Construction Corner is a Q&A column committed to answering reader-submitted questions regarding construction and development. Inquiries may be sent to [email protected].

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The fire department is requiring me to put a Knox Box on the outside of each of my gates. What are they and why do I need them?
WILBUR IN CHANTILLY, VA.

A Knox Box is a key switch or box that is usually mounted to the entrance keypad, fencing or wall of a facility gate and is used in case of an emergency at your site. The fire department, not having a gate code or key to your entry gate, uses these boxes to gain entry.

The key-switch variation is nothing more than a bypass wire to your gate motor. The fire-department personnel uses a special key that works with all Knox Boxes to open the gate. Sometimes it is just an empty box, similar to what realtors use, which holds a key to a padlocked gate. These are usually only used at facilities that do not have keypad-controlled access.

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I am building my third site and always seem to have a problem with coordinating the low-voltage contractors (fire alarms, security, etc). Often, conduit is left out and needs to be shared, which has caused problems in the past. What do you recommend to prevent things like that from happening?
WAYNE IN COTTONWOOD, ARIZ.

Make sure all low-voltage wiring is included in the architects blueprints. Have each of your low-voltage vendors supply a CAD or plan page for the architect to include in the bid plans. This ensures the electricians and other contractors properly plan for the right amount of conduit, electrical outlets and junction boxes. Do not wait until the last minute to call your low-voltage vendors.

Tony Gardner is a licensed contractor and installation manager for QuikStor, a provider of self-storage security and software since 1987. For more information, visit www.quikstor.com.

Throughout the month of November and December, the storage facilty at the end of my street displayed the following message on its changeable frontage sign: Hide those holiday gifts with us! Half off December rent. This was good. What was better was the change in sign for January: Out with the old, in with the new? Dont throw it away! Store it with us! Now thats marketing.

Our January issue has traditionally included our State of the Industry Report, in which we interview 10 to 15 of the biggest players in self-storage, and ask them to summarize their observations of the current market as well as make predictions for the upcoming year. Its lack in this years edition is not an oversight; neither should it be construed to mean this feature is extraneous or unattainable. It is quite simply that after years of supplying alternate versions on a similar theme, it seemed more useful to tell readers what to do about the state of the industry rather than recapitulate it.

What we know about the condition of self-storage is there is increasing rivalry over market share and suitable sites. The product becomes sophisticated as facilities encroach upon residential over industrial areas, but also as consumer requirements grow more refined and diverse. Operators ferret out inventive ways of attracting prospects, securing their business, and extracting information on how to keep them satisfied. And developers exploreand attemptinternational progress more than ever before.

In October, we discussed ancillary products and servicessuch as wine, records, mobile and vehicle storage, as well as truck rental, shipping services and the sale of retail products as ways for facilities to remain competitive and increase revenue. But not all operators have the means or inclination to provide these offerings, nor should they necessarily need them all the time in every locale. This issue addresses the least every facility needs to be public, prepared and profitable.

Were talking about advertising, marketing and promotions; and thats a jungle of confusion for many managers who have no training in these areas. Theres more to publicity than a Yellow Pages ad, but with the glut of advertising options provided through technology and human innovation, how do you know what works? What gives the best return on marketing dollars? To which approaches do consumers best respond?

The articles you are about to read will help you decide on a marketing budget; plan special events to draw prospects; and rival even the most savvy competitor. Yes, clever signage, such as the example cited above, can be part of that super strategy. So heres a sign for you: Lost in the marketing maze? Read this issue of Inside Self-Storage! (Shameless, I know. But it had to be done.)

Happy holiday wishes to all,

Teri L. Lanza
Editorial Director
[email protected]

As we begin the new year, our roundtable of real estate experts discusses the national self-storage market. Lets hear what they have to say about their respective cities and regions. Joining us in our survey this month are: C. William Barnhill, Omega Properties, Mobile, Ala.; Clifford Crowe, Lee & Associates, Carlsbad, Calif.; Dale Eisenman, Midcoast Properties Inc., Hilton Head Island, S.C.; Larry Hayes, Larry Hayes & Associates, Missoula, Mont.; Richard Minker, Richard D. Minker Co., Fort Worth, Texas; and Joseph Mendola, The Norwood Group, Bedford, N.H. I will also contribute some comments on the national marketplace.

DESCRIBE HOW YOU SEE THE RECENT CAP-RATE TRENDS IN THE SELF-STORAGE INDUSTRY. DO YOU SEE CAP RATES CONTINUING TO MOVE UP? HOW FAR DO YOU THINK THEY WILL GO?

Barnhill: It is obvious cap rates have been trending downward due to combined pressure of property demand and low interest rates. Because cap and interest rates are sensitive, it is unlikely cap rates will vary substantially until interest rates significantly rise. The status of the economic recovery will ultimately be what drives the increase in cap rates. It is unlikely we will see them exceed the 10 to 10.5 range in the immediate future.

Crowe: There is a big rush of investors in California trying to move the equities from other property types that have lower yields (for example, apartments in the 6 percent cap range) to storage properties. Where the cap rates were 9 percent to 9.5 percent last year, they are now nearly one point lower due to high demand. The storageproperty owners are holding, creating a further move to find development sites. These, too, are in short supply. With the huge move, in due time, the pendulum will eventually tilt to over supply, but not today.

Eisenman: I think they are fairly stable. No, I dont think they are moving up.

Hayes: Cap rates are moving down or stabilizing, not going up. As interest rates increase, there should be a corresponding upward movement of cap rates. Unfortunately, there will probably be a lag, creating a time when buyers will refuse to purchase until the upward adjustment is real.

