Many of these technologies were developed to provide additional security and make tenants feel better about renting from you. The newest products, such as self-service kiosks and Internet-reservation systems, are aimed at reducing the largest adjustable expense of the storage businesspayroll.

While change is good, its not always easy. Sometimes it feels like you need an advanced degree in technology to make everything work together. My goal with this article is to help you see the light at the end of the tunnel and the benefits you can reap by linking various technologies together.

The First Links

Lets start with an easy connection youve probably already implementedyour management software and gate system. Most management software now comes with builtin gate/security interfaces that automatically share information between the two systems. By linking a keypad outside your facility with your software, you can record tenant visits and lock out delinquent renters.

So far, its not rocket science, but you can see how linking just two technologies can be of benefit. Lets add security cameras. Alone, they help prevent vandalism and discourage theft. But with an integrated pinhole camera in your gate keypad, you now have a picture of each visitor as he arrives. Connect a second camera to scan license plates and you know the vehicle he is driving. Suddenly, you have a lot more information to give police in the event of wrongdoing.

Lets keep going. Recent developments in door alarms let you know when unit doors are opened and closed. If we hook our door-alarm system to our management software, gate system and security cameras, its now possible to know what time John Smith entered the facility, when he opened his unit, when he closed it, and if he attempted to open any other units before driving out in his late-model Ford with license-plate number XYZ123.

The Next Tie

With our facility secure, lets take a look at how linking technologies can help us better serve customers and make more money. Put yourself in your customers shoes. What are the three ways prospective tenants interact with your facility? They stop by in person, call you on the phone or view your facility on the Internet.

Until recently, they tended to do this during daylight hours when your manager was around. But then banks started using ATMs, grocery stores started staying open 24 hours, and even Wal-Mart started selling over the Internet. Pretty soon, people expected to be able to rent storage units at their conveniencethe nerve! Dont they know it costs money to have someone working 24 hours a day?

With payroll expenses already averaging 39 percent of overall operating expenses, storage facilities have turned to technology. Call centers answer potentially missed rental inquiries, websites assist with online reservations, and self-service kiosks help walk-ups when a manager isnt around. Lets look at each technology a little closer and see what happens if we do some integration work.

Call Centers

So the phone rings, and your manager doesnt answer; but your call center cheerfully takes the call. With a live prospect on the phone, how does your call center know what inventory you have available? And if it makes a reservation for you, how will you know about it? Well, you could fax or e-mail your price list before your manager leaves each night, and likewise receive a fax or e-mail about any rentals in the morning. But this seems labor-intensive and prone to error.

What if we link the software your call center uses with your management software? This would mean reservations are placed directly into your database, and your manager doesnt have to spend the first part of each day doing data input. Sound better? Sure, but its only half the answer. The customer still has to come into the office to sign the rental agreement and show identification. Stay tuned while we look at some other technologies.

Internet Reservations

More and more people are using the Internet to do their shopping, whether at work during the day or at home in the evening. Whatever the case, wouldnt it be nice to connect with these potential customers? So you build a website (if you havent already) and create a rental form for customers to fill out if they want to rent a unit online.

Now when a customer goes to your website, he completes the form, perhaps even plugs in his credit-card information, and bingo! He gets an order number. Yes, I said order number, not unit number. How come? Because your website isnt linked to your management software, so it cant display current inventory. And if you have taken the time to link the two, you still need the customer to come into the office so you can record his identification information and hand him a rental agreement. Consequently, your manager has to call the customer, hopefully talk to him instead of playing phone tag, and set an appointment time that works. This doesnt sound very convenient for either party.

Self-Service Kiosks

A prospective customer visits your facility, but your manager isnt there to greet him. Perhaps he called in sick, or hes on the property with another customer or cleaning out a unit. Perhaps its the evening or a holiday. Recent kiosk advances are allowing storage facilities to worry less about these problems. Just like an ATM, self-service kiosks wait patiently in the wall outside your facility and help customers rent units, make payments and perform many other activities on their own.

This sounds too good to be true! Thats because it is. Unless your kiosk has a realtime interface to your management software, it cant know current unit availability without some convoluted, manual data entry. Luckily, kiosk vendors are now working closely with management-software companies to integrate their technologies. A quick call to your software vendor can tell you which kiosks will work in your environment.

The Integrated Approach

Because call centers, management software, access-control systems, Internet reservations and kiosks all have some limitations when used independently, lets see what happens when we link them together. The results may surprise you. If done properly, your facility can be operated more profitably, perhaps even without a full-time, on-site manager.

With everything linked, when your call center answers the phone, it can see from your management software that you have five units available, take the reservation, and give the caller a confirmation number. The customer then proceeds to your facility at his convenience. Once there, he can complete the rental process with your manager or on his own at your kiosk, where he simply enters his confirmation code.

The kiosk finds his reservation in your management software, takes his photo and fingerprint, updates your software, and requires him to swipe his credit card. The customer confirms he has read the lease agreement and is even able to purchase a lock from the vending dispenser. The transaction ends with the kiosk printing a rental contract, facility map, and appropriate gateaccess code from your management software, which is tied to your gate interface.

Using the integrated approach, Internet reservations work in a similar fashion. When a customer visits your website, he can see your real-time inventory. When he makes his reservation, it goes directly into your management software, and he receives a confirmation number that can be used by your manager or kiosk to complete the rental process.

Finally, if a brand-new prospect walks in off the street and your manager isnt available, he can use your self-service kiosk to complete the entire rental process on his own. The kiosk captures all of his information, stores it in your management software, and prints out the appropriate paperwork and gate code.

