Not all self storage facilities are created equally

No two businesses are the same – especially nowadays, as companies adapt to a changing marketplace & become more creative with their offerings in an attempt to “stand out from the crowd”.

With this in mind, it’s important to make sure your prospects (potential customers) understand your points of difference. After all, if they’re shopping purely on price, the more expensive facilities probably won’t even make it onto the list! If that’s you, then it’s time to give prospects a reason to choose you! Let’s take a look…

Self Storage facilities are different?
We work in the industry, so we know this – but do your prospects? If they’ve only ever seen self storage on TV (and it’s a bunch of rusting shipping containers on a block of land with a chain-link fence around it), then that’s what they’ll assume it is. If they get your quote and it’s substantially more expensive than your competition, they may not stop to ask why.

To continue reading this article please see: http://storman.com/blog/not-all-self-storage-facilities-are-created-equally/

The Importance of Follow Up

Following up leads (sales enquiries) is one of those self storage tasks that often gets left to the bottom of the ‘to-do list’. It takes time and some of your staff may not feel comfortable calling back out of the blue – but it’s also one of the most important aspects of the sales process; now-so more than ever.

In today’s fast-paced online world, people expect answers quickly – if not immediately. If we look at the average* storer, they generally…

– start making enquiries 1 month prior to requiring storage (35%)
– find their storage facility online (51%)
– do so using a Google search (75%)
– contact facilities of interest by telephone (51%)
– expect to see unit availability and pricing online (75%)

See more at: http://storman.com/blog/the-importance-of-follow-up/?src=ssaablog

By Andy Pudmenzky (Customer Experience & Marketing Manager, StorMan Software)

The Flaws of Leasing Self Storage Premises

Self storage is a capital intensive and location sensitive business. The globally preferred modus operandi is to acquire and own the real estate that the business occupies. This has proven to be the successful and enduring MO for a number of reasons.

Having debated this idea for many years with people who firmly believe leasing storage premises is the ‘new way’ or superior to the classical self storage investment strategy, I remain amused that it persists. It is apparent my arguments are not convincing enough.

The temptation for a self storage operator to lease a self storage property often come with the arguments that:
a) The accountants say a business shouldn’t have such a ‘lazy balance sheet’ holding so much capital in real estate;
b) There is a scarcity of property to be acquired, so leasing is the only way to grow; or
c) The operator lacks the capital to acquire so leasing helps fund the real estate.

In my observations of the self storage industry in more than 2 decades, leasing self storage property has almost always accompanied an impatience of the operator who wishes to grow quickly. These ambitious players hope to assert themselves in the industry quickly.

In the 1990’s, Global Self Storage entered the market and through leasing expanded to 17 locations in only a few years before collapsing.

Other small players have entered on a leasehold basis but haven’t been able to really move ahead.

In 2003, APN created a retail investment product to enable National Storage to sell and lease-back its properties. In a later twist National re-acquired many of those same assets to make them again a more classical self storage owner-operator, but retaining and operating on a leasehold basis in other circumstances.

The largest and most successful self storage operators in the world own their real estate.

In Asia, securing freehold is very difficult and expensive. Leasing for self storage operators is common, but remains riddled with problems. Leases are short (3 years is typical in Hong Kong) and land owners are keen to ensure their returns are optimised. This commonly forces self storage operators to close or relocate.

Long leases are common in the UK, and the law provides for a somewhat sympathetic rent review and lease renewal. However, major storage operators prefer to acquire freehold.

There are a number of flaws with leasing self storage premises:
1) Risk of forced relocation – Australian landlords typically only offer short-term leases. A landlord committing for longer than 10 or 15 years is unusual. (In Hong Kong, getting a lease longer than 3 years is unusual). This means the substantial capital investment to fit out must be written off in the lease term. The business should also prepare to start-up again in a new location when the lease expires, along with the requisite capital investment and rent-up.

2) Risk of an unfavourable market rent review – Leases will re-set the rental to market every few years. A significant market based rental increase may not match the income position of the self storage business at that time, and possibly causing operating losses. This may force relocation and re-starting the business. Problematically, an alternative location may not be available in the area.