Mendola: Cap rates should remain relatively low, in the 9.5 percent range, for properties that are not in the all-cash category. As long as investors can achieve a 10 percent cash-on-cash return going in and the mortgage constant is under 10 percent, sellers and buyers should benefit from this positive interest-rate market.

Minker: We are finding the use of cap rates as a guide, since each buyer makes his own adjustments and has his own interpretation of the net operating income (NOI) to which to apply his cap rate. Therefore, while one investor may arguably be paying a 9.5 percent cap, another could only be paying a 10 percent cap at the same price because the NOI is different. With that said, we are seeing better quality properties selling at a sub-10 cap rate, while older properties are in the 10.5 to 11.5 percent range.

As others have noted, these are truly remarkable and historic times in self-storage for cap ratesremarkable, but are they sustainable?

IS THERE MORE OR LESS 1031 MONEY IN THE MARKETPLACE? THERE SEEMS TO BE QUITE A BIT. DO YOU SEE THIS CHANGING? IF SO, WHY?

Barnhill: Although the capital-gains tax rate has been lowered to 15 percent, investors still are inclined to defer whatever tax they can with 1031 exchanges. Some, however, elect to pay the tax and reinvest. There is a substantial benefit to starting with a new tax basis, due to the benefits available through cost segregation and the 50 percent bonus depreciation available to new property with a depreciable life shorter than 20 years.

Crowe: In California, there is an abundance of 1031 money waiting for replacement property.

Eisenman: Possibly, as interest rates rise, there may be fewer sellers of other product types, generating less exchange money. Also, if alternative investments look attractive (securities, other real estate product types), they may move money away from self-storage.

Hayes: There has been a glut of 1031 money in relation to available properties for reinvestment. Many people are making the decision not to sell because they are concerned about finding replacement properties.

Mendola: There seems to be plenty of 1031 money looking for a home in self-storage. Investors realize there is a sunset provision to the Bush 15 percent tax on capital gains. Also, the gain on the recapture portion of the increase is still at 25 percent. There are a lot of savings to be had with a 1031 exchange.

Minker: There appears to be more 1031 money in the market as investors of all kinds of real estate try to maximize gains in existing properties and seek different types of investment products to purchase in a somewhat favorable financing market. They are of the mindset that higher interest rates could make future sales/purchases more difficult.

At the same time, with capital gains rates at low levels, should an investor not find a replacement property, the tax burden wont be as great as it was in the past.

Barnhill makes some very subtle and valuable observations on paying the tax. I think running the math against the new depreciation laws may yield a surprising answer.

WHAT WERE SELF-STORAGE RENTAL RATES AND OCCUPANCIES LIKE IN 2003? HOW DO YOU SEE THIS CHANGING IN 2004?

Barnhill: Rental rates have been fairly stable in our area, but we still are seeing cost incentives available. Overall, occupancies should remain stable in our region during 2004.

Crowe: The rates in California range from $1 to 1.60 per square foot, with occupancies averaging in the 90-plus percent range. There are some pockets that are different, but the market should be strong in 2004.

Eisenman: It varies by market but, generally, occupancy was high. I cannot predict, but we may see occupancy rates decline unless the economy improves.

Hayes: Rental rates and occupancy have remained stable with only a few rental increases. New facilities coming on the market will absorb most of the potential to substantially raise rents or increase occupancy.

Mendola: In 2003, occupancy came down to 80 percent from 90 percent for well-positioned properties in our market. We are missing the increase in job formation along with the moves and housing formations, as well as consumer confidence that accompany them. With Bushs tax plan now in effect, job formation should increase significantly in 2004 and 2005.

Minker: Self-storage rental rates in much of the North Texas market were almost flat. In fact, owners who were keeping rates flat had to increase discounts to maintain existing occupancy levels in the face of increasing competition. Therefore, even if unit occupancy remained stable, economic occupancy, in many cases, fell. As to occupancy in mature properties, owners struggled to maintain existing levels. Overall occupancy rates declined throughout the market.

It is clear more product and a slower economy are having some impact. It is amazing that occupancies and cap rates can go down at the same time; eventually the trends will be parallel.

ARE BUYERS CONCERNED ABOUT VACANCIES OVER 10 PERCENT? GENERALLY, HOW IS THIS CONCERN HANDLED DURING THE SALES PROCESS?

Barnhill: Some buyers view a significant vacancy factor as a buying opportunity, since they would hope to buy existing rental occupancy and enhance income through more effective operation.

Crowe: There is always concern with vacancies! More service for less money is what happens when the supply exceeds the demand.

Eisenman: Yes, particularly if vacancies are significantly greater than 10 percent. It causes the buyer to look much harder at the market and the facility. Rarely will a buyer ignore large vacancies as solely a management issue. Purchase price reflects all factors: market, management, occupancy, facility condition, rental rates, etc.

Mendola: Yes, buyers are concerned about greater than 10 percent vacancy rates in the Northeast because we are used to 90-plus percent occupancies. I talk about our missing customer coming back in 2004, the high-tech and financial-industry job formation the stock market is pointing to this year.

Minker: Buyers seem to have come to expect occupancy to be less than 90 percent. They are less willing to capitalize income that is not currently there. Buyers are looking at the current overall market condition and trends. If they view the vacancy as an opportunity, they may be willing to factor some incremental amount in their offer to reflect it. However, if they view the occupancy to be flat or in a declining market, they might, in fact, submit a reduced offer to offset the market risk.

Significant vacancies are a classic issue of the glass being half full or half empty. The opportunity or problem is in the eyes of the beholder but for sure they wont pay an 8 percent cap on the vacancy.

ARE YOU SEEING MANY DISTRESSED SELF-STORAGE PROPERTIES AND/OR FORECLOSURES?

