Like most businesses, self-storage operations aren’t immune to cyberattack. In fact, storage facilities can be prime targets for criminals who use customer information to empty bank accounts, steal identities and commit other fraudulent activities.

If yours is a small operation, or you have multiple sites, you may not be as vigilant as you should about safeguarding your software systems and data, unwittingly putting your business and customers at risk. The good news is you can help mitigate your vulnerabilities by staying educated on the latest scams, understanding how your operation can fall victim to cybercrime and applying risk-management best practices. Let’s look at the top threats you face, the cost of damage and recovery, how to respond if you’re breached, and the best ways to avoid becoming a target.

Top Five Cybersecurity Threats

In general, small businesses tend to be vulnerable to data breach for a couple of key reasons. First, they don’t believe they’re at risk. Second, they often lack the time, resources and technological know-how to implement safeguards. To make matters worse, it can take longer in a small operation to detect a breach once it occurs.

To protect yourself, you must first understand your enemy. Here are the five mostly likely cyberthreats you face as a self-storage operator:

1. Password attack. Often, an automated system is used to test multiple password combinations in an effort to gain entry to a network. A hacker can then access customer information and confidential payment data.

2. Malware. Short for “malicious software,” this infects a computer to disable a system, prevent user access, or steal sensitive or valuable data. It’s typically hidden in an email attachment, link, popup or Web page. The unsuspecting user downloads an attachment or clicks on a dangerous link, installing the harmful program.

3. Phishing attack. This is when someone masquerades as a trustworthy source in an attempt to bait a user and get him to surrender sensitive information, such as a username, password or credit card number. Think of it as robber convincing someone to let him into the house by simply knocking on the door and asking to come in! The three most common types of phishing attacks on small businesses are:

• Deceptive phishing: A user receives an email that claims to come from a recognized source, asking him to re-enter sensitive information or make a payment.
• Spear phishing: A user receives an email that looks legitimate and may contain information, such as a name, position, company or work phone number, designed to trick him into believing the sender is authentic.
• Pharming: A user is sent to a fraudulent website that looks legitimate. Most commonly, this is done by redirecting a URL to a fake website, though some pharming attacks involve clicking a link.

4. Ransomware. This is a malicious software designed to block a user’s access to his own computer system or files unless he pays a certain amount of money within a set time frame. Once stolen files are encrypted, there’s no technical way to fix the system other than wiping it clean and restoring it with backup data.

5. Man-in-the-middle attack (MITM). In this approach, also known as an “eavesdropping attack,” a hacker secretly puts himself between a user and a Web service he’s trying to access, allowing the criminal to filter and steal personal data. The MITM attack can originate from an email, social media or simply browsing the Internet.

What Cybercrime Costs You

If a self-storage operation falls victim to data breach, the cost to resolve and recover from the event can be staggering. According to the Ponemon Institute, a research center dedicated to privacy, data-protection and information-security policy, the average price for a small business to clean up after a breach is approximately $690,000—and that figure doesn’t consider the loss of revenue. Some of the more direct costs associated with a breach include:

• Notifying customers that a breach has occurred
• Hiring a third-party consultant to manage recovery efforts
• Communicating with data-protection regulators and other related parties
• Conducting a forensic investigation to determine the source and extent of the breach
• Paying fines and penalties imposed by the Payment Card Industry Security Standards Council, payment-card associations and the facility’s own financial institution
• Ongoing credit-report monitoring and identity-theft repair for affected parties
• In some cases, reissuing credit and debit cards to customers whose personal data was compromised
• Upgrading or replacing compromised computer systems, payment software and hardware, and servers
• Implementing additional security-monitoring services to ensure ongoing compliance with the Payment Card Industry Data Security Standard (PCI DSS)

Perhaps the biggest long-term consequence of a data breach is the loss of customer trust. In a competitive market, businesses must work tirelessly to build and maintain their brand integrity. Unfortunately, a single compromising incident can harm even the best of reputations, making it difficult for a self-storage operator to fully recover.

Consumers today are willing to share their sensitive information with businesses because they assume proper security measures are in place to protect them. When renting storage space, they trust you’ll keep their personal data and payment information safe and secure.

