Cost self-storage owners use retailing to increase revenue, improve their business image, and better serve customers in a professional manner. They want to minimize overhead and maximize profits. In other words, they need a system of inventory control.

Now before you yawn and turn the page, hear me out: Inventory control isnt as complex or boring as it may sound. All it means is having just enough of the products customers want without tying up too many dollars. Its that simple. Big-time retailers have elaborate and expensive systemseven whole departmentsjust to keep a handle on what to stock and how much of it to buy. Im going to offer a way to do the same thing at your self-storage operation without all the fuss and expense.

The secret lies in two things: displays and plan-o-grams. A well-designed display lets you exhibit everything you carry in a neat, space-saving manner. It makes you look as professional as you are. And it keeps your retail area from crowding your office space. But a display without organization wont be as effective or profitable as one that is well-planned. You need to make sure there is a permanent home for every item and nothing goes into a slot except the item for which it is labeled. In this way, you can quickly see whats selling, restock and reorder inventory, all without complicated, pricey programs.

But how do I know what to stock and where it should go on the display? you ask.

Well, that brings us to plan-o-grams, which are like blueprints for retailers. Supermarkets get them from their suppliers, who can tell them where the bestsellers should go on the shelves and how many facings to give them. For example, soup and cereal companies are famous for their plan-o-grams.

In the self-storage industry, decent suppliers of retail products offer plan-o-grams with their displays and merchandise. After all, its in their best interest to sell you only those items that do well and tell you how to make them even more marketable. The more you sell, the more they sell. Its a win-win situation.

Making it all Work

So youve got a display, a plan-o-gram and retail products from a supplier that knows merchandising. How do you use them to control inventory and your investment? First, keep every retail slot filled. No one ever wants to buy that last can of baked beans on the shelf! Second, dont run out of stock because, as they say, You cant sell a hole. Finally, at least once a day, have an employee go over your display, restock slots and pegs, and see to the back-room inventory. Also have him remove any opened or shop-worn items and put them in the clearance bin.

How do you know how much stock to keep on hand? The best retail suppliers provide 24-hour processing of orders. If you add one day of processing to the standard transit time, youll know how many days worth of supply you need to maintain a minimum-cost inventory. How much is too much? Your supplier should be able to provide you with recommended minimum/maximum levels for each item based on the experience of other self-storage operators.

Stock your displays with the best name-brand products while you control your inventory and youll be on your way to selling (and buying) like a retailer. If you have questions, ask a reputable supplier for help.

Roy Katz is president of Supply Side, which distributes packaging as well as moving and storage supplies. The company has developed merchandising programs for many leading companies including Storage USA, the U.S. Postal Service, Kinkos, Mail Boxes Etc. and The UPS Stores. For more information, visit www.suplyside.com.

Technology previously available to other industries can now be applied in self-storage operations. Lets take a look at three tools that are assisting the marketing and financial success of self-storage: the Internet, call centers and kiosks.

The Internet

The Internet is a revolutionary communication pipeline that has transformed the world and the way business is conducted. A person can get on the Internet and complete in a short period what might have taken weeks or months to accomplish just 20 years ago. In fact, use of the Internet, e-mail and e-commerce has become so commonplace that it is almost taken for granted as the public at large has become accustomed to its benefits.

The beauty of the Internet for businesses is it allows them to reach their client base and potential customers from the comfort of the home or office. In regard to self-storage, it even allows customers to tour a facility without having to physically visit the space, a powerful advantage when someone is attempting to make a buying decision from out of state.

The Internet allows smaller operators to compete with larger ones on a relatively equal playing field because it helps create the perception they are professional and keeping up with the times. Self-storage websites can be elaborate, with the ability to take reservations and payments, or simple, with only pictures and general information. Whatever your budget, it is important to get the most out of your website. Think of it as an extension of your business that works to promote your products and services 24 hours a day, every day.

There are many ways to promote your website. Some are costly while others have little or no expense. One rule of thumb is to treat your web address (also known as your domain name or URL, i.e., www.ABCstorage.com) as you would your phone number. After all, the key to a successful website is getting people to visit it. This means any printed materialsletterhead, envelopes, business cards, brochures, invoices, handouts, etc.should include your web address.

Prominently display your web address in your Yellow Pages advertising. It is interesting to find that people actually look at the Yellow Pages, and then visit your website to get all the information they can before calling or visiting you. This phenomenon increases as high-speed Internet access becomes available in more areas.

Another way to promote your website is to invest in search-engine rankings and concept sites. Treat this type of promotion as paid advertising because there will be an investment on your part. If you are not familiar with search engines, think of them as a giant Rolodex. You type in keywords related to your subject or topic, and the search engine does all the work, providing a list of websites related to your search. Yahoo and Google are two popular examples of search engines.

What is important about search-engine rankings is the position in which your website falls on any given list. For instance, the engine may return five pages of websites, but the best position is on the first page, as far to the top as possible. There are services to assist you in registering the right keywords to rank higher on these lists. Shop around and educate yourself on how rankings work before investing in this kind of assistance.