There is light at the end of the technology tunnel. Using an integrated approach can reduce facility costs while improving customer convenience and sales. The challenge I present to all self-storage vendors is to invest time and resources in making their products work together seamlessly and in real time. By linking technologies, we can make storage facilities convenient to use and more profitable.

Curtis Sojka is vice president of marketing for OpenTech Alliance Inc. Through its Alliance Partner Program, the company promotes cooperation between industry vendors to develop and support interoperable solutions. OpenTechs patented, full-service kiosk, INSOMNIACTM, significantly reduces facility management costs, improves customer service and helps increase revenues. For more information, call 480.235.4528; e-mail [email protected]; visit www.opentechalliance.com.

One of the most critical components of a well-run facility is its management software. There are numerous choices in this arena, as more than 20 companies offer what appear to be solutions. How does a business compare the value of a software product when pricing varies so dramatically? The uninformed buyer will assume all software provides the same benefits to every user. While specific package features can increase appeal and, consequently, catch the eye of an owner/decision-maker, they are often relatively useless to the everyday user. Management software that provides more intelligent choices for users brings significant long-term value.

What Comprises Costs?

There are several reasons software is sold for many times the cost of raw materials. Most consumers understand software has an initial development outlay; and monthly advertising, tradeshow exhibitions and direct mailings all add to its selling price. Beyond these fees, there is the additional labor of providing after-sale phone support, bug fixes and regular program enhancements. These latter costs can vary dramatically, based on the quality of service and staffing offered by the development company.

The buyers costs will ultimately include such things as initial license fees, installation, training, support/maintenance, license upgrade fees, transition (i.e., data transition and/or transitions to upgrades), and any necessary hardware. Beyond these components are less-obvious considerations: Does the software provide critical controls for theft-prevention? Does the program allow for efficient methods of communicating information to and from remote locations? If the answers to these questions are unclear, you may end up spending two to three times the anticipated amount, either in revenue loss or software replacement.

Overheads for training and retraining are another product differentiator. As data for this industry becomes more complex, some benefits of the software alleviate the need for extensive supervision, such as easily transferable information, and doing away with manual calculations or other intricate maneuvers. Simple entry combined with robust functionality is the key.

Shopping on Price

Price is a better indicator of quality for selfstorage management software than it is for general-purpose packages. Some assumptions can be safely made concerning what to expect from low-cost vs. expensive products.

Perhaps the greatest attraction of low-cost software is the price itself. If an inexpensive option did not exist, many small facilities would not be able to enjoy the benefits of entry-level automation. Of course, low-cost software does have drawbacks. Inexpensive packages will generally not include customization, security features, or methods of communicating with a central home office.

Another common disadvantage of less expensive software is a lack of documentation. The creation of a first-class users manual, complete with tutorial, subject index and examples, is a major effort. Many low-cost programs come with a manual that covers only the bare essentials to run them. These guides usually have little or no graphic material, and rarely explain how the program calculates results.

More expensive software can be expected to provide advanced capabilities, an attractive user interface and excellent documentation. Sophisticated features almost always mean some complexity; however, quality software has added development time to hide it. Power and flexibility in a program do not necessarily indicate a trade-off with simplicity. Surprisingly, expensive software can be more straightforward than low-cost programs. Although the owner/decision-maker may have to spend more time deciding how to use the software, the daily manager should find all functions to be faster and easier.

Final Valuation

As with all purchases, a company wants software that meets as many needs as possible and provides the best overall value. Software valuation is highly individualized, primarily influenced by specific needs and affordability. If a vendor can show a significant number of happy customers have paid a certain price for a program, you can be more confident of your purchase, regardless how high the price may sound initially.

Most important, a buyer has to understand what he expects from his software. In addition to the price tag, a thorough, company specific examination of how the program will be usedby whom and for what purpose is crucial. These kinds of questions should bring consumers much closer to the true cost involved in making one of the most important buying decisions for their self-storage businesses.

Andrea Medina is the vice president of business development for DOMICO, which has provided management and accounting software to the self-storage industry for more than 20 years. For more information, visit www.domico.com.

When a storm damages the roof of your storage facility or someone is injured on your property, you may be faced with an insurance claim. That is not the time to learn how to file one. Losses can be difficult, but there are steps you can take to speed the claims process and get your facility back on track. Following are some suggestions for filing insurance claims.

Property Loss

The first thing you should do after a lossand most business insurance policies require thisis take immediate action to protect your property against further damage. Depending on the circumstances of your particular loss, this might include calling a public utility to shut off the power to your premises, as in the case of flooding.

Assuming your claim is covered, the cost of any emergency measures should be picked up by your insurance company. It is, therefore, important to keep your receipts for repairs. Of course, if a loss forces you to evacuate your premises, you should notify the police department, especially if you are leaving your facility unlocked and unattended. Document all activities with photos, security videos and other evidence pertaining to the incident.

The next step is to create an inventory of any items that have been lost, stolen or damaged. This serves two purposes: It can help you generate an action plan for getting your facility back in operation and can greatly speed up the processing of your claim. Seeing the destruction of your business and personal property can be traumatic, especially in the case of a fire; but remember you should not dispose of any damaged goods until your claim has been fully investigated by your insurance adjuster.

Finally, get in touch with your insurance agent or broker as soon as possible after a loss. The more quickly he is contacted, the sooner your claim can be processed. Advise him of any loss or damage. In situations where you need to evacuate your premises or have lost access to public services, give your agent or broker a telephone number where you can be reached. Try to avoid discussing the circumstances of your claim with anyone except your agent or brokerdoing otherwise may put your claim in jeopardy.