Operator Response

Once a data breach has been discovered, there are three steps you should take to help minimize the damage. It all starts with containment. Do the following as soon as you know you’ve been compromised:

• Disconnect the Internet.
• Disable remote access.
• Maintain firewall settings.
• Change passwords.
• Contact your cyber-insurance carrier.

Next, you need to assess the damage. Use the security data logs provided by your antivirus program, firewall and email provider to identify the source of the breach, the servers infected, and the network connection active during the attack. It’s also critical to determine who may have been impacted by the breach (employees, customers, vendors) and what information was accessed, such as names, addresses, emails, passwords, birthdays, credit card numbers and payment-account numbers.

Finally, you must manage the aftermath. Involve your cyber-insurance carrier and legal counsel to ensure that any notifications and follow-up actions are conducted in accordance with relevant statutes and in a manner that doesn’t create additional liability. Employees and staff should be given clear instructions on how to conduct operations and communicate with customers while recovery activities are underway.

When notifying customers, it’s important to be transparent and provide all relevant information. You may wish to set up a dedicated phone number or email address to ensure tenants can communicate with your business quickly and directly.

General Best Practices

The best medicine is prevention. You need cybersecurity best practices to ward off virtual threats. In fact, the best approach is a multi-layered protection strategy that includes the following:

• Establish a password-security and -management policy. Train employees how to create strong passwords that use a combination of numbers, letters and symbols. Require that passwords be changed at regular intervals (monthly, quarterly, etc.).
• Use a Web-based PCI-compliant software system and keep it updated. A Web-based facility-management system is a superior method of safeguarding data vs. storing information on a local platform where it’s an easier target for hackers.
• Protect your facility's wireless network. Change the default name and password of the router, disabling remote management, and log out of the administrator role once setup is complete.
• Maintain system integrity. Prohibit the connection of personal or untrusted storage devices or hardware to computers, mobile devices or networks. This includes USB drives and external hard drives.
• Back up and encrypt data in the cloud. This will allow you to automatically and safely store system data independent of your facility-management software.
• Implement multi-factor authentication. This might include using a rotating PIN in addition to a password to verify a user’s identity when accessing your company’s email or network. This provides an additional level of protection even if a user’s password has been compromised.
• Control access to your facility’s network. Establish procedures that limit employee access to only what’s needed to perform a job. Create a process to immediately revoke user access and change passwords when an employee exits the company.
• Establish a recovery plan. After a cybersecurity incident, it’s important to begin your efforts as soon as possible to resume normal business operation. A plan helps map and expedite the process to restore and resume services more quickly. 
• Purchase cyber insurance. This is a critical component to cybersecurity management. It covers first- and third-party costs as well as business-interruption expenses if a breach forces a business to shut down. Specific coverages include notification expense, crisis management, regulatory investigation expense, data-breach liability, content liability, data loss and system damage (data restoration), data extortion, and business interruption.

Be Prepared

A cyberattack can have a serious negative impact on a self-storage operation. Staying informed on key issues and regulatory changes is important to understanding potential risks and any business obligations. Implementing best practices and safeguards can make it much easier to prevent and detect a security issue and help facilitate a speedy recovery.

Michael Attanasio is vice president of professional liability for Phoenix-based MiniCo Insurance Agency, a provider of specialty insurance products and publications for the self-storage industry since 1974. He manages the company’s cyber-insurance program. For more information, call 800.528.1056; email [email protected].

The Arizona Self Storage Association (AZSSA) is passing its 25-year milestone. Founded in 1996, the organization was created to present a unified voice on issues affecting industry professionals in the state. It now has more than 400 operator and vendor members representing 600-plus businesses, according to a press release.

The AZSSA was launched by a group of operators who wanted to share experiences. Self-storage was a fairly new concept at the time, said Richard Marmor, who served as the association’s first president. Early members included Bill Alter, Allan Bulman, Howard Hansen and Terry Kutzbach. They first met at Kutzbach’s office in downtown Phoenix. “It was quarterly meetings for the first couple of years. Bill always came with Oreos and soft drinks,” Marmor said.

