Focus On The Future
Keeping Your Facility On Track For 2010
By Elizabeth Ferrin
 It’s that time of year again, time when even the most seasoned self-storage managers sit down, evaluate their past performance, and vow to make improvements for the coming year. Without a doubt, 2009 has been a tough year for many in the industry. Some facilities reported a growing number of delinquencies, while others saw occupancies dip to new lows. Of course, a few businesses were less affected and even posted occupancy gains during this recession. Whether 2009 brought more struggles or success to your self-storage business, the new year is an excellent opportunity for all managers to clean the slate, refocus their efforts, and improve their operations for the year to come.
Making resolutions is an annual rite of passage that not only provides a good opportunity for goal setting, but also sets the stage for a series of conversations with the facility owner or supervisor. The end of the year is an excellent time to discuss past performance and set new goals and objectives for the future. This meeting often starts with a close up look at the facility’s financial data and occupancy rates. “We look at financials and budgets,” says Patt Carlson, director of operations for Farmington Hills, Mich.-based Pogoda Management Company. “This includes rental income, ancillary sales, late fees, insurance income and truck rentals, if applicable.”
Focus On Data
With the numbers in hand, it’s easy to pinpoint any weaknesses and redouble all efforts going forward. If the data shows that occupancy has been wavering, managers can focus on tracking leads and fine tuning their marketing strategies for the upcoming year. Some facilities may discover that an increasing number of customers are coming from the Internet, while others may find that word of mouth is their strongest marketing tool.
No matter the source, it’s a good idea to ensure that the self-storage facility’s best lead generation medium is being utilized to the maximum extent possible. “People don’t window shop for self-storage,” says Robert Cerrone, senior vice president of operations for Strategic Storage Holdings, LLC headquartered in Ladera Ranch, Calif. “If you rely on the Internet, the more frequently your name pops up, the better your chances are of getting a lead.”
Of course, it’s important to know what medium is working best in order to maximize the facility’s presence going forward. This is why tracking is so important. A self-storage facility’s tracking program might be very sophisticated, such as tying unique phone numbers to specific advertising campaigns and computer programs that analyze a potential customer’s Web site usage, but it can also be as simple as asking new customers where they first learned about the self-storage facility. In fact, asking what brought a new tenant to the site should be automatic for every self-storage manager. “When the manager is truly curious about the answer to the question, ‘How did you hear about us?’ from each and every caller, then they can begin to track and assess their performance,” says Linnea Appleby, president of Sarasota, Fla.-based PDQ Management, adding that the tenant’s answer to this question will help create a history of the most and least effective marketing strategies for the self-storage facility.
Focus On Marketing Costs
Once the sources driving customers to the self-storage facility are clear, managers can take the data to the next level and look at the cost per lead and the cost per tenant. For example, if the property is spending $300 on ValPak ads and receives 10 calls and three rentals from the advertising, it’s clear that the facility is spending $30 per lead and $100 per tenant for this particular marketing effort. When analyzing all marketing and advertising in a similar manner it’s easy to determine what portion of the advertising budget is posting the best results and what portion is lagging.
Managers should perform a similar cost-benefit analysis on all of their online marketing to optimize the facility’s advertising budget going forward. Cerrone is quick to point out that there is a wide variety of self-storage specific lead generation Web sites currently in operation. While some sites can be more effective than others in bringing new customers through the doors, he recommends monitoring the results to make certain that these search sites continue to be cost effective and successful in providing new leads to the self-storage business.
As a word of caution, facilities that rely heavily on the Internet for leads need to constantly present their best online. With this in mind, it’s important to evaluate the self-storage business’ Web site to ensure it sends the right message to potential clients. If the pictures online are blurry or less impressive than the real-life facility, consider replacing the photos with better quality shots of the interior and exterior of the property. In addition, take the time to read through and edit the Web site to ensure that everything is easy to follow and understand—especially for a potential customer who may be new to the self-storage concept.
Once the Web site is optimized, managers can turn their attention to instituting a program of recording the numbers of inquiries that managers successfully sign as tenants. “Closing ratios are a really big item,” says Appleby. “Focusing on understanding how many leads managers are converting to a close can make a huge difference in the number of rentals at a site.”