Concept sites are a different way of Internet marketing. They are hosted by companies that target specific niche markets, for example, moving and storage. Concept sites take care of search-engine rankings, banner-ad placements and website organizationyou simply pay to be a member. The site host handles all the promotion and trafficking of the site, and you benefit by exposure to visiting customers. Sites like these give browsers an abundance of choices in one place. Examples include Monster Moving and Online Self Storage.

If you have the ability to take rentals and payments through your website, you may want to consider these opportunities. Stopping a customer from shopping around by making him a customer before he even moves into town is a competitive advantage. You also want to promote your online payment feature to all current tenants. This is a wonderful alternative for those who dont want to leave a credit card on file at your office.

Call Centers

Call-center technology has been employed by huge corporations for many years and is fast becoming a staple technology for self-storage operators. The biggest advantage to employing a call center is availability to your customer base. Have you ever thought about how many phone calls you miss when your office is closed? Most people shopping for storage will not leave a message. Theyll simply call the next business in the phone book.

When a person answers the phone, customers should immediately get the information they need to make a buying decision. Call centers have the ability to take reservations and payments and stop customers from shopping around. Most can handle calls 24 hours a day, and many are cheaper than the cost to hire additional employees. You can even advertise a special hotline number to the center in your Yellow Pages ad and on your website. Call centers are another way of extending contact to your customer base, making it convenient for prospects to do business with you.

Automated Kiosks

Kiosks are popping up at self-storage facilities all over the country. This technology is the newest to find its way into the industry. Many of you may be familiar with automated checkout stations at your local grocery store, post office or bank. Kiosks can offer similar benefits to self-storage operators and customers.

In addition to renting units, accepting payments, dispensing locks, taking digital photos of customers and printing leases, kiosks can be programmed with a multimedia tour of the property that can be viewed 24 hours a day. They can incorporate biometric scanners, offer tenant insurance, and accept all forms of payment, even cash. Kiosks, which interface directly with your management software, make your business accessible even when you are closed and, therefore, serve as a phenomenal marketing tool.

The Future Is Here

The future is now. The tools examined here are only a few that will change the way people handle their self-storage business. Modern technology allows you to offer greater convenience while communicating with and serving more customers. The day will come when renting units 24 hours a day will be the standard for the industry. As the Internet, call centers and automated kiosks take hold, we will meet with success throughout the 21st century.

Raymond E. McRae is the vice president/director of operations for Mesa, Ariz.-based Storage Solutions, which conducts feasibility studies, third-party management, market surveys, consulting, auditing, acquisitions and development for the self-storage industry. For more information, call 480.844.3900; visit www.storage-solutions.org.

Keeping kids safe is a task the whole community should embrace, not just parents and police. U.S. Storage Depot, based in Saline-Mich., found a way to contribute by hosting a Child ID Day, during which parents could bring their children to be fingerprinted.

More than 2,100 American children are reported missing every day, according to the U.S. Department of Justice. If families can quickly furnish fingerprints, descriptive information and a current photograph to law enforcement, the chances of safe recovery are greatly increased. The National Center for Missing and Exploited Children (NCMEC) reports the recovery rate has increased from 66 percent in 1990 to 94 percent in 2004.

We like to keep with a charitable theme and give back to the community when launching a new facility [with a special event], says Bryan Feldpausch, marketing director. A Child ID Day seemed like an idea with great potential, but the overwhelming response from parents caught the company off guardabout 400 people turned out for the first program. Now U.S. Storage Depot regularly features the event as part of its marketing mix.

To reach prospective attendees, it enlists the help of schools. Generally, well put an ad in the paper, and print a bunch of fliers and take them directly to the school system, Feldpausch explains. Sometimes they cant do anything for a for-profit business, so we keep the flier free of logos and explain that its not-for-profit.

U.S. Storage Depots Child ID Days are coordinated by a local woman who specialized in organizing the same event for schools. Originally, she didnt think wed be able to draw as many people, and now she works with us at all our grand openings, Feldpausch says. It turned out attendance at schools was limited to no more than three classes, with teachers not able to send every pupil. At our facility, we bring in kids from five different districts. We also offer it on Saturdays when kids arent in school, so families can more easily attend.

The police department provides experts who fingerprint the children. A roll of each childs prints and a tip sheet are sent home with parents, who are encouraged to staple a current photograph to the packet. According to the NCMEC, one of six missing children is recovered because someone recognized his picture. In some cases, police coordinate the entire child-ID program and include digital photos on floppy disk or offer copies of dental records. Interested self-storage owners should check with local police departments to learn what programs are available.

Sweetening the Pot

In its promotional fliers and press releases, U.S. Storage Depot touts incentives such as food, games or visits by fi re trucks. A recent event featured the Candy Sheriff, a costumed figure who passed out candy. Also on the agenda was Dan-Dan the Choo-Choo Man, the engineer of a mini train that gave rides throughout the facility. Sometimes the day even includes an RV show coordinated by a local dealer, an added treat for adults.