Barnhill: The availability of distressed self-storage properties is extremely limited in our area at this time. Foreclosures could certainly become a factor as new construction continues and given an environment of rising interest rates.

Crowe: Not in California.

Eisenman: No, not in my territory.

Hayes: None here.

Mendola: No. In the Northeast, properties are in strong hands and excess supply is temporary in most markets.

Minker: We are not currently seeing distressed self-storage properties or foreclosures coming to the market. Owners with troubled properties are somewhat putting their head in the sand, anticipating the market will get better and enable them to sell their properties under more favorable conditions. Unfortunately, it may be some time before these favorable conditions exist.

We are following a couple of recently built projects that are leasing very slowly in predominately soft areas. The numbers do not look good, but there is still some time left on the loan.

Michael L. McCune has been actively involved in commercial real estate throughout the United States for more than 20 years. Since 1984, he has been owner and president of Argus Real Estate Inc., a real estate consulting, brokerage and development company based in Denver. In January 1994, he created the Argus Self Storage Real Estate Network, now the nations largest network of independent commercial real estate brokers dedicated to the buying and selling of self-storage facilities. For more information, call 800.55.STORE or visit www.selfstorage.com.

Let me share with you an incident that makes my point. Barb, a colleague, was standing in line at a retailers customer-service desk, waiting to return an item. The woman in front of her was returning several items, taking each one out of a bag, placing it on the counter, then slowly looking through a large envelope filled with receipts as she searched for the appropriate one.

Occasionally, the woman would hand a wad of receipts to the employee and ask him to look through them for her. Some of the items she was returning had no price tags, which added to the confusion. Meanwhile, the line of customers behind her continued to growas did their impatience.

The stores employee, however, never lost his cool. He calmly and methodically tried to help the disorganized woman. While his efforts to assist her were admirable, the other customers quickly became angry. Was he caught between the proverbial rock and a hard place? Not really. He could have better served all of his customers by asking the woman to step aside and organize her receipts while he assisted the customers waiting behind her.

Too often, companies instill in their employees such a focus on customer servicedoing whatever it takes to satisfy the customer as quickly as possiblethat common sense flies out the window. This particular companys customer-service training apparently had been effective in that the employee was doing his utmost to help the customer. What that training apparently lacked, however, was the flexibility to assess a situation and determine the most appropriate action.

Let me put it this way: Customer-service training programs, like any other training programs, must include an element of common sense. The clerk described here did indeed provide good service to that disorganized woman, but in the process, he frustrated the seven customers standing in line behind her.

It goes without saying that employees who have contact with customers will occasionally be faced with a disgruntled one. My recommendations for dealing with that customer are these:

• Listen actively. Make responses that show you hear what the customer is saying to you.
• Empathize. Comments such as I dont blame you for being upset can do much to diffuse the situation.
• Ask questions. This not only clarifies what the customer is saying but gives him time to calm down.
• Dont become emotionally involved. Remember you, personally, are not the target of the customers anger.
• Identify the problem as quickly as possible. If a job wasnt completed on time, for example, find out why and ascertain the current status of that job.
• If you are at fault, take the blame immediately. Then apologize and thank the customer for being patient.
• Make a sincere, positive statement. You might conclude the conversation by saying, Mr. Smith, you have been doing business with our firm for several years, and we are going to take care of you.
• Solve the problem. Tell the customer how you are going to solve the problem, then do it.

If you want to know how effective your employees are at providing the type of service customers want, there are several tools you can employ. One is a mystery shopper, a person hired to act as a customer who has a problem and anonymously evaluates an employees performance in solving it. That evaluation will help you to identify areas in which further training is needed. Provided that you supply the additional training, it will result in increased sales.

You also can solicit comments from customers at large. Two tools for doing so are telephone surveys and customer-feedback cards. I caution you, however, that when you ask customers for their opinions, you had better acknowledge them. There is nothing more frustrating than taking precious time to respond to a survey and getting no feedback from the company. Remember: If you dont take the necessary steps to satisfy your customers, your competitors will.

John Tschohl is an international management consultant and speaker. Described by Time and Entrepreneur magazines as a customer-service guru, he has written several books on the topic, including The Customer is Boss, Cashing In and Achieving Excellence Through Customer Service. As president of the Minneapolis-based Service Quality Institute, he has developed more than 26 customer-service training programs that have been distributed and presented throughout the world. You can contact him at 800.548.0538 or [email protected].

The most important component in the operation of a commercial records-storage facility is the standard storage agreement. It ensures permanency and a lifetime relationship with your client. There is an industry-standard contract form with features that ensure your long-term success in the business. This article discusses the contract and those standards.

The commercial records-storage industry trade association, PRISM International (formerly ACRC, the Association of Commercial Records Centers), has, for many years, advocated the use of a contract form promulgated by the association for its members. That contract has become the most common storage agreement used by records centers worldwide. PRISM does not guarantee the accuracy or legality of the contract and requires a signed liability waiver from the members who use it.

There are two critical factors important to understanding the function of the contract:

1. No contract, no businessThe contract locks the client to you and makes it very difficult for him to leave you in the future. If you have no contract, or one that is not written with the standard penalties, the client can walk away from the agreement, leaving no value to your hard-earned storage revenue.

2. The price list may differ from client to clientSchedule A is referred to in the contract and is the price list. There should never be a standard list. It should vary based on volume and service levels, and never be published under any circumstance except within a proposal.

Agreement Attributes

The standard agreement form has several very important attributes it should always include. Lets review each of these.