Resolution Solutions:
Cost Cutting Tips And Tricks
If expenses are constantly creeping up at your self-storage facility, Robert Cerrone of Strategic Storage Holdings, LLC, has a few suggestions for cutting costs and boosting your bottom line:
- Negotiate all outsourced contracts
in advance. Take advantage
of any prepayment discounts offered by vendors.
- Approach service providers during their off-season when preparing to renegotiate a contract. Call for quotes on items like lawn service during the winter months when business is slow and suppliers are hungry for work.
- Terminate any advertising plans that are not bringing new customers
into the self-storage facility.
- Be efficient with office supplies. It’s OK to reuse that paperclip!
- Be aware of the amount of cleaning supplies you are using everyday.
- Be energy conscious. Turn off lights when you leave the room and set the office thermostat to a comfortable
but reasonable level.
- Check your property’s tax assessmentsand compare your rate with nearby self-storage facilities. If you’re paying more, take steps to equalize the rates.
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Focus On Goals
Appleby is quick to point out that these ratios make goal setting significantly easier. For example, those who closed an average of six out of 10 inquires in 2009 may want to set a goal of eight out of 10 for 2010. This alone would provide 24 more rentals than last year. Adding a dollar figure to the rentals gives thesenumbers even more impact. If the average tenant stays 10 months and pays $100 per month, those additional renters will bring in an extra $24,000 of income for the new year. “That’s pretty big,” she says.
It’s important to take the closing ratio a step further and use the numbers to help create weekly or monthly goals. Over time, as average ratios become clearer, managers can set out to improve on this number. “Managers should make it a personal goal to have a better closing ratio than last month,” says Appleby. “They need to understand that closing ratios are not a perfect science. They will never be 100 percent correct, but the number is critical.”
Improving sales ability is an excellent goal for the year ahead. As anyone in the self-storage industry knows, the ability to convert a potential customer into a tenant is one of the most crucial skills a manager can possess. “The manager should always work from a position of consultative sales,” says Cerrone. “They should help customers envision the service and how they are going to use it to fit their needs.”
The best managers are always committed to helping renters maximize their storage dollar by educating them on how to best store their specific items. For instance, if they need to store some household goods along with a few pieces of fine furniture, the manager might suggest that the client rent two small units, a traditional unit for the household items and a climate-controlled space for the furniture, in order to save on rent costs for the customer. Role playing and role modeling will go a long way in polishing these important sales skills.
Focus On Phone Calls
Since many potential customers will call the self-storage facility before coming in to rent a space, phone skills are vital to the success of both the business and the manager. Today, many sites are equipped with technology that records all phone calls coming into the facility. While it is common for owners and supervisors to monitor these phone calls, managers themselves can learn quite a bit from listening in on their own recorded conversations with potential customers. This exercise is especially helpful when the supervisor or another skilled manager is nearby and ready to answer questions or offer suggestions for improving phone skills going forward into the coming year.
Referral programs can also help boost occupancy rates in 2010. “We really try to promote our referral program,” says Appleby. “It’s something ratios are a really big item,” says Appleby. “Focusing on understanding how many leads managers are converting to a close can make a huge difference in the number of rentals at a site.”
Focus On Goals
Appleby is quick to point out that these ratios make goal setting significantly easier. For example, those who closed an average of six out of 10 inquires in 2009 may want to set a goal of eight out of 10 for 2010. This alone would provide 24 more rentals than last year. Adding a dollar figure to the rentals gives these numbers even more impact. If the average tenant stays 10 months and pays $100 per month, those additional renters will bring in an extra $24,000 of income for the new year. “That’s pretty big,” she says.
It’s important to take the closing ratio a step further and use the numbers to help create weekly or monthly goals. Over time, as average ratios become clearer, managers can set out to improve on this number. “Managers should make it a personal goal to have a better closing ratio than last month,” says Appleby. “They need to understand that closing ratios are not a perfect science. They will never be 100 percent correct, but the number is critical.”
Improving sales ability is an excellent goal for the year ahead. As anyone in the self-storage industry knows, the ability to convert a potential customer into a tenant is one of the most crucial skills a manager can possess. “The manager should always work from a position of consultative sales,” says Cerrone. “They should help customers envision the service and how they are going to use it to fit their needs.”