We might talk to a pizza parlor and get it to donate or split the cost of 30 or 40 pizzas so we can offer free lunch, Feldpausch says. Sometimes the local police or fire department brings a vehicle, which can keep kids occupied for hours. U.S. Storage Depot has also offered a petting zoo or other animal exhibits through groups like the Humane Society or 4-H Club.

Good Business

Once the serious fingerprinting business is complete, kids are free to have fun while parents explore the facility. Each event lasts about four hours and, without fail, three or four families stay for the duration. Feldpausch believes the positive connection potential customers make between the event and its host is invaluable.

When you bond with the community, you relate to people and give them the impression you are giving something back to them. It gives them a feeling of warmth. I can still remember when Bell Tire used to give out free hotdogs when I was a kid, and that was years and years ago I dont see why every other kid and his parents wouldnt feel the same way I did.

U.S. Storage Depot is always looking for opportunities to do community organizations a good turn. Every time, the company scores its own reward in good will. For example, last year, a minister needed a place to hold donations for his churchs annual clothing drive. The company furnished a free unit for a couple of weeks, inviting people to come by and deposit gifts. We did a little bit of publicity, and the church itself did a pretty good job of publicizing the drive, Feldpausch says. A lot of people came by our site to drop off clothing. It gave them a chance to see what we have, that its a state-of-the-art facility. As a result of helping the church, we increased foot traffic and made people more aware of our site.

Similarly, this fall, the company made a unit available to the Cub Scouts to store boxes of popcorn for a fund-raiser. One of the facilitys lobbies was used as a drop spot, and about 150 people came by to look around. All that just by giving one storage space to Cub Scoutswe are branding our name by doing something charitable, Feldpausch observes.

U.S. Storage Depot has more than 22 years experience in the self-storage industry, designing and building award-winning facilities. For more information, call 734.944.1803.

How do you do that? One of the best ways to help your facility get high occupancy and sustain it is to properly market your business. To do this, you first need to do your homework.

Know Where Customers Are

A feasibility study is important for many reasons, but it is particularly critical to your marketing effort. If you have already done a feasibility study and know your location is good, you probably also know the majority of your customer base comes from within a 5- to 6-mile radius of your facility, or a 10-minute drive. There are exceptions, particularly if your facility is in a small town or rural area, in which case, the market might be larger. But generally, you can count on these distances as a good rule of thumb.

Know Your Market

Knowing your market is critical to success. Your feasibility study reveals the nitty-gritty details of your customer base. It tells you the makeup of your neighborhood, for example, whether it consists of housing developments, schools, colleges, apartments, military bases or commercial businesses. This kind of information is important because its a clue as to the kind of storage your customers will need (unit size, climate-control or standard, etc.) and how long they are likely to lease the space. It will also give you population counts and demographic information, such as average age, income and gender of your tenants.

Know What Customers Want

Marketing studies reveal that when selecting a self-storage facility, customers primarily desire convenience. They want to be close to their stored valuables and they want their goods to be safe. They expect a facility to be well-lighted and fenced, with security cameras and keypads to control access to the grounds. Customers also want their valuables to be dry and, in some cases, they may want climate control for items sensitive to humidity and temperature.

Statistics reveal that 60 percent of self-storage customers are women. Female customers in particular dont want their valuables stored in a dingy, unattractive, uninviting place, so curb appeal and landscaping become important. There was a time when self-storage facilities were relegated to the wrong side of the tracks, but not today. Many are now in the midst of suburban neighborhoods or attractive business parks.

Know How to Reach Customers

You already know where your customers are located, who they are, and what they want. So how do you communicate with them? Conventional wisdom tells us the best way to reach prospects is through the Yellow Pages. After all, leasing a self-storage unit is an impulsive decision, and prospects dont want to spend a lot of time deciding where to rent. This is true most of the time, so the Yellow Pages are an important method of advertising. But there are other proactive ways to lure customers to your store:

• Direct mail is an efficient way to reach your customers and prospects. Its easy to identify your neighborhood ZIP codes and avoid mailing to addresses outside your market area.
• You may want to consider advertising in local radio spots, newspapers and magazines. These can range from reasonable to expensive, so choose wisely. The right venue will help build public awareness of your business.
• Billboards in your market area will help direct prospects to your location.
• Sponsoring the activities and events of schools and neighborhood organizations is smart public relations for your facility. Chamber of commerce programs, such as Business After Hours, can also be beneficial.
• By no means underestimate the importance of referrals from satisfied customers. Their unsolicited comments are a critical connection to new business for you. When your customers are happy, they will tell their friends.

Encourage your facility manager to set aside at least one day a week to personally visit prospects in the market area. Arm him with refrigerator magnets, pens or other collaterals printed with the facility phone number and logo to give away as a free gift. The shelf life of free items like these is amazingly long.