Liability Loss

Liability losses involve damage to someone elses property or injury to a person on your premises. If someone is injured at your facility, call for medical attention immediately and notify your insurance company. This may be a requirement of your policy. Liability claims are settled based on negligence, the failure to use the amount of care considered reasonable in a particular situation.

Get names of all witnesses and their statements about what happened. If the accident was a result of a permanent and dangerous condition on your property, fix it immediately. If theres a recurring accident, youll be even more likely to be held responsible. As with property claims, it is important to document all activities with photos, videos and other evidence pertaining to the incident.

Filing Your Claim

For your loss to be considered by your insurance company, you will need to file a claim report. In most cases, your insurance agent can complete the report for you over the phone; although, in some instances, you may be required to file the form yourself. If possible, support your claim with photos or video of your property, before and after the loss or damage.

Give your agent or broker copies of all police and/or fire reports, repair receipts and other pertinent documentation. Once you have reported your claim to the agent or broker who represents you, he will immediately contact a claims adjuster, who represents the insurance company. While most claims are settled promptly and fairly, some are more complicated and may require some interaction on your part. In such cases, the claims adjuster will work with you to help resolve the claim to your satisfaction.

When your claim is settled, the amount the insurance company pays out to you might be subject to a deductible. Choosing a larger deductible allows the insurance company to charge a smaller premium, since you have agreed to pay a larger share of any incurred damages. Most self-storage owners choose a $1,000 property deductible on their insurance policies. You may want to check with your agent or broker to see how much you can save on your annual premium by choosing a larger deductible. No matter how large or small your selfstorage facility, adequate coverage is essential for protecting your business and your peace of mind.

This article was written as a guideline to minimize risk in self-storage facilities. The information is intended to be of general interest and does not address the circumstances of any particular individual or entity. Nothing in this article constitutes legal advice, nor does the information represent a comprehensive statement of the issues discussed or the laws relating thereto.

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, call 800.844.2101; e-mail [email protected]; visit www.vpico.com/universal.

I recently did an experiment: I called more than 50 storage facilities after business hours to see what kind of outgoing message I would hear on their answering machines/voicemail systems. I mostly encountered a lack of professionalism outgoing messages seemed to be an afterthought. Many didnt include the essential elements of good communication.

Whats the purpose of your phone message? If you didnt respond to sell more units, youre answer is incorrect. The majority of outgoing messages I heard went something like this: Thanks for calling ABC Self Storage. If youve reached this message, were either on the property or gone for the day. Leave a message and well call you back. But a message canand shoulddo more to assist your sales effort. Heres how.

Voice and Message

There are two components of your outgoing phone message: the voice you use and the content you deliver. First, lets talk about voice. Since the majority of renters (or those making the rental decision) are women, use a womans voice. It should sound professional, be easy to understand and use an accent from the local area. Although many people are enamored of a sexy British accent, your message should not sound like it was recorded by James Bonds secretary. Instead, find a local woman who has good diction and whose speech pattern wont intimidate callers.

In terms of content, your message should:

1. Thank people for calling.
2. Provide callers your USP (unique selling position) and benefit(s).
3. Explain to callers why youre not answering the phone.
4. Refer callers to your hotline for more information.
5. Give callers incentive to leave their names and numbers, such as a contest drawing or promotion.

The first thing callers should hear on your outgoing phone message is, Thank you for calling (the name of your facility). This is painfully obvious, but out of the 50-plus facilities I called, more than 10 didnt even use the facility name in their greeting. When callers listen to your message, they should learn what makes your facility different than any other in your areayour USP. (If you dont have a USP, you have a problem. See my column in the April 2004 issue for more information on this topic.) Along with your USP, you must explain its benefit to the customer. For example, if you tell people you are the only one in town with individually alarmed doors, also say, so we immediately know when an unauthorized party opens your unit. If you have more than one USP, pick your best or most powerful. To enumerate more than one on the phone would make the message too long.

Your message should also explain why youre not answering the phone. It should say something like, If youve reached this message, were either on the property showing one of our spacious units or were gone for the day. Give potential renters a reason youre not in the office, particularly during business hours when they expect you to be there.

Another important tool Ive addressed in past issues is the storage hotline. The hotline is a three- to five-minute message set up on a separate phone line that gives people a complete set of reasons to rent from you. You dont have the time to do this with your standard outgoing message, but you can direct people to a separate hotline for more informationit will do the heavy lifting for the sale. On your standard greeting, refer to the hotline as a 24-hour, free recorded message about your facility or the service of self-storage.

When you ask callers to leave their names and phone numbers, many will be reluctant to do so. You need to motivate them with an incentive. For example, provide the opportunity to be entered into a contest to win something. This will encourage them to leave important contact information.

Caller ID

If you have caller ID, it will often give you the names and phone numbers of people who called while you were out, even if they didnt leave a message. While it isnt appropriate to call those who hung up on your machine or voicemail, it is acceptable and even smart to send them a postcard with a special offer. By inputting a phone number into an online reverse directory, you can often get a mailing address. What will people who receive postcards think? Most will be shocked at the coincidence. The majority wont connect the two events, but even those who do shouldnt be offended.

Each morning, have your manager check the caller-ID unit and follow up with callers appropriately. It is crucial to take action immediately after the calls, on the same day you pull the numbers off the system. When people call about storage, they arent going to sit around and wait. Most will decide where to rent within the next few days.