The meetings evolved over the next two years as members sought to educate themselves on important issues and connect with other industry professionals. “It occurred to me to finally ask whether we should consider incorporating as a trade association, so a committee was created,” Marmor said. “We created an outline of ideas of what a trade association could do, such as industry image improvement, networking, legislation, resource development, operator education and standards of conduct—12 major topics in all.”

The Greater Arizona Mini Storage Association was then born; the name change came in 2006. As it grew, so did its mission to help members through critical business problems.

“Our vision hasn’t changed much over the years,” said Chris Rudel, former president and current board member. “As an organization, we have adapted to all the technology and information changes—for the better. While our industry has changed, [AZSSA] has always helped smaller facilities stay informed and remain profitable. From very early on we have always worked together.”

The association’s first tradeshow took place in 2000. That event has since become an annual occurrence that includes a conference and golf tournament. This year, it’ll happen Sept. 22-23 at Wild Horse Pass Hotel & Casino in Chandler, Ariz. Show organizers will try a new hybrid model in response to the coronavirus pandemic, with exhibits in one room and networking stations in another. AZSSA also hosts educational webinars for members.

The associations “superpower” is its ability to defend the industry in the legislative and regulatory arena, according to Anne-Mari DeCoster, who served as executive director for 10 years and is now a board member. Its accomplishments include modernizing the state’s lien laws, which provided a blueprint to help other state self-storage associations to push for reform. Through legislative campaigns, defensive interventions and departmental intercessions, AZSSA has proactively changed laws, worked to prevent or amend bad laws, and correctly interpreted storage law for state government agencies 19 times, the release stated.

Self-storage has become more sophisticated and competitive, particularly in the advent of technology. Add to that, our customers have an extremely on-demand mindset. They want what they want when they want it. When they’re ready to rent a unit, you need to meet them on the platform they prefer, whether it’s in person, over the phone or online. They might want to communicate via email, text or chat. They may reach out via your website, social media, call center or kiosk.

Wherever your customers seek to do business with you, that’s where you must be. You have to adapt to the ever-changing market, or fall behind. If you don’t occasionally disrupt your processes and systems to adjust and improve, a competitor will gladly take your place.

When it comes to self-storage sales, flexibility is key, but so is follow-up. Prospects no longer have patience. When someone reaches out to you with an inquiry, you need to respond—and quickly—via a method with which he’s comfortable. When a new customer rents with you, it’s important to extend a welcome and provide any assistance or information he needs.

Following up is an art, one that’s become critical to self-storage success. Here are three strategies to help you excel and close more sales.

Lower Your Response Time

The most important element of self-storage lead follow-up is a fast response. Once an inquiry, reservation or rental comes in, it’s imperative that you contact the customer right away to thank him for his interest or business and answer any questions he might have. Here’s how it works:

• A response within five minutes is impactful.
• A response within 15 minutes is professional.
• A response within 30 minutes is mandatory.

That’s all you’ve really got: 30 minutes or less. The faster you are, the better you and your business will be perceived. Responsiveness begins to build trust and confidence in you and your brand.

Get Contact Information

Your website is among your strongest platforms to engage with customers. People can ask questions, make reservations and perhaps even rent a unit there. Using an online form or process, it’s easy to field inquiries and gather customer contact information, all of which should automatically be entered into your customer-relationship-management (CRM) software. With an automated alert to facility staff, follow-up is a snap.

Though contactless transactions are becoming more common, there are still customers who will simply stop by your self-storage facility or call. Nine times out of 10, if you properly handle the sales presentation, a customer who visits will rent with you. The phone is a bit more challenging. In either case, if the prospect isn’t ready to reserve or rent a unit, you have one primary goal: Before you let him walk out the door or hang up, get his name and contact information, so you can follow up!

If the customer doesn’t want to provide a phone number, ask for an email. If he’s still reluctant, a small enticement can help. For example, tell him you’d like to send a discount offer.

If a prospect initially reaches out to you via email, you’ve already got some of his info, which is great. As always, answer as quickly as possible. If he provides a phone number, it’s best to call; if not, simply respond to the message. You should have a basic email template that answers common questions, highlights your facility features and explains why your business is different (better) from competitors. It should invite the customer to call or visit. Lead him with a positive, guiding question such as, “Are you available this afternoon, or is the weekend better?”