Know Your Products, Services and Competition

If you dont have competition in your market, youre extremely lucky. More than likely, you have a competitor or two. Thats why it is important to be aware of how you stack up against other facilities in your area.

Find out about their strengths and weaknesses, because they will quickly reveal your facilitys own. By making comparisons, you can eliminate your sites shortcomings and translate strengths into customer benefits. If your competition has longer office hours or offers RV and boat storage but your facility does not, consider making adjustments. You need to meet or exceed your competitors products and services.

Know How to Catch Every Call

You want prospects and customers to call your facility, and you want to make the most of every call. When your facility is closed or your manager is busy, you run the risk of losing potential business. Plus you may upset a customer who needs to talk with a person but gets voicemail instead. Statistics show only about 29 percent of callers will leave a message on an answering machine. This means 71 percent will simply call other facilities until they get a person the phone. Not only are you in the self-storage business, youre in the people business. When someone calls your store, he wants immediate response.

One way to avoid this problem is to hire a call center that will take all calls from prospects and customers, day or night. This service not only provides a live response to all callers and frees managers to do other things, it increases your chance to make the sale. Lost calls mean lost revenue. Some of the better call-center services guarantee hot leads and additional rentals every month for a fee based on the numbers they can actually deliver.

Properly marketing your facility is a sure-fire way of maintaining occupancy rates. More important, it sends a message to the customers in your area that youre not just a business but a part of the neighborhood and their lives.

Susan Head is vice president of sales and marketing for S&W Property Management LLC, which provides management and consulting services to self-storage owners. Ms. Head holds the same title for Phone Advantage, a division that offers an off-site rental source for facility owners. She can be reached at 888.817.9422; e-mail [email protected].

When you need a self-storage expert to consult on Yellow Pages advertising, who you gonna call? For the past 15 years, the answer has often been Peoria, Ariz.-based Michaels/Wilder Group. Though not exclusive to the self-storage industry, the consulting agency arrived on the scene storage-savvy, its principle players having spun off from MiniCo Inc. Over the years, the groups expertise has grown to include online Yellow Pages, Internet advertising, and other marketing and promotion strategies.

We know the industry as well as a lot of people who own storage, says Curt Ogieglo, vice president of operations. We bring that intangible, value-added quality. For instance, we know to talk to you about your unit mix and cap rate. We know what matters: service radius, occupancy, signage and frontage. If you dont have a good location, youll need more Yellow Pages advertising than if youre on a major thoroughfare. We put all that stuff into consideration when were telling you how to buy ads.

Yellow Pages

Michaels/Wilders pledge to clients is increased response and superior advertising programs. Yellow Pages know-how is an integral component of its self-storage services, due to the mediums paramount importance in the industry. A new facility can expect 60 to 80 percent of its revenue to be generated by the printed Yellow Pages; that number rarely drops below 50 percent for established facilities. Calculating the best bang-for-the-buck advertisement involves variables that differ from market to market.

Most self-storage owners recognize the confusion, complexity and expense of Yellow Pages advertising and seek assistance when coordinating their plans, Ogieglo says. Though purchasing ads through Michaels/Wilder is no more expensivein fact, the company offers discounted rates with more than 250 publishers of 8,000 directoriesthat isnt the reason to retain the agency. Owners want someone sitting on their side of the desk when negotiating with publishers, Ogieglo explains. If you need a bigger or smaller ad, Ill tell you that, and Ill tell you why. Our mission is not to sell Yellow Pages but to bring information to storage owners so they can make an informed decision.

The quagmire of ad buying includes design, placement and knowing which directory to use. Companies often purchase ads in multiple directories because they dont want to miss a call, yet a single publication may dominate the area. We know which books pull the most response, so the clients Yellow Pages budget will go down, or hell get more calls because he is making better use of his funds, Ogieglo says. In some cases, there is simply no prime space left in a regions key directory. Owners would be wise to investigate the situation before buying a facility.

One-quarter of all Michaels/Wilders customers are from the selfstorage industry. To qualify as one of the agencys Yellow Pages clients, an owner must operate in multiple states due to directory-publisher restrictions. The more stores you have, the more valuable our service becomes. If you have 50 stores, imagine trying to coordinate that with 100 different reps and trying to keep track of it all, Ogieglo says.

Online Results

The Internet has emerged as another key factor in self-storage marketing. Michaels/Wilder developed its Interactive division about four years ago in response to the industrys needs, including consulting for online Yellow Pages. Websites used to comprise 2 percent to 3 percent of self-storage revenue generation. Theyre anywhere from 10 percent to 12 percent now. Our interactive business was born because of our big storage business. We had to start supporting the industry that way, says Ogieglo.