Putting It All Together

What is a good outgoing message? It should sound something like this:

Thank you for calling ABC Self Storage, the only facility in Des Moines with individually alarmed doors, so we know when someone unauthorized enters your unit. If youve reached this message, were either on the property showing one of our spacious rental units, or were gone for the day. To hear a complete description of our facility, feel free to call our 24-hour, free recorded message at 555-1212, or check out our website at www.mystorageplace.com. At the tone, please leave your full name and phone number to be entered into our contest to win a free trip to Hawaii.

If spoken quickly but clearly, this wont be too much information to provide in your message. Whatever you do, take time to come up with a well-planned, friendly greeting.

You concentrate on selling people when you speak to them over the phone why not make sure that when they reach your message, they receive an equally effective sales effort?

Fred Gleeck is a self-storage consultant who helps owners/operators during all phases of the business, from feasibility studies to creating an ongoing marketing plan. He is the author of Secrets of Self Storage Marketing SuccessRevealed! (available for purchase at www.selfstoragesuccess.com) as well as the producer of professional training videos on self-storage marketing. For more information, call 800.FGLEECK; e-mail [email protected].

You may have heard the term enterprise solution, a phrase commonly used in the computer industry. An enterprise solution involves several distinct, remote sites tied into a single database using a wide-area network (WAN). This type of solution was once reserved for very large companies like banks and insurance companies using mainframe computers. With the growth of the Internet, the cost of connecting remote sites has become affordable for almost any business.

How WAN Works

In a wide-area network, the software programs and databases are established on a central computer. Each site gets a connection to the main. The connection can be a DSL line, frame relay, fractional T line or similar type of service. The cost of these types of connections has become quite affordable.

To maximize the bandwidth utility, we use what is commonly referred to as thin-client computing. The remote users connect using Microsofts Terminal Services or Citrix. Terminal Services is a module that ships with Microsoft Server 2000 and can be installed at no additional charge. Citrix is a more expensive third-party product purchased as an add-on. Both products allow all computer processing to run on the server. The only things passed over the WAN are the screen displays and other small transmissions of data.

Benefits

The benefits of an enterprise solution are obvious. Since all of the data is stored in a central database, the business can have instant access to information from all sites in a consolidated format. Management can print up-to-the-minute reports at any time. There is no need for cumbersome merge programs that are prone to problems. In a centralized database, all of the information is live and current. In the case of the Internet, you can have a single web server that allows your customers to rent, reserve and pay online for units at any of your sites from a single point of contact.

Another benefit is backing up and other routine maintenance is done on a single database at one location. There are also significant risk-management benefits. For instance, if you have 10 sites, each responsible for backing up its own data, it is extremely unlikely you are consistently getting 10 good backups. Most managers believe they are getting good backups; but when a disaster occurs, they are often surprised to learn they are not. People are trained to insert and remove a backup tape from their computer each day, but they do not fully understand the backup process and often fail to recognize the warning signs when a backup fails.

You must ask yourself: What is the cost of trying to reconstruct a lost database? What is the cost of trying to maintain adequate training and maintenance of multiple sites? It is important to understand that risk management goes beyond purchasing insurance. It is a philosophy of managing your business in such a way to protect its value and cash flow. In short, investing in the proper infrastructure for your organization can be viewed as a form of risk management.

Implementation

To implement an enterprise solution, you must first use software designed to run multiple sites from a single database. Unfortunately, most self-storage software is designed to manage only a single facility. To support multiple sites, the software must take into consideration all elements that must be segregated from a single-site-users perspective.

For example, the software must be able to distinguish what units are associated with each site. Security must take multiple sites into account and limit access to one or more facilities. When a user is assigned to a particular site, he should only see units associated with that facility. These examples illustrate only a couple of the concepts the software must support.

On the other hand, administrators must see data from all sites in a consolidated format. The database engine must be designed to work for multiple sites over a WAN configuration. Most self-storage software providers have their users install stand-alone versions of the software on individual computers at each site. Then they use a special extraction to mine information from each database and a consolidation program to merge it at the home office. To set up the infrastructure for a WAN, you must have a centralized server and some level of bandwidth to connect the remote sites. The computers at the sites do not need to be powerful machines, because most of the processing is done at the central site on the server. Local printers must be configured on the WAN. Setting up an enterprise solution requires a commitment of resources, but the benefits are well worth it.

Cost Comparison

You must compare the costs of establishing and maintaining a WAN vs. installations of separate copies of software at each location. Many of the costs of maintaining separate databases may not be readily apparent and are often overlooked. For instance:

• What are the costs of having multiple people performing database backups and other redundant tasks?
• What are the costs of gathering information from multiple sources, preparing the data for consolidation, scrubbing the data and merging it into a single source?
• How important is it to have accurate real-time data that will allow management to make instant, informed decisions? For example, is it important to know how many of a particular size and type of unit is available at each site? With this information, you can quickly react to market conditions and maintain a higher level of occupancy.

This type of solution is not for everyone. It requires a commitment to technology. But if implemented correctly, an enterprise solution is well worth the cost and effort.

Steve Hyman is president of DHS Worldwide, which provides an enterprise MS-SQL selfstorage management-software solution. Mr. Hyman has a degree in computer science and business administration from Vanderbilt University. He received a Juris Doctorate from the University of Miami School of Law and is a licensed attorney in the state of Florida. He can be reached at 800.377.8406 or [email protected].