Limitation of liabilityArguably the most important attribute relates to your protection from liability. This specifically ties the records-storage unit (whether a carton, file or specific media) to a flat stated value. Generally, the value is set at either $1 or $2 per unit. Since business records may have varying valuesfrom very low to quite high depending on their importanceit is imperative to limit the value. No one can compute the potential value of a record or the potential cost of recovering a box or file.

Contract termAlthough the contract term for a records-storage agreement is normally one or two years, it can be extended up to five years if negotiations are necessary. We always want the longest term possible so volume can build. The penalties for early withdrawal include payment for the entire term of the agreement. Generally, any outsource contract is limited, by common convention, to five years.

Evergreen clauseEvergreening a contract refers to its automatic renewal at the end of a term. The wording refers to a 30- or 60-day period during which the client has to cancel the contract. Without positive action, the contract simply renews for the next term. Even though the contract reaches its completion, the retrieval and permanent-retrieval charges continue to be enforced.

Permanent removalRecords may be retrieved at any time during the term of the agreement. A retrieval fee plus a delivery fee is assessed on any unit requested from storage. Units out of storage continue to accrue charges for rental, since the tracking requires continued maintenance and review.

When a carton is retrieved permanently, either for destruction or relocation, there is a second retrieval charge called the permanent removal fee. There is no standard for permanent-removal fees; however, a charge that approximates the fee for regular retrieval is customary. Recently, some companies at the high end of the industry have changed this charge from being based on the unit of storage to the cubic foot. This is a major shift in pricing strategy, since boxes tend to be larger than one cubic foot. I have seen unitretrieval fees that exceed $10.

Periodic price escalationYou have the right to increase prices on storage and service as long as you stipulate the escalation period and the methods of increase. Although there has been a troubling trend in the industry to make the escalation unlimited, I recommend you fix it to something tangible, such as the regional cost of living increase as published by the U.S. Government. The price increase may be applied at an interval during the term of the contract or at the end of the cumulative term of the agreement. There may be a maximum increase stated as well.

Schedule AThis refers to the price list. I recommend this never be published, since it can vary from one client to another. Additionally, the list should only cover those services you offer. A description of these should be written on the reverse side of the Schedule A. This ensures the client fully understands the service as you have defined it, and it is clearly stated and agreed to by his signature. There can then be no doubt the client understands the levels of service and prices you offer. It is wise to have him initial and date the Schedule A as well.

Addenda to the agreementThe agreement may be added to at any point during the term of the agreement as long as both parties agree and document it in writing. The appropriate form of an addendum refers to the original agreement and either adds, deletes or changes services, prices or terms.

Client for Life

The issues addressed above must be included in the agreement to ensure you have a client for life. Records-storage volume from existing clients should grow at a rate of 7 percent to 25 percent annually depending on the age of the account. Newly outsourced companies have a tendency to grow at faster rates and decrease to about 7 percent compounded annually after they mature.

If you want to review several versions of the PRISM storage agreement, request a proposal from an existing records-storage center in your community to receive a copy of its contract. It is widely available from PRISM members who are interested in acquiring your business. Of course, I urge you to join PRISM and sign its waiver form prior to using the contract for your storage center. Visit www.prismintl.org for more information.

Regular columnist Cary McGovern, CRM, is the principal of FileMan Records Management, which offers full-service records-management assistance for commercial records storage startups, marketing assistance, and sales training in commercial records-management operations. For assistance in feasibility determination, operational implementation or marketing support, call 877.FILEMAN; e-mail [email protected]; www.fileman.com.

There are many vehicles that can carry the message about your facility. Almost daily, you see newspaper ads, Yellow Pages, fliers, direct mail, websites, and dozens of other means proclaiming a product or service. This article outlines several methods of garnering customer attention and making the most of it.

Designing Your Ad

If you choose to use display ads, it is important they are designed for maximum impact. An ad need not be large to convey your message and grab readers attention. When designing your ad, pay careful attention to the following:

The Headline. You must first motivate prospects to read beyond the headline. This is crucial, especially if you consider 70 percent to 80 percent of consumers do not read beyond the bold type at the top of an ad. Successful headlines present news or promise specific benefits. Keep heads simple and direct. Do not use language that confuses readers.

The Body. The body must clearly and concisely help prospects understand the advantages of responding to your ad. Be specific and use attention-grabbing phrases. Let prospects know the benefits your facility offers. If your most attractive feature is climate control, keep that foremost in your mind while developing your ad. If your wish is to emphasize a state-of-the-art security system, your approach will be different. The body of your ad must clearly reflect your objective in serving the customer.

The Five Ws. Always cover the basics of who, what, when, where and why. Make sure the ad clearly states the purpose and function of your business. Include your address and any nearby landmarks, such as a shopping mall, as well as your phone number and business hours. The more specific your text, the easier it is for readers to grasp. For example, do not say you have high ceilings. More effective text clearly states, 12-foot ceilings available. If you are advertising security, make sure your ad clearly specifies what features you offer, such as lighted, 12-foot, razor-wire fencing.

Use Endorsements. Nothing attracts prospects like the endorsement of a distinguished hero or respected celebrity. But, to be effective, endorsements or testimonials must be believable. Dont overdo it, or you will lose credibility.

Guarantees. Guarantees should be expressed prominently in your ad; but be careful about using ambiguous or misleading text. Use disclaimers if necessary.

Coupons. A coupon at the bottom of an ad offering 25 percent off the first month for a limited time attracts prospects to your business and provides important feedback on which printed ads are most effective. Develop coupon-code numbers to track your ads efficiency.

Design to Stand Out. You must use a design strategy that grabs a readers attention. For example, a unique or bold border can help an ad pop. If you are including a photo or illustration, make sure it is a clear portrayal of your primary message without a lot of frills or clutter. If you are using a sale or contest coupon, make it large enough for prospects to easily write their name, address and phone number.

