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July 1, 2004

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Inside Self-Storage 07/2004: Records Storage Lite

Records Storage Lite

By Cary F. McGovern

Can a modest self-storage facility successfully offerrecords-storage services? Is it possible to provide a set of services thatrequires little or no additional labor? What is the value to clients and theself-storage operator when minimal services are available? Here are the facts on how records storage lite can besimple and profitable in a small or moderate-size storage facility.

Self-storage operators are faced with several dilemmas. Amongthem are market saturation, growing competition, product diversification andattracting long-term customers. In an industry with an average customer-turnoverrate of less than a year, how does a local operator stabilize his cash flow andrevenue base? Lets take a look at one possible strategy. First, let memake a couple of suppositions:

1. Business customers are good for a self-storage business.

2. Operators want to differentiate themselves from competitorswithout too much investment.

3. A facilitys turnover rate can be used as an advantage.

4. Most operators desire permanent contracts with long-termrevenue growth.

If you want to be in the records-storage industry, you shouldrecognize the value of the business customer. Businesses regularly rent space inself-storage facilities to keep their extra supplies and equipment. But inaddition to mundane inventory, all companies have to store their businessrecords somewhere. Generally, they keep them in a closet or attic until they runout of space. Records have no intrinsic value until they are needed. The problembusiness owners often have is not where tostore their records but how to find them.

So, how can you take advantage of the self-storage turnoverrate to launch a records-storage service? One of the differences between acommercial records center and a self-storage facility is customers regularlycome to the storage site. Every year, hundreds of prospects walk into aself-storage facility to rent space. Many of them represent businesses. Offering them a way to store records can be valuable to theowner and customer. It can be offered in addition to commodity storage needs oras an alternative. To shift a prospects interest to a records-storageproduct, you need a method that makes sense and works.

The Lite Model

There is a difference between the storage and management ofrecords. Records storage is passive, while records management involves activeparticipation with a clients business records. We want to make it very simpleto support records management in a self-storage environment. The litemethod operates around a minimalist framework that includes:

  • A simple selling pitch with multiplelevels of training and support. Selling records toyour own and your competitors existing business clients, over-the-countersales, telemarketing and agent sales all work. A single pitch that proves thevalue of records management can be designed to fit your operation.

  • A series of small-business packages,complete with a marketing and pricing strategy. Three or four prepackaged services that may include a specificnumber of boxes and set number of retrievals make a customers choice easy.The price is low, but the yield is very high per square foot of storage space.

  • A software-driven work cycle withlittle or no exceptions. A simple, well-defined, dailywork cycle with few exemptions will enable you to provide records managementwith no additional manpower. Exceptions are priced to discourage emergencyservices, so when you have to perform them, they are highly profitable.

  • A handful of simplified operatingpractices, including a permanent lease. Limit your services to box/file storage, retrieval, refillingand indexing (to preset standards).

  • Will-call services with an upgradeto courier delivery. Will-call means customerspick up their own records. You perform no delivery for them. You simply providethe means of locating records and validating the handoff to an authorizedemployee. This model can be easily upgraded to use an outsourced courier.

Why Provide Records Storage?

Using the lite model described here, you can garnerseveral benefits from records storage. First, the contract is long-term, some say permanent. Second,the yield per cubic foot can be extraordinarily high using the small-businesspackage model. Third, you offer a valuable service with very little new cost,one storage unit at a time.

At the end of the day, you will find the single biggestbenefit you gain from offering this service is annuity revenue you can sell atany time. Commercial records centers gladly purchase books of business fromnumerous sources. You have locked customers into long-term contracts with priceescalations and withdrawal penalties, and they are assignable and sellable at amultiple of annual revenue if you do it right. There is virtually no downside to records storage lite!

Regular columnist Cary McGovern, CRM, is the principal of FileMan RecordsManagement, which offers full-service records-management assistance forcommercial records storage startups, marketing assistance, and sales training incommercial records-management operations. For assistance in feasibilitydetermination, operational implementation or marketing support, call877.FILEMAN; e-mail [email protected]; www.fileman.com.

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