Online Yellow Pages has proven to be a boon for self-storage, according to Ralph Knight of the Interactive division. Numerous sites offer online-directory services, which is where Michaels/Wilders intelligence becomes invaluable. The agency performs analysis of regional providers so clients listings reach their target audience. The same goes for pay-per-click campaigns. Clients have the option of guaranteed programs in which certain results are assured for various keyword programs.

Most of our storage clients say their clientele comes from within a certain radius of their facility, Knight says. On Google and Overture, for example, you can target your ads to only show up to people in those specific areas. For an extra fee, staff will also provide tracking, so operators know just how effective their campaign is with hard return-on-investment numbers.

Through website optimization, Michaels/ Wilder boosts a facilitys Internet presence. We make a website easier for the search engines to crawl through, Knight says. This means more search engines list the site in their top results; and being on the first page of search results increases the likelihood of being discovered by prospective customers.

Michaels/Wilders key to success over the years comes down to results. The agency talks plain sense to clients about how to maximize their marketing dollars. This sounds corny, but they trust us, Ogieglo says. We tell them what they should or shouldnt do, they believe us, and it works. Its that simple. Whether its good or bad, were going to tell them the truth.

Michaels/Wilder also has a group that specializes in the Hispanic market, offering translation services, search-engine registrations, direct-mail campaigns, and keyword use to maximize Yellow Pages and Internet search results for the Spanish speaking. The agencys Recruitment division focuses on helping employers advertise and promote opportunities to choice employees. For more information, call 800.423.6468; visit www.michaelswilder.com.

When clients deal with Anthony and Gerry DiMarco, they realize they are working with two people committed to the self-storage industry for the long term. The brothers are the principals of Security Mortgage Group, founded in 1989. Headquartered in Rochester, N.Y., the company offers financial services to clients nationwide from its home office.

Anthony, a Villanova graduate, has been active in the real estate industry since 1996. In 1997, he energized Security Mortgage Groups push into the self-storage industry and, since then, has closed loans on more than 125 institutional-grade properties. Gerry DiMarco Jr. joined the company in 1992. He received an MBA from the William E. Simon Graduate School at the University of Rochester, with a major in finance, and an undergraduate degree from Holy Cross, with a degree in economics and history. He has financed more than 250 multifamily and manufactured-home communities.

Gerry is proud of the growth the company has accomplished in just over a decade. Our lender relationships have grown deeper as our trust with our clients has grown stronger, he says. We have closed more than $2 billion in dealsnot bad for two guys.

Security Mortgage is a family-owned business. This is our livelihood, Gerry says. We take it very seriously and are always available. The companys mission is to work harder than anyone to make sure clients are treated properly. The brothers dedication to the company and its clients means they fight hard for customers, not big lending institutions. You will not be working with a back-office functionary to get your deal closed when you work with us. This distinguishes Security Mortgage Group from the competition, Gerry says proudly.

Meeting Industry Needs

The needs of small businesses are understood by Security Mortgage because it is also a small business, says Gerry. Although the company has only five employees, all are committed to providing self-storage owners with the best mortgage financing.

We realized many years ago that this was a very misunderstood property type, Gerry says. Self-storage has been ignored by many local banks and national life-insurance companies. We are tapping into nonrecourse, fixed-rate financing. This allows our clients to focus on managing their properties, not on interest-rate fluctuations. The company finds out a clients requirements, and then works to tailor a loan to meet those needs. Certain factors are pinpointed, including a no personal guarantee, low costs, fixed rates and amortizations.

Gerry assesses the storage industry as strong and vibrant. Though money should continue to flow into the business, there will always be consolidations and shakeouts for some who cannot make it. We believe locking in long-term rates at todays levels will ensure the lasting profit and competitiveness of our clients, he says.

The companys key business plan is to make sure customers know they are dealing with people who keep their word, who understand and act quickly on clients requirements. We do not want to be tarnished by the sub par culture of other companies, Gerry says. We advertise and attend many conferences. Most of our deals come from referrals and repeat customers. This is our proudest accomplishment. Our philosophy is to always be available, over-deliver on promises and make sure we understand the needs of our clients. For more information, call 585.423.0230.

All of us have had the experience of shopping for a car. It is one of the most frustrating, annoying and irritating buying experiences you can have. It also provides a great analogy for understanding important dos and donts in customer service, marketing and promotions.

Comparable models of premium car brands, like car-wash or self-storage facilities, may have a slightly different look and feel, but their amenities are essentially the same. So lets assume you have narrowed your vehicle search to Lexus, BMW and Mercedes. You visit each showroom and are greeted professionally in all cases. But when it comes to service, one of the dealerships goes beyond the norm.

Not only does the sales rep listen and ask insightful, probing questions, he introduces you to all the key people with whom you would come in contact during a sale. How refreshing! He really wants you to know the dealership desires your business and it would be easy to have a relationship with the company. In addition, he realizes the significance of the purchase and that its important for you to understand the mechanical side of service. He takes you to see the service department, introduces you to the manager and shows you how your vehicle would be received and delivered back to you: running well and clean as a whistle.