Once your ad is designed, it is time to consider where it will be used. There are several ways to advertise your storage business.

Yellow Pages

Although the Yellow Pages tends to be expensive, its the best source of advertising, says Mary Briggs, a writer for Kevin Howard Real Estate. The bonus is people who pick up the directory are already in the process of selecting a facility; you dont have to sell them on storage. You do, however, have to sell them on your facility setting yourself ahead of the competition.

Keep in mind larger ads tend to attract more attention. Make sure you match or beat your competitors ad size. If you decide to save money and go with a smaller ad, you may end up losing a lot of business in the long run. In some areas, larger Yellow Pages ads garner preferential placement in the directory, says Briggs. If you have two or more facilities, you might afford a larger space by listing them both in one ad. Most areas have more than one directory available. Before buying space, check the circulation of each, when they are published, and if the listings are accurate, complete and up-to-date.

According to Fred Gleeck, a self-storage consultant, there is no research or evidence to support the assertion that being first in a Yellow Pages section generates more calls. Dont rely on image advertising in your ads. You only need to concern yourself with one thing: renting units. To make this happen, Gleeck says you need to include:

A great headline. Do not use the name of your facility at the top of your ad. Use a headline that combines your biggest benefit with your customers greatest need.

A list of features and benefits.

A storage hotline. Every facility should have a number people can call with a recorded message of its features and benefits.

Maps. Every ad should have a small map with major cross streets to make your facility easy to find.

Websites. Always include your web address in your ad.

Direct Mail

More than 50 percent of U.S. recipients of direct mail read it immediately, and of those, more than 40 percent found the information they received useful, according to marketing bureau Crest Services of Torrence, Calif.

Direct mail can be a very cost-effective marketing technique for storage operators, Gleeck says. What you print at the very top of your mail piece is crucial to its success. Take your biggest benefit and match it with your potential renters greatest need. If peoples attention is not grabbed at this point, theyre lost, he says.

Owners can use two types of direct mailing: Send out a solo piece or participate in some kind of co-op mailer. The second category would include things like Val Pak or Money Mailers, where your piece is included with a group of coupons from other vendors. You have one shot, so make it your best one. Make sure you have a code number or numbers on each direct-mail piece you send out.

The beauty of postcards is they are cheap and easy to create. You can make a decision to do a postcard mailing and in less than 48 hours. If you choose to test a letter over a postcard, remember some key elements: First, never use labels, as they scream junk mail. Instead, use plain white envelopes with stamps (not metered mail), and have letters hand addressed. Gleeck has seen response rates jump more than 800 percent just by following these simple steps.

Special Community Events

Briggs suggests participation in community activities is especially advantageous in keeping the facility visible in your area. Participation in special events works exceptionally well in small, rural areas, but can also work well in larger cities through neighborhood organizations or local business associations. (For more information on special-event marketing, see this months article on Drawing a Crowd.)

Fliers

Fliers are often used for short-term campaigns, such as a grand opening or a promotional special, says Briggs. Fliers can be distributed by the manager (or other sources) in specific geographical areas, such as parking lots and apartment complexes. Keep flier advertising simple, specific and trackable. Keep headlines to less than seven words and body copy to no more than 50 words. Readers tend to have very short attention spans, so give the message quickly.

Tenant Referrals

Word-of-mouth is rapidly becoming a viable source for new tenants, according to Briggs. In some areas, tenant referrals are rivaling Yellow Pages in percentage for sources of new customers.

Stuff It coupons can be included in move-in packets and/or distributed as tenants pay their monthly rent. Offering a discount to current tenants gives them a greater incentive to pass on the coupon, and it also serves as a thank you for their business.

Business Letter

Commercial-and business storage tenants are still a relatively untapped source of new customers for self-storage, according to Briggs. The business letter is an inexpensive method of promoting your facility and services to them. The letter can be targeted toward specific businesses or services, i.e., seasonal inventory storage. It should offer some type of discount or giveaway to track the response, such as 10 percent off or three free file boxes.

The letter can be sent by the manager on a monthly or quarterly basis, or used as an introduction for additional services or a specific event, such as storage of dead and year-end files. It should always be followed with a phone call or visit from the manager to further promote your services.

Cynthia Perun, president of Creative Communications, suggests these seven tips to writing more effective sales letters:

1. Imagine yourself as the reader of your letter as you write.
2. Organize your letter with a beginning, explaining why youre sending the letter, the body, telling the reader why your offer is irresistible, and the ending, where you briefly bring your points together and ask him to take advantage of the offer.
3. Write so the letter is easily read in simple language or a conversational tone.
4. Capture the readers attention by telling him something he wants to know.
5. Get the reader interested.
6. Have the reader desire your service by answering the question, Whats in it for me?
7. Ask your reader to take action.

Internet

Gleeck offers a strategy any storage operator can use to get traffic to his website. By listing your website on a pay-per-click search engine, you can keep track of how many people search for your facility. Then, by purchasing domain names that complement your original and forwarding traffic, you can capture would-be-lost surfers. For example, Gleeck suggests purchasing domains that include your citys name and the terms self storage or storage. If you live in Portland, for example, purchase www.portlandselfstorage.com or www.portlandstorage.com.

Michael Zervas of Michaels/Wilder Group says banner advertising is a cost effective, attention-grabbing, online mode of communication, typically found on commercial or search-engine pages. It allows you to track impressions to learn how many times the banner has appeared in front of a potential customer.

