Let’s take a walk down memory lane. The year is 2000 and the Internet is still a toddler. Self-storage management software is DOS-based; Yellow Pages advertisements are the way to bring in new customers; the BlackBerry is the “smarter” phone; social media is just an idea on a white board; Google is two-year-old private company; and the music industry is just starting to realize the problem with digital-music piracy.
Fast forward 18 years and the world is a very different place. Yellow Pages have been replaced with online marketing; management software can do everything but make you a cup of coffee; and in-person communication has been replaced with Instagram, Snapchat and text messaging. Automation is the rage, encompassing everything from driving to ordering pizza. In self-storage, smartphones can now open access gates, kiosks can assist customers with renting units, and so much more.
The influence of technology on our industry has been significant. If you’re an operator or investor, the shift has given you the ability to generate large amounts of useful business data. Technology not only helps you collect data, but to analyze it as well. Let’s see how.
To collect data, we need technology that’s accurate and easy to use. To begin, every storage facility should have a basic computer setup as well as Internet access, e-mail, management software, a spreadsheet software such as Excel or Google Sheets, online banking access, and an accounting program like QuickBooks. This is the minimum that should be considered. Working together, these systems will provide you with the basic information you need to make data-driven decisions.
However, in today’s business environment, the essentials are no longer enough. Yes, you can make accurate decisions with this intel and you’ll be ahead of a competitor who lacks even simple systems, but this data is only part of the story. What we need to know in 2018 is every piece of information available on our potential, current and past customers, and how they interact with our business. For prospects, this includes:
- Contact information
- The name of the manager who interacted with them
- Which marketing campaign drove them to the facility
- How they contacted the facility
- What size unit they need
- If they’ve already received a quote
For current customers, you need the same things, plus:
- Why did they choose your property?
- What kind of ancillary items did they purchase?
- Did they receive a discount or move-in special?
- Is the rental rate above, below or at street rate?
For past customers, you should also know:
- How long they stayed
- Which manager moved out the customer
- Why the customer left
Depending on how much time you have or the investment you’re willing to make, you can collect this information in several ways:
Manual. This type of collection involves entering the information manually into a spreadsheet from your management software. (Sometimes you can export the information from the software into a spreadsheet.) Then you can calculate the numbers you need. The disadvantages to this method are the amount of time it takes, human error, and the fact that not all management software provides the same data.
Semi-automated. You could semi-automate your system and use an online form from a software package such as Google Forms, which can be customized with specific questions to collect the information you need. Once a form is complete, the information is automatically downloaded into a spreadsheet for review; but you still have to make your own calculations.
Fully automated. The ideal way to collect tenant information is to use customer relationship management (CRM) software, for example, a program like SalesForce. With this software, you can program the information you’d like to collect, and then use either internal reporting functions or a separate program through the CRM’s application-programming interface to customize the data you’d like to view.
If you find your analytical results are unfavorable, you have the means to improve them. Like a doctor or auto mechanic, a self-storage operator will find the quality of his data directly correlates to how well he identifies problems. The better the information he collects, the easier it is to make a diagnosis and attribute facility performance to specific causes.
Here’s an example: Let’s assume your facility has two managers and their goal is to gain 25 new rentals this month. At the end of the month, your data shows your marketing campaigns drove 38 potential customers to your facility and you had 22 new rentals. The facility missed its goal, but why?
You dive deeper and see that Manager A rented to 15 of 19 potential customers for a closing percentage of 79 percent. Manager B rented to 10 of 19 potential customers for a closing percentage of 37 percent. Why was Manager B’s percentage so low? Does he need additional training or have a personal issue that’s affecting his performance?
Upon closer examination, you discover Manager B had more customers who requested 10-by-20 units and your facility has been out of this size for the last two months. Without this data, you might have missed the reason behind his lower close ratio. Plus, you’re now armed with new information about unit-size demand for your property and can revisit your revenue-management plan.
If your marketing campaign only drove 22 potential customers to your site, you’d have a different problem. Even if your managers rented a unit to 100 percent of these prospects, you’d still fall short of your goal of 25 new rentals per month. In this case, you’d need to take closer look at the design and execution of your marketing campaign and find out why it’s not bringing new customers to your door.
The ability to apply technology to the collection and analysis of data is imperative for every self-storage operation. It can help us bridge the gap between the general information we’ve always used and the specific data needed to make informed decisions. You must invest time and resources into these systems. If you don’t, your facility will have a competitive disadvantage—or worse, it may have a financial weakness. As economist Edgar Fiedler once said, “He who lives by the crystal ball soon learns to eat ground glass.”
Matthew Van Horn is co-founder of 3 Mile Domination Self Storage Services, a full-service operations company specializing in self-storage management, marketing and consulting. He’s also co-author of “Self Storage Domination.” To speak with him about your self-storage operations, schedule a free 30-minute strategy session at www.3miledomination.com.