Close the Loop

Once you have a prospect’s info, immediately enter it into your CRM platform and send a text or email to thank him for his interest. Say you look forward to earning his business. Within 24 to 48 hours, always being respectful of the customer’s time, reach out again via his preferred communication method to see how you can help further. For example, you might say (or write) something like:

Hi, Joe. This is Garrett with XYZ Self-Storage in Smithville. I don’t want to take up too much of your time, but you inquired about renting a unit on Monday. I wanted to follow up and see if your self-storage needs have been met, or if you have any questions I can answer.

When a reservation comes in from your website or call center, enter the info into your CRM software, and then text or email a thank-you message. Include the customer’s proposed move-in date and directions to your facility. Set reminder for yourself to follow up the day before move-in to confirm his arrival time. If you have the ability, offer to complete the rental over the phone and send him a digital lease for signature.

In the case of a completed rental from your website, call center or kiosk, the follow-up process is much the same. Immediately reach out to the customer and thank him for his business. This is crucial! Confirm that everything went smoothly and that he received his email confirmation. Verify his move-in date and invite him to stop by the office for a complimentary bottle of water or cup of coffee when he’s on site.

Practice Your Art

“Speed to lead” is critical to sales success in today’s competitive self-storage environment. You must engage your customers quickly and personally. Take good notes on every prospect so you can align your product to his needs. Try to learn what he plans to store, when he needs a unit, if he’s ever used storage before, etc.

Follow-up is the key. Respond quickly to inquiries, reservations and rentals. Gather contact and other information. Finally, close the loop with good communication. Use the above strategies plus the tools at your disposal to close every sale, no matter its source.

Garrett Byrd is the franchise director for Storage Authority LLC, which offers a self-storage franchise model. He has more than 20 years of experience in real estate and self-storage management. To reach him, call 941.909.7222, or email [email protected].

The Northern Nevada self-storage market has recently benefited from increased demand due to factors stemming from COVID-19 and an influx of former California residents and business owners seeking relocation. “We do get a lot of out-of-state people coming in. We have a lot of California residents coming up and renting, and it looks like it’s increasing this year,” Deana Cain, manager at Silverado Self Storage in Northwest Reno, told the source.

Factors related to the health crisis include local businesses seeking storage for equipment and supplies after downsizing or closing office space. Residents who have switched to remote-working environments have also sought storage after decluttering homes to clear space for home offices, the source reported. Other drivers include business startups seeking somewhere to store inventory, and residents who have cleared out their garages in favor of a home-gym setup.

“We haven’t seen any slowdown because of the pandemic,” said Todd Whear, owner of Stor-All, which operates five facilities in Northern Nevada. “For temporary storage, people tend to move and store when they’re in transition a lot more during these times. We found that demand is actually greater than ever.”

Stor-All saw its revenue increase 5 percent last year compared to 2019, and the company is in the process of adding up to 400 units at its Dayton and Gardnerville, Nev., locations. Those projects are expected to be complete by year-end, Whear told the source.

There’s also been new-development activity in the region. Reno-based Mardian Development Co. is building a 724-unit facility for Our City Storage in Reno. The property at 2975 Northtowne Lane will comprise 104,000 square feet of storage space. It’s expected to be complete by early April, according to Mike Mardian, owner of Mardian Development.

“As our economy continues to grow, so will self-storage,” Mardian said. “And it always depends on the area, that’s very critical. For us, it’s a business model that we certainly are enjoying.”

Source:
Northern Nevada Business Weekly, California Exodus, COVID Impacts Aid Northern Nevada Self-Storage Industry Growth

Multi-Housing News (MHN), a media brand specializing in residential real estate news and analysis, has published a list of the top five U.S. self-storage markets based on investment volume in 2020. The list was compiled using data from Yardi Matrix, the self-storage data-services platform offered by management-software provider Yardi Systems Inc. The recognized markets, in order of rank, were New York City (NYC); Atlanta; Tampa, Fla.; San Diego and Phoenix. Together, those metropolitan areas accounted for more than 25 percent of total activity.

More than $3.6 billion in self-storage transactions closed nationwide during the year, which is a slight decline from the nearly $4 billion in deals logged in 2019. Though overall investment activity was down year over year, some markets experienced pent-up demand as a result of the coronavirus pandemic and drew increased interest from investors, MHN reported.