Over the past few years, Ive seen many changes in management software, including the transition from DOS- to Windowsbased programs, as well as the introduction of several wonderful features, such as multiunit tracking, which simplifies payment and mailing tasks, and inventory control, which produces reports showing total sales and on-hand supplies. I must also mention powerful rate-change tools, which allow storage facilities to automatically increase monthly rental rates when occupancy reaches a desired level or a tenant has been renting for a given amount of time.

This list of features goes on, and the larger the storage facility, the greater the benefit the management software provides. A facility with only 55 units, for example, creates a minimal daily workload: processing move-ins, move-outs and payments, dealing with delinquent tenants, printing reports, and generating correspondence to prospective, past and existing tenants. A facility with 500 units is an entirely different story. The daily workload involves the same tasks, but on a much larger scale.

The latest self-storage management programs benefit a facility tremendously, relieving the manager of many duties that were once performed manually. A storage-management program, like any other program, runs on a computer; and computers are faster and more powerful than ever. They do more in a millisecond than a human does in an entire month, carrying out an unbelievable number of tasks. However, many good things also carry a downside. These workhorses save a great deal of time; but when a dreaded error message appears or something goes awry, you want to take your modern machine and send it to a distant harbor.

Program Performance

Many things will affect the performance of your management program as well as the other programs on your PC; but there are four in particular to which you should pay attention.

First is the computer hardware itself: hard drives, power supplies, the CD or 3.5-inch disk drive, the mother board with all of its RAM, and other components. All these devices work hard, some at hotter temperatures than others. Some are mechanical with moving parts. These components are expected to perform within very tight tolerances and, over time, the heating and cooling, expanding, contracting and spinning can cause them to wear out, affecting the machines overall performance.

Second is the operating system: Windows 98, 2000, NT, XP and ME are all popular and in use throughout the world. Each has its own characteristics and has been developed at different times. These sophisticated systems form the bridge necessary for the computer to process all programs and program information.

The third element is the software loaded on the computer: programs for business and entertainment and anything downloaded from the Internet. This also includes device drivers for anything attached to your PC, such as a printer or scanner, or any data-storage devices. These all add to your computers unique functionality; but they might, at times, compromise its performance.

The final factor is the individual operating the computer. Some people are experienced with computers and others are not. Some have had formal training and others havent. Experience and training arent always enoughthe temperament of the operator and his overall attitude toward the PC makes a difference as well. Im a perfect exampleI doubt if anyone could hold a candle to the number of times Ive caused a lock-up or error because of my erratic key and mouse movements. If someone pushed my buttons as quickly and randomly as I do my computers, Id go into tilt myself. Most of us make mistakes and get a little impatient from time to time. Sometimes we forget how much time a computer and a few software programs save.

Defining Expectations

We all have different expectations of our computer programs. A program is designed to take information and carry out tasks in a certain way, and each has its own set of rules. A storage facility owner, manager or accountant may have his own idea of how tasks should be handled. For example, a report may provide all the necessary information for one person, but be considered incomplete by another. To one, the program layout and appearance may provide a comfortable work environment, but to another, it is confusing and tedious.

The only way to perfect selfstorage management programs beyond their current abilities would be to custom-build one for each facility owner. But then the manager operating the program may not be in agreement with the owners choices. There are a lot of variables that affect how a computer operates, how reliable it is and how fast it can complete tasks. The factors I mentioned above are just a sample of what can make the best management program look terrible or the not-so-great even worse. Many factors come into play when you turn on that power switch every morning.

Since storage-management programs are not customized, any program you purchase for your facility will involve compromises. For example, you should consider if an extra step to perform a standard function, like a move-in, would be worthwhile if tenant information were easily accessible and the screen were nicely arranged. Or would you prefer working on a less user-friendly screen if it meant needing fewer steps?

Dont get too frustrated if you dont find exactly what you expect in a program. There are only a couple dozen software providers in this industry, but tens of thousands of facilities for which they create software. Is there a perfect management program? Perhaps not yet. On the other hand, the software may be as perfect as its going to getmore perfect than you realize.

David Essman is director of marketing for Lakewood, Colo.-based Sentinel Systems Corp., which has manufactured self-storage software and security systems since 1975. Mr. Essman has been with the company since 1995. He has worked with computer-based products and electronics since 1983. He can be reached at [email protected].

Your choice of records-storage racking can improve your yield per square foot, long-term revenue and operational efficiency. The single most expensive mistake many records-storage operators make is buying cheap racks. Racking is a commodity and can be found anywhere, but rack design and planning requires professional assistance from expert resources.

Choosing the right racking is not easy. Racking choices affect storage density, profitability, operational efficiency and safety. Lets review these issues:

• Storage DensityBuildings and records-storage space range in size from 10-by-10-by-8-foot storage units to a 40,000-squarefoot building with a 40-foot or higher ceiling. Racking to fit these various options is complex. As height increases, the gauge of steel must reflect the enormous weight loads of high-rise recordsstorage boxes. The aisle width, beam width and catwalk requirements vary as the size of the racking system changes. There is always more than one way to design a space.
• ProfitabilityDensity may be the biggest issue, but it is not necessarily the most important in terms of profitability. It is always a balance between box positions per square foot and access to retrievals, which is a labor factor. Storage space is a capital issue, while labor rates often changealways upward. The decisions you make today may haunt you for a long time to come.
• Operational EfficiencySince boxes are stacked one on top of another, the number of boxes that must be moved for each retrieval significantly changes the labor cost. The records-storage industry has more or less settled on three-high, three-deep (or nine boxes) as the most normal configuration per bin position. However, this may not be what fits you best. There are variables that go into this decision.
• Employee SafetyThis is the issue that continues to amaze me. I have seen some of the most inappropriate racking designs you can imagine. Collapses of insufficient racking occur frequently, and dangerous operations can easily persist.

