.

Caller ID

While it is always best to answer phone calls personally, some calls will inevitably be missed. The good news is there are basically two ways these lost calls can be recovered. One is automated, and the other uses a manual system. They both use a caller-ID service from the phone company.

In the manual system, the manager uses a small caller-ID display unit. He simply checks the device when he returns to the office and writes down the name, phone number and the time of the call on a form. This form then becomes the call sheet. The manager simply places a return call to each prospect and says, "Hello. This is John Doe from City Storage, and I see from my caller ID that you tried to reach us. I apologize for missing your call. Is their anything I can do for you?" When the manager is diligent making return calls, many extra rentals will result.

Automated Services

One Atlanta company offers an automated system that recovers lost calls. This service utilizes a proprietary device installed at each self-storage location. The device monitors every aspect of incoming and outgoing calls (except the conversation) and reports the information to a data center. There, the data is compiled, analyzed and merged into a number of reports, graphs and maps. These are sent to the owner on a regular basis. For example, graphs are compiled indicating when call volumes are heaviest as well as when most calls are missed. This information helps managers determine when outside activities should be performed and part-time employees scheduled.

One of the most beneficial aspects of this service is a daily report of missed calls. Each morning the site manager receives a list of calls missed during the previous day. He can then make a courtesy call to each of the prospects on the list. The service can also denote calls from existing customers and vendors. Furthermore, it can cross- reference the missed-call list with the outgoing calls made to check the manager's diligence in following up with missed prospects.

Some managers are reluctant to make return calls to missed prospects. They may feel it is intrusive or they just don't like the idea of placing them. Self-storage managers claim that when they call missed prospects back, they are generally receptive and appreciative the manager cared enough to call. According to John Bauer, manager of a Shurgard facility, "We rent an extra two to four units each month by calling prospects back. They often thank me for calling them, even the ones who don't rent."

Take Action

It is essential you implement at least some of these ideas to reduce and recover missed prospect calls. Don't let them slip through the wires. You have already paid big money in advertising dollars to get these prospects to call, so revenues from any prospects you can turn into paying customers goes directly to the bottom line.

Keith Ruehle is the vice president of the Client Discovery Service, which has provided sales, marketing and operational information for the self-storage industry for more than three years. This unique service monitors all telephone traffic to and from individual locations anywhere in the country. For more information, call 800.240.4637; e-mail [email protected].