In addition, self storage customers do not like being moved. The practical challenge of undertaking the moving of 500, 600 or more of people’s personal effects is not to be underestimated. It takes many months and comes at quite a cost while also losing a significant proportion of the customers.

All this means, the business may have to choose to simply close down, or absorb losses until the income eventually recovers.

3) Leasing constrains capital investment, upgrades and improvements – as the lease expiry approaches, the storage operator will resist undertaking the necessary upgrades and enhancements to keep the business relevant and competitive. Expanding, upgrading and basic maintenance will be deferred until new lease certainty is reached. The tiredness and deteriorating condition can be observed in many leasehold self storage businesses.

In addition, there is a constant wave of up-zoning. Governments around the world are increasing density and changing the zoning uses to enable more productivity from existing real estate. Self storage operators need to keep up and increase their density. If an operator leases the property, the owner will eventually want to crystallise this value.

There is no escaping that self storage is capital intensive and location sensitive. Acquiring and owning the real estate addresses the property cost, giving the operator fixed expenditure for the property it occupies. Importantly also, it enables the flexibility to adjust the service, scale and product offer at any time. Enduring successful self storage businesses own their real estate.

By Sam Kennard

Sam joined the Family Self Storage Business in 1991. He was appointed Managing Director in late 1994. In that time Kennards Self Storage has grown from 8 locations to over 80 today. The company is an active and specialised developer of property, focussing on expanding the Kennards Self Storage portfolio in Australia and New Zealand. Today, Kennards Self Storage is the market leading Self Storage Brand and industry innovator and employs over 230 people in Australia and New Zealand. The company remains a privately owned and family run business.
For more blogs by Sam visit: www.kss.com.au/kblog

Not all Self Storage Facilities are created equally

No two businesses are the same – especially nowadays, as companies adapt to a changing marketplace & become more creative with their offerings in an attempt to “stand out from the crowd”. With this in mind, it’s important to make sure your prospects (potential customers) understand your points of difference. After all, if they’re shopping purely on price, the more-expensive facilities probably won’t even make it onto the list! If that’s you, then it’s time to give prospects a reason to choose you! Let’s take a look…

Self Storage facilities are different?

We work in the industry, so we know this – but do your prospects? If they’ve only ever seen self storage on TV (and it’s a bunch of rusting shipping containers on a block of land with a chain-link fence around it), then that’s what they’ll assume it is. If they get your quote and it’s substantially more expensive than your competition, they may not stop to ask why.

Your facility may be at the opposite end of the quality scale – but if your prospects don’t know this, then you may not even get considered as an option – even if you’re genuinely worth it.

Some examples of points of difference may include:

  • Price
  • Ease of access
  • Covered driveways
  • Range of unit sizes available
  • Location
  • Size of goods lift (small lifts mean many trips – especially for removalists, who usually charge by the hour)
  • Security offerings (PINs, individually alarmed units, on-site manager, cameras, guard dogs, CCTV, etc)
  • Customer testimonials, your Google reviews or your Google star-rating

Our goal here is to make sure your prospects understand that not all self storage facilities are equal… so how do you make sure your prospects are comparing apples with apples? Easy – start with the bananas.

Discover your Points of Difference

The first step to finding out where you stand is to mystery-shop your competition. Ask a friend or colleague (someone they won’t recognise) to visit a competitors facility and find out a little more about their offering. More importantly, find out where they excel, where you excel and what tactics they’re using to sell against you.

The traditional rent increase method creates a lot of work

 

If your competition runs a facility like this, you may never be able to compete on price – but you could certainly compete on looks & security!

From this information, we can create two lists (frequent readers will know that I love lists) and begin to ascertain our businesses strengths and weaknesses.

Here’s how it works:

  1. Start by writing down everything that both you and your competition offer. This is the POP (Points of Parity) list. It’s basically a list of things that you can’t compete on, because you’re both the same in this respect. These are your apples.
  2. Secondly, write a POD (Points of Difference) list. This is a list of areas where your business excels in comparison to the competition. These are your bananas! It’s these exact reasons that you need to highlight when you’re talking to potential customers.
  3. Finally, you may wish to create a POD (Points of Difference) list for your competition too – this is made easier if you’ve visited them and seen their offering first hand. It’s this list that you’ll need to have “ammunition” ready for, because your competitors are likely using these against you.