Catwalks vs. Order Pickers

I will attempt to be unbiased here, though it may be difficult, since I am convinced the foremost issue in rack design must be employee safety. There are also issues of insurance and employer liability to consider. For now, lets look at the design density and efficiency of each racking system.

Order-Picker Systems.

Order-pickers are forklift-like vehicles that move around a warehouse, usually under the control of a warehouseman. Since the width (base) of the order-picker is relative to the height of its mast (upright reach), it requires wider aisles than a catwalk. Wider aisles (45 to 48 inches) generally translate into less storage density. The argument for the pickers use is usually relative to speed. However, I have information that shows well-designed catwalk systems with well-trained and supervised warehousemen may provide faster retrieval throughput.

The most innovative new method used to attain greater storage density in picker systems is a four-deep, three-high, box-bin configuration. These require the picker operator to reach deeper into the racks at heights that may exceed 30 feet. This opens the door for huge safety and liability concerns. Pickers are large, heavy pieces of equipment that can attain speeds and force capable of toppling racks. Rack collapses are not uncommon and deaths have occurred as a result.

The force required to crimp uprights and topple racks is not difficult to achieve. Records-storage racking supports heavy boxes in configurations that may meet or exceed the strength limitations of its uprights and steel-gauge expectations, particularly if the rack design is amateur.

Catwalk Systems.

In catwalk systems, aisles are predominantly between 30 and 32 inches, and racks are made from metal grids designed to hold the weight of warehousemen and their box loads. These systems use ladders, walkways, elevators, gates and box slides. There may be multiple levels of catwalks depending on ceiling height.

The height of each walk is usually between 8 and 9 feet, or three shelf levels of three-high, three-deep boxes. The most common depth of racking uprights is 48 inches. This depth computes equally to three letter/legal-size boxes or two 24-inch storage-transfer boxes. Safety and storage density are the prime reasoning for the catwalk system. To achieve or exceed the order-picker retrieval throughput, the operations manager should have a well-trained and managed workforce.

Personally, I prefer catwalks. Shelving options are always arguable, since design is an art as well as an engineering science. There are certainly reasons pickers may be a good choice. It has been my experience that these usually relate to odd ceiling heights or unusual circumstances. Regardless of your choice, make sure your warehousemen are trained and safety is always a mandate. Following are some other warehouse musts.

Warehouse Absolutes

1. Safety FirstNothing is more important to your business than employee safety and protection against liability.
2. Training, Training, TrainingEmployees must understand operating issues and dangers, efficiency methods and tools, mechanical equipment operations and lifting techniques. Formal training also reduces your liability. Training videos are available in several languages.
3. Post RulesWarehouse rules should be signed, dated and posted for all employees.Safety classes should be held regularly and required for all employees, especially new or temporary employees.
4. No Horseplay AllowedWarehouses can be dangerous places, so no one should be allowed to be casual about your operation. I have actually witnessed such foolishness as picker races, skateboarding, and children of owners and managers playing in warehouses. This is simply not safe.
5. ConfidentialityAll employees must sign and be trained on the confidential nature of client records. Any violations must be handled immediately.
6. SecuritySecure warehouses require that no one except employees be allowed in without an escort. Gates and entry passages must remain locked. ID cards should be worn and smoking rules followed exactly.

I could and may write a book on racking and safety, but for the moment, let these general guidelines be sufficient. In the words of comedian Dennis Miller, This is my opinion and Im sticking to it.

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.

Self-storage owners have one of the most misunderstood and overlooked business types in the bank-card industry; because they use both types of merchant accounts in one business, the opportunity to maximize their profits is twofold. Hopefully, the information that follows will provide the information they need to look a step ahead and save time, money and frustration with bankcard processing.

How Transactions Are Processed

When a credit-card transaction is made, the terminal or software contacts the processing bank via a platform. The processing bank contacts the card-issuing bank to determine if the account has the balance available to authorize the transaction. If the funds are available, they are placed on hold for a period of time, usually 24 hours. The processing bank tells the terminal or software the transaction is authorized, but no money moves at this point. At the end of the day, the terminal or software batches or settles, and the processing bank makes payment to the merchant on the authorized transactions contained in the batch.

Most processors break down Visa and MasterCard transactions into three categories:

• QualifiedA standard Visa or MasterCard is swiped through a terminal or magreader and batched within 24 hours.
• Mid-qualifiedA standard card is keyed into a terminal or software using AVS (an address-verification system), or a corporate card is swiped.
• NonqualifiedA standard card is keyed in without AVS, a corporate card is keyed in, or a transaction is not batched or settled in 24 hours.

Mid-and nonqualified transactions are more expensive than qualified ones because of their increased risk. American Express and Discover offer different rates than Visa and MasterCard. Their rates are based on business type, average ticket and whether the transactions are swiped or keyed. These companies do not offer mid- or nonqualified transactions, and they deposit separately from Visa and MasterCard transactions.

Managing Risk

Risk is a major factor in merchant accounts and bankcard processing. It begins with the application process, when the underwriters review the paperwork and determine if the processing bank will accept the new client. Self-storage facilities are low-risk businesses.

Risk is also involved in the transaction process. Different transaction methods and card types increase risk to the processing banks. Swiped transactions present the lowest risk because there is electronic proof that the card was present and the identification of the cardholder could be verified. Corporate cards are considered higher risk because the cardholder is not the person ultimately responsible for paying the charge. Keyed transactions bring the highest risk because the card is not present, and it is extremely difficult to verify the identity of the person making the transaction.