In addition, website owners can track click-throughs to learn how many times a customer has actually been driven through to their specific sites. Facility owners can choose between commercial sites, search engines and reciprocal placements with compatible sites. Consider demographics (education, income levels, number of adults vs. children, number of men vs. women, etc.), targeted mapping (geographic locations of homework and play) and psychographics (attitudes and beliefs), Zervas says.

Signage

Your facilitiys sign is one of the most important advertising methods you have, says Jim Chiswell of Chiswell & Associates LLC. Choosing a facility name that ties into the community is an effective advertising tool. Keep the design simple, with an easyto- read typeface, a limited amount of information and concise message. Make sure the sign is coordinated with the same information a customer will find when browsing the Yellow Pages.

Pamela Alton, owner of Mini-Management, says although zoning regulations dictate where a sign should be placed, the key is to put it on a visible street front where it can be easily seen by drivers. For a facility located nearbut not ona main drag, consider negotiating with a local business owner on the main street to post a directional sign on his property with the name of your facility and an arrow to lead traffic in the right direction.

The right color can make the sign stand out, Alton says. The wrong color can fade into the rest of the neighborhood. Generally, yellow is a standout color, but only if the rest of the streets signs are different colors. Stick to primary colors; pastels are too pale and earth tones too mundane. To make the lettering stand out, consider using contrasting colors, such as black or red letters on a white background.

Conclusion

As technology expands, new modes of advertising are born. Fax and e-mail blasts slowly replace telemarketing, websites become preferable to billboards, and direct mail ousts door-to-door canvassing. Marketing becomes complexmore economical and expensive all at once. As competition in the marketplace heightens, storage owners and managers will scramble to deliver their message to prospects. Though there are ever more options, sometimes the best ones are the tried and true methods of old. Dont be afraid to experiment, but remember your trusty fall-backs.

When it comes to their work, most people want to do a good job, be recognized for it and, hopefully, rewarded. Most of us have, at one point, experienced the great feeling of being complimented by the boss on a job well done, the inner glow of pride, the satisfaction of knowing someone has recognized the hard work and extra effort weve put forth.

Maybe youve been lucky enough to get that bonus you werent expecting, whether something personal like tickets to a game, a gift certificate to a local restaurant or a little extra money (my favorite). A few of you may have even experienced the Holy Grail of recognition, the one that not only acknowledges the exceptional work youve done and rewards you financially, but also makes you realize your boss sees you as an asset and a key player in the companys futurethats right, ladies and gentleman, nothing puts a little zip in your doo-dah like a promotion!

What better way for a supervisor to say youve mastered your position than to appoint you the one to train incoming personnel, act as their immediate supervisor, and be rewarded when they do a good job. Nothing says Youre our man (or woman) like someone trusting you to handle things that, until now, were left to someone with a higher rank and pay scale.

Storage-facility managers arent unlike the rest of the working class in this respect. Unfortunately, we are solitary creatures. We work mostly unsupervised, and often have little or no contact with the corporate office or even other facilities in our organization. Although we are entrusted with incredible duties and tasks, such as caring for and maintaining million-dollar properties and customer bases comprised of hundreds and even thousands of residential and commercial, short- and long term customers, it seems anti-climactic when we receive a paycheck more befitting an employee than a manager.

Most of us are so good at what we do, our positions seem mundane; and we always want to make more money. The only thing that cures both these ailments is the aforementioned promotion to area manager or other similar position.

Watch What You Wish For

What better to cure what ails you than to do something different for a change? A promotion will often allow you to test your limitations and enjoy what youve been secretly longing for: extra money, perks, a change in scenery, the power and ability to actually make a difference. The best part is the feeling someone else has validated you.

The only problem is, now that youve made it, it may not be quite what you thought. You might not make as much extra money as you were expecting (its funny how the numbers always look better on paper). If there is travel involved, perhaps its not as much fun as it looks. And while that goldcard expense account may say power and give you a sense of confidence, it also gives you a false sense of security. As for a change in scenery, Dorothy learned the hard way, Theres no place like home.

The Grass Is Always Greener

A promotion will give you plenty of responsibilities to test your skills. You now have the task of answering your managers biggest questions, calming their deepest fears, and helping them solve their biggest problems. All that takes place on your regular monthly visit, during which you have 8 to10 hours to address all company and facility concerns, bring the manager up to speed on the newest operational initiative, try to measure how well the last initiative is going, and hold the monthly auctionbefore, during or after the site inspection/audit.

And by the way, the boss is on the phone. He needs you to go over last months profit and- loss statement on property x (which hell fax to you). Did you notice the spike in discounts? You need to isolate those figures and identify how many are for the current month and how many for future months, because that number is messing up the refinancing process. And theres no rushas long as he has the information by tomorrow, that will be fine.

Oh, by the way, you and/or your position is being reassigned, redistricted, restructured or re-evaluated. And thats if, in your new position, in a new place, interacting with new people, under new circumstances, you dont (gasp) actually make a mistake! Maybe then youll be just plain old eliminated.

As a self-storage manager, I often heard from competing facilities about their new district managers. It seemed they turned over pretty quickat least the ones who were trying to make a difference. It seems the ones who last the longest are the ones who try the least.

Making the Leap

People dont often change until the pain of staying the same is greater than the pain of transforming. Even fewer change without it being hoisted upon them or there being a life altering circumstance that precipitates it. When it comes time to make the leap, it is usually because we were forced to do so, or because we just couldnt stand to see things stay the same. Either way, it is not often we make the leap under the best of conditions or on our own terms.

This is especially true when it comes to starting your own company. In my opinion, the only thing people want more than to be promoted is the opportunity to start their own business. Many managers tell me if they had the means to do so, they would buy their own facility and work for themselves.