So, you visited all the dealerships, drove the cars, and were approached several times to make a purchase. Now youre ready to choose. All three vehicles will meet your needs and are in the right price range. How do you decide?

When Tom Peters wrote In Pursuit of Excellence, he told the story about how one automobile dealership outshined all its competition. It exceeded customers expectations from the moment they stepped foot on the property. Since youve just had a similar experience, you make your final decision based on service. The dealership gets the sale, and you get a great experience. Everybody wins.

Glossary of Terms

Now that we have an example in mind, lets define some important terms:

Customer service. Most of us associate the word service with a mechanical activity, something that occurs after the sale. Service actually begins the moment a prospect comes through the door, buys your product and becomes a customer. The relationship ends when the customer no longer uses your product. Do a great job, and there is no reason to lose. Customer service is truly a cradle-to-grave relationship.

Marketing. By definition, marketing covers all activities involved in the evolution of a product, from inception and design, to manufacturing, sales and service. Think of marketing like farming: It starts with a vision, then moves to planning, preparation of the soil, planting, harvesting, packaging, transporting to market, sales and, finally, service. Its pretty straightforward. The role of the marketer is to manage the product path and influence buyers through strategies that promote profitable sales to the company.

Promotions. Promotions are any activities you use that result in someone using your product or service. They run the gamut from low-cost, fun items to sophisticated allowances, discounts and expensive prizes. Promotions can be very beneficial as long as you understand three things:

1. Promotions bring someone to your door only once. To create a lasting relationship, you have to meet or exceed customer expectations time after time. Customers have very short memory spans.
2. Any strategy will work. There are few poor promotions, only ones that are poorly executed.
3. For a promotion to be successful, you must weigh cost against increased revenue. If you cant see the bottom-line impact, it probably wont be very successful.

Tying It Together

If we are striving to reach Tom Peters ideal of that very successful auto dealer, there are several things we can do in our existing car-wash or storage business that will enable us to deliver superior customer service. Here are a few:

• There must be a company vision based on service and an understanding of the customer-value equation that differentiates you from competition.
• All employees must embrace, understand and practice excellent customer-service habits.
• It must be understood that service is not synonymous with wrench-pulling. It begins with the first interaction between your company and anyone who inquires about you.
• You must constantly audit your companys performance and be committed to correcting any deficiencies.
• Employees must be held responsible and accountable for their actions.

Excellent customer service is self-promoting and grows sales, just as poor service decreases sales. One good experience will be shared with a few; one bad experience will be shared with many. Service reigns supreme. Think how those losing dealerships reacted when they didnt get your sale. Have fun creating an awesome service program!

Fred Grauer is the vice president, distributor network, for MarkVII Equipment LLC, a car-wash equipment manufacturer in Arvada, Colo. He has made a life-long career of designing, selling, building and operating car washes. He can be reached at [email protected].

 

I want to thank Inside Self-Storage for inviting me back as a columnist for 2005. I am honored to be able to share my Thoughts From the Road with you. Since beginning this column several years ago, it has been my goal to share ideas, concepts and the occasional off-beat thought with self-storage owners and managers. It is my hope that I might contribute in some small way to making your bottom line healthier in the year ahead and even provide personal motivation. I also appreciate the feedback I get from readers across the country.

Managers Schlepping Carts?

I want to share a family members experience to get facility owners to ask themselves: Are my managers assigned the right tasks? Several years ago, my sister-in-law took a position at a Wal-Mart in upstate New York. She quickly established herself within the store and, before long, became manager of several departments. Her areas started achieving record performance, and she earned store and regional recognition.

She admits the pay wasnt the greatest, but she had a great group of associates and a satisfactory working environment. Then things began to change. Schedules were cut and overtime became a four letter word. She found herself trying to do the same amount of work with fewer and fewer employee hours. Then the final straw was added to the camels back: The store manager called a meeting to discuss two new important tasks in which all department managers would be required to participate.

The first was line pushing, which involves using a portable barcode reader to scan a customers purchases in his cart while he waits in the checkout line. The customer then simply hands the printout to the cashier. This, of course, was caused by the stores refusal to hire more help. The second change was managers would be called on a newly distributed walkie-talkie system to go outside and gather carts from the parking lot. Remember, this was in upstate New York in February!

The message from Wal-Marts senior management was this was the level of importance at which they deemed their department heads. The sole focus was on the artificial bottom-line impact of a smaller payroll. Any thoughts of customer service and employee morale never seemed to enter the bean counter decision-making process.

I see self-storage owners across the country doing the very same thing with their most valuable resource: their employees. With a lack of a minimum-wage staff to handle facilities routine maintenance, I see managers devoting a significant part of their time to repairs and upkeep. Sure, everyone needs to pick up trash blowing around the site, but I would much rather have my senior manager making sales calls or dealing with delinquent tenants than running a leaf blower.

Take an objective look at your management operations and employee responsibilities. Could the addition of a part-time maintenance person improve morale and the bottom-line performance of your store? I believe the answer is yes.