Finally, risk is involved after a sale. Visa and MasterCard transactions can be disputed up to 180 days after the transaction. This dispute can result in a chargeback. For a chargeback to occur, the customer calls the card-issuing bank and answers a series of questions regarding the transaction. If the bank finds sufficient reason to reverse the charge, it becomes a chargeback. Selfstorage facilities are fairly chargebackproof. A customer knows he did business with you because he put his things in your unit and signed a rental agreement. There is no shipping or future delivery involvedits usually pay as you go. Just make sure that once a customer moves out you do not continue to charge his card.

Types of Merchant Accounts

There are two basic types of merchant accounts, based on how transactions are processed. The first type is known as retail, card present or swiped. These accounts obtain all necessary information for the processor from the magnetic stripe on the credit card. They are the least expensive accounts because they present the lowest risk; the processing bank knows the merchant has had the opportunity to verify the cardholders identity by checking the drivers license or other photo ID and matching the signature on the card with the one on the ticket. Self-storage facilities are usually able to swipe transactions because the client is on site to store his belongings and sign an agreement.

The second type of merchant account is called MOTO (mail order, telephone order). With this type of account, a card is not present, and the number is keyed. Most processors insist on this type of account for organizations that do not swipe at least 70 percent of their transactions. All websites fall into this category. These accounts are slightly more expensive because the transactions start out mid-qualified and involve higher risk. The security information in the magnetic strip is not sent to the processor; signatures are not obtained at the time of the sale; and photo identification is not available to verify the cardholder. Because the processing bank knows most of these transactions will be mid-qualified, it gives the business a higher discount than it gives the retail account.

Which Is Right for You?

In the months following a first transaction with a tenant, a self-storage facility usually keys in the transactions or uses the automated billing in its software program, which sends the information as if it were keyed. In a perfect world, all storage facilities would have both types of merchant accounts to maximize the savings available. Unfortunately, most terminals and software programs only hold one merchant account, requiring additional equipment, time for data input and accounting.

So which type of account is best for your facility? There are several important factors to consider: turnover rates, equipment or software used, average ticket, and total processing volume. Most storage facilities actually save money by setting up a MOTO account. Even though they pay a little more for the first transaction, the money they save during the following months makes up the difference. One operator saved more than $1,000 a month in fees by changing from a swiped to a MOTO account.

The biggest factor in the battle of terminal vs. software is usually the cost. Although costs for both have dropped significantly in the last few years, terminals are still the least expensive way to process credit-card transactions. Some noteworthy terminal features include a built-in Smart Card reader and PIN pad, a thermal printer, the ability to support current state and federal regulations, and an ethernet connection. When shopping for processing software, consider purchasing one that supports AVS, does recurring (automatic) billing, and is certified for DSL or cable-modem transactions with most processors. These features will allow you to save time, reduce mistakes and ensure customer satisfaction.

Service Providers

The last piece of the merchant account puzzleand the most importantis the service provider. This company will be responsible for making sure you receive a significant percentage of your revenue. Independent sales organizations and merchant services providers all work from the prices set by Visa and MasterCard, called Interchange.

When choosing a provider, you should consider many factors beyond rates:

• Does the provider offer a personal account manager who knows you and your business, or does it give you a 1-800 number through which they will not talk to you unless you know your merchant-ID number?
• Is the provider registered with Visa and MasterCard?
• Can the company provide knowledgeable technical support for the terminal or software you are using?
• Does the provider have references in your industry?

Now that you have advanced your education in merchant accounts, what is the next step? Consult a qualified professional about your current statements or the project you are opening. Ask a lot of questions, and have him review your set-up to ensure you are not wasting money on unnecessary fees.

Scott Lewis is the accounts director for National Bankcard Systems (NBS) in Austin, Texas. NBS is a registered ISO for Fleet and Regions Banks, and handles merchant accounts for six of the largest processing banks in the country. For the last two years, the company has been ranked on the INC. 500 list of fastest-growing, privately owned companies. For a free analysis of your merchant-account processing statement or more information, call 800.823.6835.

By now, you should be aware of the most recent quandary facing self-storage: the shortage of steel in the United States and the resulting increase in prices. Inside Self- Storage and other industry educators have done their parts to inform developers and operators of how this predicament could affect their businesses and pocketbooks. But newspapers across the country have made the plight notorious. Following is a sample of headlines that have appeared in recent months:

• USA Today, 2.21.04, Global Steel Shortage Forces 66% Climb in Prices Since June
• Pittsburgh Business Times, 1.23.04, Rise in Global Steel Demand May Impact Coke Shortage
• Baltimore Business Journal, 3.12.04, Steel Costs Hit Area Builders
• Puget Sound Business Journal, 3.12.04, Steels Jagged Edge
• The Business Journal, Serving the Greater Triad Area, 3.4.04, Rising Steel Prices Plague Triad Firms
• The Business Review, Serving New Yorks Capital Region, 2.27.04, Steel Prices Soar, Fabricators Mull Pass-Along Increases
• The Business Journal, Serving Greater Milwaukee, 3.5.04, Surging Steel Prices Sap Local Economy
• Dallas Business Journal, 3.12.04, Steel Shortage Worries Industry Insiders
• Denver Business Journal, 3.15.04, Steel Prices Climb 200%

They dont paint a very pretty picture, and the last thing professionals in this business need is unnecessary and unwarranted hysteria. To get the straight scoop, ISS spoke with Kelly Ginn and Wayne Dickinson of MBCI about the state of steel and storage (see Industry Update in this moth's issue). The outlook may not be as ghastly as it seems.