I agree. I love what I do and, given the choice, I would continue doing it. Although I cannot yet afford my own facility, Ive decided to take the lessons Ive learned as a facility manager and pull together the necessary tools, skills and knowledge to begin my own consulting and management-services business. Sometimes you have to take control of your own destiny. This is true in self-storage and any other facet of life. I wish you all the best in your own fortunes.

David Fleming is the founder of Fleming Management Services, which specializes in facility operations, profit maximization and liability management. Specialty services include operational consulting, systems analysis, manager training, auditing and site inspections, as well as policies and procedures review, creation and implementation. Mr. Fleming has more than 10 years of practical experience in managing self-storage properties. He is a columnist for Inside Self-Storage, a contributing author to the Self-Storage Telegram and a regular speaker at industry tradeshows. For more information, call 610.724.1002; e-mail [email protected].

It's the beginning of a new year and the time when storage owners start refreshing their advertising campaigns. Most use some form of advertising to attract new customers and create recognition for their facilities. Whether your advertising is elaborate or subtle, you want to make your dollars stretch by advertising right and avoiding the pitfalls and risks.

Some owners and managers are not aware of laws and regulations that govern advertising. Violations can create severe penalties and litigation. Most likely, your self-storage insurance policy provides some protection, but it doesnt hurt to take precautions before planning your campaign.

The risk of advertising is heightened if an ad is false or misleading. It is illegal for an advertisement to make unsubstantiated claims or fail to include details of an offer. An advertisement is considered false or misleading if the public is likely to be deceived. Even if the ad is true in a literal sense, it does not prevent it from being deceptive. Keep in mind the overall image and placement of words and text can make an otherwise innocent advertisement ambiguous. Although it seems simple, advertising requirements are often subtle and contain downfalls for the unwary. So the next time you develop a catchy new ad, consider the way the message will be perceived.

One way to avoid potentially deceptive statements is to use disclaimers, which can clarify statements or claims made in an advertisement. A disclaimer should list the requirements to qualify for an offer or the restrictions on its availability. For example, to catch potential customers attention, you advertise one month of free rent to all first time tenants. The free month would be the second month to discourage people from storage hopping; but because a lot of readers may assume the first month is free, you should put an asterisk by the claim and place the appropriate disclaimer somewhere in the advertisement so customers understand how the offer works.

Keep in mind that disclaimers cannot correct inaccurate or false information in an advertisement. Care must also be taken so if a customer is supposed to receive a product for free, he actually does. For example, if you offer one month of free rent, that unit must be rented for the regular price at all times and cannot be increased to recover the cost of the free month.

Be careful with testimonials, claims and the use of the words such as promise or guarantee. Testimonials or other claims must be true and capable of being authenticated. For example, if you decide to advertise the safety and security of your facility, make sure you can back up that claim.

To ensure further protection from claims of false advertising, you may want to consider taking out higher limits of business-liability insurance. This coverage, included in your insurance policy, can provide important protection against lawsuits involving libel, slander, physical eviction or the false arrest of a third party; and advertising-injury lawsuits involving plagiarism, copyright infringement and false advertising. (Note that while libel, plagiarism, etc., may not seem like bodily or property damages, that is how the courts have interpreted them.)

If you are found liable in a lawsuit, business-liability insurance might cover those sums you become legally obligated to pay up to the limits of your policy. In short, it protects your business, your assets and your peace of mind.

Universal Insurance Facilities Ltd. offers a comprehensive 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]; visit www.vpico.com/universal.

Randy Vander Hill began his career 32 years ago in the industrial-equipment industry when he was just a teen, working weekends and summers for the company that employed his father. In 1983, he launched his own business, Placentia, Calif.-based AJAY Equipment Corp., which sells and installs vertical reciprocating conveyors designed for the self-storage industry.

Vertical reciprocating conveyors, or VRCs as they are called by many people, were slowly coming into the storage industry, recalls Vander Hill. We had done some of the first installations at the prior company I worked with, and I really felt there would be a market for this product in the storage industry, if it was promoted properly.

Vander Hill was right. Twenty-one years later, AJAY continues to thrive with more than 600 installations in 41 states. The company has 16 employees, most of whom have been with the company for many years. We feel the most important part of any business is the employees, and we are certainly very dedicated to ours, he says.

The VRC Advantage

AJAYs custom-made lifts are an economical alternative to passenger elevators, especially for existing self-storage facilities. There are a lot of facilities that were built in the 70s and 80s, and even some being built today, with two or sometimes three stories that do not have any kind of freight lift or elevator. This is a viable alternative and at a great savings to the customer, Vander Hill says.

Purchasing a VRC rather than a passenger elevator could save a self-storage operator as much as $75,000 just in the initial purchase, installation and first few years of maintenance. Its an economical alternative. I wouldnt build a two- or three-story facility without having a lift of some kind. You will not lease the upper floors without this kind of product, Vander Hill says.

The easy-to-use VRCs transport a storage customers goods from floor to floor. The customer loads his goods onto the lift, then takes the stairs or a passenger elevator. The VRC takes only seconds to reach the next level.

VRCs are also bigger than the standard passenger elevator, which translates to fewer trips for the self-storage customer and eliminates carrying heavy boxes up and down stairs. Typically, with passenger elevators, the carrier car is predicated by capacity. Many passenger elevators have a much smaller interior space than our vertical reciprocating conveyors, Vander Hill says. For example, a 2,500-pound-capacity passenger elevator may have an interior car size of only 4 by 6 feet. VRC platforms are 6 by 9 feet. Theres a lot more space to put your goods on.

There are other advantages as well. The VRC uses a free-standing truss mast-tower design. Its a key component, because this design is extremely rigid and doesnt rely on any building structure for support. Thats what makes it unique, Vander Hill says. With a lot of elevators, you have to put in concrete load-bearing walls, a deep walled concrete pit and major electrical services. Our product doesnt require any of this.