The best managers are always committed to helping renters maximize their storage dollar by educating them on how to best store their specific items. For instance, if they need to store some household goods along with a few pieces of fine furniture, the manager might suggest that the client rent two small units, a traditional unit for the household items and a climate-controlled space for the furniture, in order to save on rent costs for the customer. Role playing and role modeling will go a long way in polishing these important sales skills.
Focus On Phone Calls
Since many potential customers will call the self-storage facility before coming in to rent a space, phone skills are vital to the success of both the business and the manager. Today, many sites are equipped with technology that records all phone calls coming into the facility. While it is common for owners and supervisors to monitor these phone calls, managers themselves can learn quite a bit from listening in on their own recorded conversations with potential customers. This exercise is especially helpful when the supervisor or another skilled manager is nearby and ready to answer questions or offer suggestions for improving phone skills going forward into the coming year.
Referral programs can also help boost occupancy rates in 2010. “We really try to promote our referral program,” says Appleby. “It’s something that we feel is the best use of that sound byte time that we have with each new person we talk to.”
She goes on to explain that it’s the manager’s responsibility to spread the word about the referral plan. “I try to encourage our managers to tell every person they talk to in the day about the program—the mailman, the UPS™ driver, tenants, new leads, even the guy who poked his head in looking for directions,” says Appleby. “A referral program is your least expensive and most effective lead source in this economy and that’s what we need most.”
Along the same lines, increasing a facility’s occupancy numbers for the new year should involve looking for creative sources to get the word out about their self-storage facilities. Reaching out to the community is always effective; managers who get involved in as many civic organizations and business groups as possible are most likely to succeed in spreading their facility’s message. Managers should also remember to carry business cards at all times and hand them out to any new people they meet during the day.
Focus On Cost Containment
Containing costs should always be in the forefront when looking for creative ideas to improve a self-storage facility’s operations in 2010. With the current state of the economy, people are keeping a close watch on their nickels and dimes—and self-storage professionals should definitely be following suit. There are opportunities at almost every facility for small cuts that can yield savings with relatively no impact on the customer’s storage experience. Start with easy solutions, like curtailing freebees such as coffee mugs and key chains to help contain costs.
Managers may also play a role in controlling some of the big expenses at the site. “Look at the larger expenses on the profit and loss statement,” says Cerrone. “In 2008, we reduced our insurance costs by 40 percent.” He quickly adds that other self-storage facilities may be able to find similar, large cost savings with a careful review of all of the site’s expenditures.
A common resolution industry wide is to increase retail sales for the new year. At first glance, this may seem like a lofty goal, but breaking it down into smaller steps can make it feel much more manageable. “We have daily goals for our stores,” says Carlson. “We’ve found it effective because it’s a completely different mindset. It’s a lot easier to tell a store manager you need to sell $30 a day in sundries than $1,000 per month. Daily goals are something store managers can grasp and get a handle on. Daily goals are attainable.”
To maximize sales of retail products and other services, like insurance and truck rentals, they need to be offered to any new customers automatically at the time of rental. In fact, managers should be in the habit of mentioning boxes and moving supplies at the end of every conversation they are involved in throughout the business day. “We want to provide our customers with a high level of convenience,” says Cerrone. “These services support our rentals and make it possible to have a one-stop shop for customers.” Showcasing products in a clean and organized retail area can go a long way in improving ancillary sales, as well.
With clear goals for the year to come, self-storage managers can forge a plan to improve their business operations and make 2010 more profitable and successful than the previous year. Of course, larger, longer-term goals are always welcome on a resolution list, too. Determining to love life and enjoy the job can be both professionally and personally rewarding. Resolving to find a little more joy in the work and take every opportunity to learn and grow will also help both the manager and the self-storage facility stay focused on the future and primed for success in 2010 and all the years to follow.
Elizabeth Ferrin is a freelance writer based in Maple Grove, Minnesota. She is also a frequent contributor to the Mini-Storage Messenger, Mobile Self-Storage Magazine, Self-Storage Now!, and RV & Boat Storage Today.
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