Mincing Webs

Throughout the year, I receive an influx of inquiries from readers or industry newcomers who want to know which management-software package and/or equipment I recommend. The answer to this question is simple: I dont. I like my head where it is, thank you very much.

But as representative for a publication that professes to be the premier source of industry information, it is my duty to provide what guidance I can. While our annual Software & Technology Issue has, in past years, included comparative charts that hold up several competing packages for review, the number of software providers and technology offerings has grown beyond the scope of such a presentation. This issue does, however, include edifying articles from some of the finest vendors in the industry, as well as a series of company profiles that provides a snapshot of popular suppliers.

When you shop for management software, most every vendor out there will tell you it is the leading company, that all of its features are completely automated, that its programs allow for total integration. Most will even tell you they are web-based. But what do these things really mean? As one of this months authors advises, Dont get lost in the lingo. Conduct careful investigations. Secure demosand use them. Most of all, do not be afraid to ask questions of company representatives. It is their job to be helpful. It is your job to put them to their paces.

Best of luck,

Teri L. Lanza
Editorial Director
[email protected]

For information to be useful, it must be available and timely. There is only so much you can accomplish when your business data is scattered on various computers. This is not another diatribe on the benefits of centralized data. Instead, its about the new frontiers of self-storage, including kiosks and call centers, and the value of historical data.

Technological Tools

Kiosks have garnered the attention of many operators as a way to expand and improve the storefront and customer-service experience, as well as save money. But what is really required to make the kiosk work in various modes of operation?

A kiosk is a fantastic idea for sites that need additional methods of handling customers or for after-hours service. Similarly, some operators would like to run lightsout facilities, smaller sites where a full-time manager is not economically feasible. In this case, a kiosk is a great solution; but it depends on facility data being available and, in most cases, timely or in real time. The kiosk at a busy facility is likely tied into the operational software and knows what it needs to take a payment or move in a new tenant. However, a kiosk placed in the Student Union of a local university, miles away from a facility, may not have access to timely data, depending on how the operator makes his information visible.

Call centers offer another example of why corporate data should be accessible outside the domains of site offices or corporate databases. The value of call centers for operators of all sizes is clear. However, it is compounded or crippled by what each center knows. The call centers in this industry are very technically capable and eager to move beyond the days of faxed or e-mailed vacancy reports. Dollar for dollar, the call centers make sense by extending service hours and ensuring no customer is neglected. Coupling the tremendous service capabilities of the center with real-time data only magnifies the return on the investment and provides customers more options. A call center working with information that is 24 hours old has its hands tied, since occupancy data is likely to be inaccurate.

The Value of Historical Data

It is encouraging to see operators in our industry adopting new technologies. Vendors scramble to meet the demands of those who imagine new tools to better manage properties and serve customers. With the number of companies that offer online solutions increasing each year, centrally based systems are here to stay.

The examples of technology use cited above demonstrate the benefits of data consolidation; but another area deserving attention is the history of facility data. For example, take the exercise of pricing unit inventory. Immediate knowledge of occupancy and available units is obviously very useful when a new customer is renting a unit via a kiosk. This same knowledge is useful for determining unit rates, though it only provides a fraction of the information required for accurate pricing.

Pricing decisions based on current occupancy alone ignore trends and characteristics of your customers over time. More intelligent decisions can be made if historical considerations are taken into account. Being able to refer to past pricing adjustments and contrasting them against competitive data can greatly improve the efficiency of business decisions.

For example, I know of one organization that is actively using tools to track customer reactions to various price increases. From this data, it can analyze exactly when a customer becomes sensitive to a rate increase. Lets say an analysis of the data over two years shows that three percent of customers will move out within 60 days in response to a 6 percent rate increase. An increase of 6.5 percent or higher causes a 7 percent move-out over the same time period. Given this data and some very simple math, it is easy to see the range within which rates can be adjusted without causing a mass exodus. Further, with known vacancy rates based on historical results, forecasting and demand analysis becomes obvious and predictable.

Obviously, for this approach to work, data must be on hand. In this case, the timeliness of the data is less important than the overall historical record. The company just beginning to use information in this manner is not likely to have the historical data necessary for immediate use; thus, the payoff is a year or two down the road.

In addition, analysis of the data is not trivial. It requires some sophistication to determine which events are responsible for customer decisions: rate changes vs. other forces that influence normal attrition. It is also helpful if seasonal trends can be included in the big picture to help account for abnormal occupancy statistics at given times of the year. The pricing puzzle is complex, but with solid data from past pricing exercises, some of the uncertainly can be removed from the equation.

Good Data

General reporting is the first and last consideration of good data. Reportable, useful data meets all of the conditions outlined above: availability, timeliness, consolidation and historical depth. Good reporting solutions mean facilities and corporate users are satisfied with required information; and investors, partners and other entities can see and use pertinent data as they need it.

Companies that intend to remain competitive and reactive in the self-storage industry need to plan for emerging technologies. Though new technology consistently enters the marketplace, not all companies are able to adopt and make use of it. Opportunities are passing them by. Companies that do not strategize and prepare for the future will be at a disadvantage. Large companies with dozens or hundreds of facilities as well as those just entering the market will benefit from clear tactics in terms of information technology.

James Hafen is the chief technical officer at Salt Lake City-based Centershift, which provides hosted application and online management services for the self-storage and other leased-property industries. For more information, call 1.800.9CHIFT; e-mail [email protected]; www.centershift.com.