Journey to Relaxation

Ill admit, years ago, I was an Atari Pong player, a traveler in the game Myst and even a Doom warrior. Those of us who have grown up with computer games have watched as they moved from very basic motion to full 3D animation. These days, the most popular titles seem to be oriented to some type of violence, unless youre a Sims Family addict.

I was recently introduced to a computer game that is a radical departure from anything I have seen in the past. My sister, Judy, has a neuro-biofeedback medical practice in our hometown of Buffalo, N.Y. Working with state-of-the-art software and hardware, she has achieved miraculous results in getting the brain to think in new patterns. She has even trained a number of professional golfers to achieve peak performance using her techniques.

Judy introduced me to The Journey to Wild Divine. Using a basic biofeedback system that attaches directly to your computer, the game measures your SCL (skin conductance level) and heart rate. Chapters in the journey introduce you to a number of relaxation events. By controlling your breathing and simply relaxing, you accomplish various tasks.

At first, I had a great deal of difficulty because I was trying to force things. As I learned to simply let go and concentrate on calming my thoughts, the tasks got easier. I am amazed by the activities the games programmers built into this innovative platform. It may not be for everyone, but if you are genuinely interested in finding a way to be more relaxed, this game may be worth the trip. You can visit the website at www.wilddivine.com.

The Year of the Handshake

I would like to make 2005 the Year of the Handshake for the entire self-storage industry. No, I wasnt able to get some type of proclamation or official government decree. But I know from my travels across the country and discussions with countless managers that we are not shaking peoples hands, even though greeting every prospect and customer with a sincere handshake as they enter and leave our offices will produce improved results, increased retention and higher closing ratios.

How can I make such a claim? While there are plenty of references and recommendations related to the etiquette of shaking hands, there is very little scientific research. Probably the most definitive study was led in 2001 by William Chaplin, a University of Alabama associate professor of psychology. He was assisted in research and authorship by Jeffrey Phillips, Jonathan Brown, Nancy Clanton and Jennifer Stein.

The study indicates that people with firm handshakes are generally more extroverted than are those with limp ones. Firm handshakes also make a better first impression. And its not just a guy thing. We found men had firmer handshakes than women, on average, but we also found women who had firm handshakes tended to be evaluated as positively as men, said Chaplin. We thought this finding was interesting because often when women have characteristics that are more similar to men, they tend to elicit a somewhat more negative evaluation, simply because its counter to the usual stereotypes.

Unless you regularly attend church services, there are very few social or business situations that provide opportunity to extend this most personal of gestures. You feel special when you walk into an office or store and the person you are about to talk to gets up out of his chair and extends his hand in greeting. Making personal contact in this manner adds significantly to the salutation, How can I help you today? It becomes a bridge, a personal link that subconsciously puts a customer at ease and gives him a sense that the person he just met really wants to help him.

Just like monitoring and tracking phone calls, appointments and leases, consider examining your handshake practices. See what a difference it makes. You may be pleasantly surprised that an activity that costs you nothing can produce such positive results. I look forward to shaking many hands at the ISS Vegas Expo in February.

Jim Chiswell is the owner of Chiswell & Associates LLC. Since 1990, his firm has provided feasibility studies, acquisition due diligence and customized manager training for the self-storage industry. In addition to being a member of the Inside Self-Storage Editorial Advisory Board, he contributes regularly to the magazine and is a frequent speaker at ISS Expos and various national and state association meetings. He introduced LockCheck, an inventory data-collection system, to the self-storage industry. He can be reached at 434.589.4446; visit www.selfstorageconsulting.com or www.lockcheck.com.

What is the current fascination with carwashing, a business that isnt glamorous or high-tech, but is capital intensive and requires a lot of effort to be successful? I think its the perception of ease: The industry seems easy to get into, easy to finance, easy to build and pretty simple to operate. But as with most perceptions, this one includes a real disconnect between what is real and what isnt. Car-washing is a very tough business, not suited for the faint of heart.

The physical real estate is one of the primary considerations when locating and choosing which type of car wash in which to invest, and it is particularly important in terms of total financial impact. Yes, carwashing is a vehicle of choice to pay for the real estate investment itself, but dont lose sight of the long-term objective: improving your asset base and net worth, the keys to which are real estate appreciation and sale of the business.

So what is the role of real estate, and how do you know your investment matches and fulfills its highest and best use? This old real estate adage insists that whatever you place on a site should return enough revenue, when capitalized, to support the value of the investment. The question is, how do you know when the revenue stream is correct?

Measuring Car-Wash Value

Each type of car wash has a relatively predictable revenue stream and expenses. You can therefore roughly determine if a particular site and facility type will be the highest and best use. Following is an example.