NYC deals topped more than $615 million last year, a 34 percent increase from 2019. In all, 23 self-storage properties comprising more than 1.8 million square feet were sold. The average price per square foot was $328.90, up from $247.70 the year prior. The most notable acquisition in the market, according to MHN, was by self-storage real estate investment trust CubeSmart, which acquired an eight-property portfolio from Storage Deluxe for $540 million.

Atlanta ranked second with 19 facilities selling for $147.9 million. Those properties comprised more than 1.6 million square feet. Both metrics were substantially higher than in 2019, when properties comprising 933,000 square feet sold for about $95 million. CubeSmart also made the biggest investment in the Atlanta area last year, acquiring four properties comprising 379,662 square feet, MHN reported.

Tampa rounded out the top three, with $137.9 million in trading volume. Those deals reflect 16 properties comprising 1.28 million square feet. Overall, investment activity in the metro area was down from 2019, when 23 facilities sold for nearly $159 million.

San Diego ranked No. 4 on the list with $128.8 million in self-storage sales, though the 698,508 square feet reflected in those deals trailed fifth-place Phoenix, which saw more than 1.17 million square feet change hands. Trading volume in Phoenix was $126.4 million.

MHN is an integrated resource for executives and companies that own, manage, invest in or develop multi-housing real estate. Its coverage includes news, information and analysis on several types of property, including affordable housing, luxury and manufactured communities, senior and student housing, and self-storage. MHN is an affiliate of Commercial Property Executive, a media brand specializing in commercial real estate news and analysis. Both are owned by Yardi Systems.

Source:
Multi-Housing News, Top 5 Self Storage Markets for Transaction Activity

A tiered pricing approach is becoming more popular in the self-storage industry. Have you considered all the powerful reasons why your operation should adopt it? Value pricing not only fuels facility growth and increases revenue, it’s a way to counter competitor pricing and change the psychology of the online rental process.

How It Works

With the tiered pricing method, also known as “good, better, best” pricing, an online self-storage renter sees a range of pricing options for similar units. The rates go up as the unit becomes more desirable. For example, a typical 5-by-5 might be listed at $25 and displayed as the “good” option. The “better” choice is the same size but closer to the elevator, making it easier to access. That one might be $35 per month. The “best” option, which is near the elevator and a security camera, is listed at $42. The buyer has the option to pay more for the features he finds most valuable.

One way to optimize this process for renters is to present these options in a 3D map that shows each size and location, with units displayed in different colors based on their tier. Users should be able to rent directly from the map and filter units by value-add features. The prices are dynamic and can easily be adjusted based on facility demand. Descriptions can also be added to each unit type to provide more details.

The Benefits

By offering tiered pricing, not only will your self-storage facility capture online prospects who are interested in renting with you, you’ll be able to satisfy the needs of a diverse customer base. Those renters who are price-sensitive will opt for the “good” option. Those who want a more upscale choice and are willing to pay more for desirable unit qualities, such as location and climate control, will choose “best.”

This approach also eliminates the need for one-off discounts and special offers. Anyone who wishes to pay less can clearly do so. If inventory is limited at whatever tier a customer desires, then he’ll feel more urgency to complete the transaction.

Value pricing also allows you to better compete in your market. If competitors haven’t adopted this approach, their online rental tool will only display one price for each unit size, regardless of its features and benefits, and they’ll be at a disadvantage.

Finally, tiered pricing makes it easier and faster for prospects to make a self-storage rental decision. When you give them clear, well-defined options, there’s less need for them to compare multiple facilities. They won’t waste time trying to figure out how your 5-by-5 compares to others. Once they see and know what they want, the decision becomes simple.

Not convinced? Imagine this: You’re driving to work and decide you’d like to pick up some coffee. There are two shops on the way, not far from each other, and they both serve essentially the same stuff. One clearly advertises the option to add vanilla syrup for 50 cents more or to upgrade to a latte for just a dollar. The competition offers different flavors and styles, too, but doesn’t make its options clear. You don’t have time to figure it all out while sitting at the drive-through window. Having faster, simpler choices makes it easy to pick one store over the other.