Give customers a reason to choose you

Now that you’ve worked out your facility strengths and weaknesses, it’s time to weave these into your sales process! Highlight your PODs in your sales spiel, on your website and in your marketing materials.

The traditional rent increase method creates a lot of work

 

Find your Points of Difference and use these to stand out from the crowd.

 
Develop some strategies in dealing with your competitors PODs, too – it can be something as simple as helping a colleague come up with something to say in response, if a prospect says something like “I understand you don’t have undercover areas in all of your facility, is that right?” – to which you might reply: “That is true, but all of our access corridors lead to an undercover area where you can park your car to unload, so you & your goods will be dry while you’re putting them into storage”.

Turning negatives into positives

If analysing your competition has revealed a series of weaknesses in your business, spend some time working out how to make changes or improvements. You may also be able to turn a negative into a positive, as per some of these examples:

  • They have 24/7 access, we don’t: Turn this into a positive by selling the benefits of a daytime-only facility. “Do you really want strangers roaming around at night time when there’s no one here?” – or evaluate the storers requirements on a case-by-case basis.
  • They have a move-in truck, we don’t: “We’ve decided not to have a move-in truck, in order to keep costs down for our customers. We do, however, have a trailer that you can use for free during move-in… and if you did need a truck, we have a deal with XYZ hire company for 20% off van & truck rentals.”

Further reading…

If you come across a customer that isn’t sold on storage (in order words, they’ve called to inquire about pricing but they think storage in general is too expensive), you might like to direct them to my other blog post, “7 reasons why Self Storage is a good idea“.

Additionally, you might also like to learn a few new ways to stand out from the competition, by being appealing to your customers. Happy selling!

Regards,
Andy (Customer Experience & Marketing Manager, StorMan Software)

David vs Goliath: The challenges of marketing a stand alone brand against the big boys

Is marketing a stand-alone facility in the era of large players impossible and too costly?

It doesn’t have to be!

Since the internet era, marketing has become a lot more accessible to small players, and a lot easier to track.  Think back to the dark ages of Yellow Pages, when the shiny shoed, gold toothed salesman knocked on your door, knowing that you couldn’t afford NOT to buy his ¼ page advert for the amazing yellow book that cost more than you were paying your manager for the year.

Then you sat in the office and waited for the phone to ring, hoping desperately that you could start to fill those storage units that were hastily getting built at great expense to you.

The modern era has seen the advent of many great advertising tools such as websites and Google AdWords that level the playing field.

But what are the most important things in marketing a small business?

  1. A brand. A catchy bold name and an equally bold Logo and colour scheme.  This is important to get right early, as this will carry through your marketing for years to come.  Some people might only see your logo once a year, but when they need storage you want them to remember something about your brand that make them call you, before your competitor. It might be something as little as the shape and colour of your logo!
  1. A plan. Self storage advertising is a little challenging as generally people only seek out your product when they need it. If you offered a 4×3 unit at an unbeatable price for June, you wouldn’t find many customers store a house-load of furniture because they love a bargain!

Self storage marketing is all about being in the right place, when customer DO come looking.

That means,

YOU NEED A WEBSITE! And a good one! Not one built by a mate for a cheap price! it needs to reflect your logo, your colours, and most importantly your business. Fill it with content such as videos, pictures, helpful hints, payment features, booking links.

– You need to be on Google, as close to the top as you can for the suburbs where your customers are coming from. Set realistic goals such as top 3 for ‘storage Croydon’ and ‘Storage Ringwood’.  Don’t waste your money trying to get top 3 for ‘Self Storage’.

– It is possible to set up Google AdWords yourself, but Googles algorithms are a complex and ever changing beast and having a specialist set up your account can save you a fortune in the long term.  Use a SSAA service member as they know our industry inside out!