Lets say you found an ideal site candidate for a car wash. Youve determined a self-serve (wand or coin-operated self-wash) best fits your lifestyle and business modelminimal labor, all cash, nominal customer involvement, and you can keep your existing job until such time the investment takes priority. The site meets generally accepted rules of thumb (good ingress and egress, as well as demographics), and you know the community can support an additional six car-wash bays. You meet with the realtor and find out the site it is a permitted use and the planning board will support the business.

So far, youre doing great. You gather your information and put together a rough but telling set of numbers:

• Your land cost for half an acre at $10 per square foot is $220,000.
• Your estimated equipment cost for six bays at $30,000 a piece is $180,000.
• The cost for your estimated building and other site improvements is $200,000.
• Your total investment is approximately $600,000.

What about revenue? Youve discovered, through your research, that average car-wash revenue for your area is about $1,800 per bay per month, or $129,600 annually. You have also learned that a conservative number for variable expenses (heat, electricity, sewer, water, supplies and labor) is around 30 percent, or $38,880. Now youre down to $90,720.

After talking with your banker, you find out you need 20 percent down ($120,000) for the project, and it will be financed over 15 years. At a 7 percent interest rate, your annual loan payment is roughly $51,772, leaving you a net $38,948 to cover fixed expenses (debt insurance, real estate taxes, accounting, legal and advertising). Assuming your insurance costs about $10,000 and real estate taxes are about $12,000, youre left with $17,000 in profit. Considering you invested $120,000 in cash, the return is 14 percent.

Annual income (six bays @ $1,800/month)	$129,600
Subtract variable expenses @ 30%	-$38,880
Net before debt and fixed expenses	$90,720
Subtract debt ($600,000 - 20% down = $480,000)
@ 7% for 15 years	-$51,772
Balance for fixed expenses	$38,948
Subtract estimated costs for insurance and real estate taxes	-$22,000
Profit	$16,948
Estimated return on cash	14%

Thats not bad, but if you were looking for a minimum of 20 percent, youve missed the mark. Whats more important, if you were to capitalize revenue at 20 percent before fixed expenses and debt, it would only support an investment of $453,600, not the $600,000 it cost to develop the site.

In the example, it is obvious one or several of the numbers are off. The most apparent are land and revenue. To make the project more profitable, you either have to reduce the land cost, find a different site or change the revenue opportunity. The other thing you have to take into consideration is your exit plan, which is of major importance. You want to be sure the revenue stream will support your asking price with a reasonable amount for good will at time of sale.

Consider what would happen if the land cost were only $5 per square foot instead of $10. Your new loan payment would be $42,280 a year. With all other expenses staying the same, your new return on cash (with a reduction in real estate taxes and insurance to $16,000) is 33 percent. If you use the same capitalization formula as above, the cap rate is 18.5 percent, pretty close to a target of 20 percent.

The bottom line is you must match your real estate site and improvements with your revenue stream. Over or under invest, and you fail to recover your investment or get the correct value for your business. The key is working with knowledgeable vendors and being realistic in your expectations. You want to be happy, and your bankers want to know youre building an asset that will bring a realistic return for you and is well-covered for them. Remember, real estate is King and, therefore, the focus of real wealth creation.

Fred Grauer is the vice president, distributor network, for MarkVII Equipment LLC, a car-wash equipment manufacturer in Arvada, Colo. He has made a life-long career of designing, selling, building and operating car washes. He can be reached at [email protected].

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

---

Q: I am thinking about adding keypads at our facilitys gate. My concern is the amount of rain and wind we get. Are keypads safe to use in areas that experience bad weather, and what should we consider?

Cathy in Weymouth, Mass.

A: As rain doesnt always fall straight down and wind can force water through any opening, keypads need to be sealed to protect the circuitry inside. Outdoor keypads should have watertight keys, backs and hinges. Another thing to consider is the keypad stand and the wiring that runs through it. The conduit should slide through the center of the stand at least 6 inches to resist water. In some areas, ice can break conduit and short out wires. To avoid rust on the keypad housing, aluminum is a good choice. Finally, keep in mind that water is not the only reason to keep keypads well-sealed. I have seen hornet nests inside keypad housings, and while hornets and customers dont mix, insects are also not good for keypad workings.

Q: What are the potential problems involved with adding a music system to our facility?

Tom in Amarillo, Texas

A: Music is a great addition to any facility, as the speakers installed for this system can also be used for paging. The system can be set up in zones, which will allow you to control the volume or page in a specific area. Check the amperage requirements to determine how many speakers can be in each zone. Place speakers as high as possible to provide the best acoustics, but keep in mind metal buildings provide good bounce for sound travel.

The wiring for each zone can be daisy-chained to individual speakers, but as each speaker pulls power to operate, it will require wiring back to the receiver in the office. This means having a wiring path to upper floors and outdoor buildings. The wiring should be shielded to protect against interference, and outdoor speakers should be weatherproof. After the system is in place, your staff can fight over what kind of music to play!

Rod Davis is the installation manager for QuikStor, a provider of self-storage security and software since 1987. For more information, visit www.quikstor.com.