The VRC comes with numerous safety and proprietary design features developed by AJAY, including a four-way safety slide-bolt interlock, and other electrical and hydraulic safety features. AJAY also offers a maintenance plan. You would not want to make this kind of investment without getting after-sales service. This is a considerable expense and should not be neglected, Vander Hill says. In todays world, we are all concerned about safety and liability, so we want to make sure the product is properly maintained. Thats one of the things our company is known for providing quality after-sales service and multi year warranty customer support.

AJAYs customer base has grown over the years to include small and large companies. Most of our customers are still the mom-and-pop companies who will buy one or two lifts, Vander Hill says. However, we do multiple installations for many of the larger firms, including Storage USA, 5A Rent-A-Space, Caster Properties and Public Storage. We take great pride in the longterm business relationships we have developed through the years with all of our customers and the many building contractors who have worked with us.

It is the companys reputation for quality work, superior equipment and excellent customer service that has driven AJAYs continuing success. There have been other companies that have come and gone through the years, and like I tell everyone, were here to stay, Vander Hill says. When you look at the whole picture of who we are, what weve done and what we do, it why we feel there is no equal.

For more information, call 800.521.AJAY; visit www.ajaystoragelifts.com.  

In todays high-tech world, we get bombarded by slick advertising. Thousands of dollars are spent on TV, radio, billboards, newspapers and magazines to win our business. Companies spend billions to get the word out about their products or services, and the self-storage industry is no different. We, too, spend money on advertising to get people to store with us, to show prospects we are different from the facility down the street.

Self-storage is one of the biggest spenders on Yellow Pages to address local communities. Having an ad in the Yellow Pages is a givenwho in self-storage could survive without one? The largest portion of your advertising dollars will be spent on the ad; after all, most of your calls are going to be generated from that book! The question is, do we need to spend thousands more on other advertising? Yes and no.

If you are opening a brand new facility, a top priority should be setting aside enough advertising dollars to hit the ground running when you open your doors. Ideas in this article will work well for established facilities as well as new sitesproviding, of course, your facility is well staffed and you are willing to set aside money for those one-time costs.

Community Support

One of the best low-cost advertising tactics is to get involved in your local community. Here are some possibilities:

You can support a local soccer or softball team, offering a free unit to store equipment in exchange for its endorsement. You can even make a sign to hang on the fence around the field or place a free ad in the teams roster.

When the Girl Scouts host their annual cookie drive, consider donating a vacant unit for a week or so to serve as a drop-off/ pick-up point for the merchandise. The parents and girls will come to the facility almost daily, bringing in new people who dont currently store with you. They will remember you when they eventually need storage.

Contact your local newspaper anytime you engage in a community event or charity. Ask for an article to be placed in the local community- service or business section of the paper. They will usually send out a photographer and write a nice little piece about your facility and the service you are offering.

Contact your local police department and offer your facility as a training center for its K- 9 dogs. Training could be held after gate hours or during slower times of the month. If someone wants to rent a unit at your facility for illegal activities, they will think twice when they see you provide a venue for K-9 training. Again, call the newspaper and get a photo and article published. Then you can have a copy matted and framed to hang on your office wall. This not only makes great artwork, it shows tenants the valuable services you provide the public.

Check with your local school district, department of social services, or police or fire departments and offer your facility as an official finger-printing site for a day. They will make up fliers and post them in their lobbies. Some will even run TV or printmedia adsand you can always get a TV ad on your local cable station under community service events.

Donate your facility for a fundraiser such as bake sale or car wash for the local high school cheerleading squad or band. The educational community is always looking for places to hold this type of event. You can help the school and get people into your facility who wouldnt normally visit you.

Holiday Spirit

During the winter holiday season, you can offer your facility as a drop-off center for a canned-food or Toys for Tots drive. Work with a local church, synagogue or community center to gather and store the goods. If they have a newsletter, ask them to print an ad for your facility in exchange for your service. Again, you can contact your local cable TV or radio station, which will be happy to mention your facility on its community-service calendar.

Holidays provide an excellent opportunity for specialty marketing to your community. On Easter, you can close the facility and offer it to the community for an Easter-egg hunt. On the Fourth of July, offer a side of your parking lot for a fireworks stand (only if this is legally allowed in your area, of course).

Some marketing will involve an initial investment. For example, a marquee sign will probably cost you more than other signs, but will allow you to convey different messages on a rotating basis. You can use it to announce a sentiment during the holidays, a managers special on overstocked units or various community events. If you already have a sign, build or purchase a portable sandwich-board sign that can be changed regularly and placed at the entrance of the facility.

Small holiday items can be used as giveaways to new tenants. For example, there are at least five times during the year when a small American flag can be given to new tenants: Memorial Day, Fourth of July, Labor Day, Veterans Day and Presidents Day. You can offer new tenants free pumpkins at Halloween and Thanksgiving or, at Christmas time, a box of colorful lights or an ornament. What you dont give away can be donated to a local charity.

Remember, your managers have to be given the tools and allowed the time to do any outside marketing. They need to be trained in marketing so they know what is expected of them, and they need to be held accountable for those marketing efforts. Make sure any special promotions or services you offer to the community are reflected in your advertising. Marketing is not a one-time shot; it must be consistent and tracked to be successful! With that said, happy marketing and a very successful new year!

Pamela Alton is the owner of Mini-Management®, a nationwide managerplacement service. Mini- Management also offers full-service and operations only facility management, training manuals, inspections and audits, feasibility studies, consulting and training seminars. For more information, call 800.646.4648.