  1. Local focus. This is where you have the advantage over the big players. Get involved with the sporting clubs, the Chamber of Commerce, the church. Chat to the local school about whether you can let them park their minibus in your carpark in exchange for a sign on their fence?

If you live locally, signwriting your car means it gets seen by hundreds of locals every day. Park it on the main road, and walk the extra 200 metres to work. Park it at the Gym, the pool…..let it be your best conversion tool! 

  1. Be the innovator. New technologies are coming out all the time. New apps are getting popular all over the world before they come here. Be there first.

Be on Yelp, advertise on gumtree, sell boxes on eBay, and upload videos to YouTube, Instagram, and Vimeo.

On some of your advertising, try a slogan that is funny or thought provoking.  You will be surprised how many people walk in the door because they like your quirky ads!

Arm Wrestling

  1. Social media. Have a Facebook page for the business.  Fill it with customer stories, packing hints, removal recommendations, and if you have something funny to share, share it! Make a video about your small business as this will personalise the business to people who have never dealt with you. There is nothing better than a complete stranger walking into your facility and already knowing your managers name!
  1. Deliver The Product Well. Once the customer arrives on your doorstep, make storing their stuff a pleasure, walk them to the unit, show them where everything is, take trolleys to the removalist, offer a drink, have a chat.  This way, they tell their friends.  After all, word of mouth and repeat custom is the cheapest form of advertising you will ever do.  And for business customers, it’s the gift that keeps on giving as they tell their customers, suppliers and friends. This is the way that you can differentiate your facility from your competitor who has a staff member on minimum wage behind the counter, who has no interest in building the business. 

So in summary, you can play with the big boys in the big sandpit!

Why not get along to the next Self storage Association regional meeting or Conference and chat to the hundred other business owners just like you who will be happy to share what does and doesn’t work for them.  Change seats in each session so you are chatting to new people with new ideas and new perspectives.  If you haven’t been to a conference or meeting, you will be surprised at how open your competitors are about sharing their marketing hits and misses.

Discounts Done Right: 5 Tips on How to Win the Price War

Let’s take a look…What is a Discount?Before we go on, we need to get our head around what a discount actually is. According to Google, a discount is “a deduction from the usual cost of something.” From this, we can see that for a storage facility or marina, a discount is a deduction off the monthly rental.

It’s important to remember that a discount is NOT a giveaway.

A giveaway is defined as “a thing that is given free, often for promotional purposes.” This can be anything from a month’s free rental to free merchandise. Often, many people confuse these two things and this skews their discounting as a result.

What kind of discount should I offer?

Now that we know what a discount is, we can look at how to offer one. That is, of course, if we need to offer one at all!  Too often, I see people give away money that could otherwise be theirs just because they think they need to discount. In order to seek the answer to the discounting question, you need to look at what “phase of your business life” your business is in.

Ask yourself this: Which phase is your business in?

  • Startup mode (1 – 6 months of opening)
  • Build-up stage (6 months – 18 months)
  • Maturity (18+ months)

Discounts Done Right: 5 Tips on How to Win the Price War...

The discounting rules are different for each phase – so understanding this at the outset is very important.

Typically, if your business is in Startup mode phase then cash flow is king! By this I mean that you should be looking at doing any type of reasonable discount to attract business. At the end of the day, you need to realise that you have an empty facility or marina and you need customers who will be the foundation of your Rent Roll. Typically these discounts will have a large financial incentive tied to them.

If your business is in the Build-up stage phase, then the discounting plans should revolve around maintaining your customer base and increasing your market awareness of the storage facility or marina. The discounts at this point would not be as dramatic or as long term as Phase 1 discounts and will be attractive to those customers who are looking for longer terms of rental or specific features of your site i.e. Haul-out facilities for marinas or longer access hours for storage.

If your business is in the Maturity phase (or is classed as mature; generally over 80% occupied), then the discount structures should reflect this. Discounts should be smaller, short-term incentives that briefly impact the bottom line but allow for a small percentage of your customer base to refer other people as potential customers and gain a small financial recognition for doing so. Continue reading via the Discounting Whitepaper (scroll to the bottom of the page to download a copy).

Regards,
Ben (International Sales Manager, StorMan Software).

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