The Renter Mindset

The most unrecognized and misunderstood benefit of tiered pricing is how it positively impacts the self-storage customer mindset. Showing the buyer that he can have the best of all choices for just a small increase in spending, plus the very clear advantages of doing so, encourages him to go for the top level.

Think about the last time you booked a hotel. If you have the option to upgrade from a room facing the parking lot to one with an ocean view for just a few more dollars, you’re probably going to grab it! When you take a flight, paying premium will get you a better seat. In golf, it’ll get you a better tee time. By labeling your self-storage units good, better or best, you can leverage the same psychology. It gives the renter a sense of empowerment and increases his purchasing confidence.

Tiered value pricing has already been adopted by several industries and will continue to be implemented as more people move toward a digital buying experience. Using it as part of your self-storage operation can help you attract more customers, boost your revenue and set you apart from competitors. It also makes your online renters feel more confident, and make quicker buying decisions.

Kodi Churchill is the marketing manager for The Storage Group Inc., a digital marketing firm that provides website development, search engine optimization, pay-per-click advertising, reputation management, software development and more. She’s responsible for the planning, development and execution of all content, email and inbound marketing. She also manages social media creation, company site updates and marketing software. For more information, call 407.392.2328.

SmartStop Self Storage REIT Inc., which operates facilities in 19 U.S. states and Toronto, announced that Michael McClure will be retiring as CEO, effective April 15. Company founder and executive chairman H. Michael Schwartz will reassume the role, which he last held from 2007 to 2017. McClure will remain available in a consultant capacity for one year following the transition, according to a press release.

During the 13 years that McClure spent with SmartStop and its affiliated companies, the operator’s presence grew to 150 properties totaling 11.4 million rentable square feet throughout North America. He was also instrumental in the subsequent sale of Strategic Storage Trust Inc., also known as SmartStop Self Storage Inc., to Extra Space Storage Inc. in October 2015.

“I would like to thank the entire organization for their dedication and hard work, allowing us to make SmartStop what it is today,” McClure said. “I am proud of the executive team we have built and all we have accomplished, and expect SmartStop to continue expanding and serving customers.”

“Mr. McClure has been an excellent leader and instrumental in SmartStop's success over the last 13 years, utilizing his nearly four decades of real estate and finance experience,” Schwartz said. “We are thankful for Mr. McClure's service as CEO, and look forward to continuing the work of establishing SmartStop as the premier self-storage company in North America."

SmartStop is a self-managed real estate investment trust. Through its indirect subsidiary SmartStop REIT Advisors LLC, it sponsors other self-storage programs, including Strategic Storage Trust IV Inc., a public non-traded REIT. It has approximately $1.7 billion of real estate assets under management.

Source:
PR Newswire, SmartStop Self Storage REIT, Inc. Chief Executive Officer Michael McClure to Retire

Self-storage operators do their best to provide top-notch customer service to every tenant, every day. Those with a nurturing personality, however, sometimes find themselves in helicopter-parenting mode. While this isn’t always a bad thing, there’s a fine line between helping and hovering. How do you know when you’re about to cross it? And when is it OK to do so?

In this thread on Self-Storage Talk, the industry’s largest online community, members are sharing times when they’ve felt the need to impart wisdom to customers, particularly the younger ones. They’re also discussing why a bit more involvement with tenants up front might prevent problems down the road. Is “parent” sometimes a hat you wear as a self-storage operator? Share your thoughts in this thread.

Inside Self-Storage (ISS) has opened voting for its 2021 Best of Business reader-choice poll, in which self-storage professionals identify their favorite product and service suppliers in 40 categories. Voters can choose their preferred companies in categories such as Best Call-Center Services, Best Lender, Best Manager Training and many others.

Voting is open through March 31. Participants can vote one time in as many categories as they wish after verifying their email address.

The results of this year's campaign will be published on the ISS website in July. The winners will also be featured in the August edition of ISS magazine. The winning companies from previous campaigns can be viewed on the ISS Best of Business page.

For 30 years, ISS has provided informational resources for the self-storage industry. Its educational offerings include ISS magazine, the annual ISS World Expo, an extensive website, the ISS Store, and Self-Storage Talk, the industry’s largest online community.