By Jim Chiswell

I had the recent honor of speaking at the very first conference of the Illinois Self Storage Association (ISSA), which is now just over a year old. The association is off to a good start, with 70 owners/operators and vendor members.

I want to congratulate Jack Murphy, Kevin Heiden and John MaanDeKok for their personal efforts, and the financial resources they have invested in launching the ISSA. This association's leadership, under President Murphy, has already taken a major step in the group's growth. Rather than depending on the work of volunteers, they stepped out in faith and retained a professional association manager, Michael Lane, to run the day-to-day operations. Michael's 20-plus years of association experience has already paid off significantly for all of the self-storage owners in Illinois.

The Illinois Association's goal is much like that of the Texas Mini Storage Association (TMSA) and the New York Self Storage Association (NYSSA). They not only provide legislative monitoring at the state level, but also provide a vehicle for owner and manager communications, cooperation and learning. The establishment of state organizations is a critical next step in the growing maturity of the self-storage industry.

The ISSA, with direct help from the TMSA, is already planning to publish its own version of the Texas Gold Book. For those of you not familiar with the TMSA Gold Book, it is, in my opinion, one of the finest resources that has ever been published for self-storage operators. It contains up-to-date information on Civil Codes, Lien Laws and other legal matters essential for all self-storage facility owners and managers to be familiar with in the operations of their properties.

There are other state associations starting to evolve around the country. It is vital for the long-term health of our industry that these efforts succeed. If you are an owner in a state with an established association or one just being developed, get behind them with your membership dues check and a commitment of your time. I feel this is especially true for the major national and regional companies that, in many cases, are standing on the sidelines and not supporting these organizations. Yes, I have heard all of the reasons why people don't join. The bottom line is that we all owe something back to the industry where we make our living. If you don't have a state organization, get some industry friends together and get one started.

There is one final opinion that I want to express about associations. I personally think that the time has come for the national Self Storage Association's (SSA) Board of Directors to fully recognize the importance of state associations to our industry. I feel that the national board needs to totally restructure the SSA. By dismantling the antiquated regional structure and creating a new governance board made up of representatives from each state association, we can take a giant step forward in improving the focus of national activities on the problems facing our business. I am convinced that a new direction for the national SSA is in everyone's best interest.

I have posted on my website (www.jimdot.com) the state associations that I have been able to identify, including their address, the name of a contact person and their URL (when available). If you are part of a new association that is not listed there, please drop me a note or e-mail, and I will add you to the list immediately.

How Much Does the Telephone Really Cost?

When I ask most owners and managers that question, I am given the per-month cost of the phone bill. In a few cases, I am asked, "Does that include my Yellow Pages costs?" The point I am making is that the cost of the telephone is really every dollar that you spend on marketing your facility.

Almost every marketing dollar spent is designed to get the phone to ring. What happens from that point is the subject of an entire day's seminar. I would like to challenge you to take a few minutes and fill in the blanks for your own facility. The following is an example for you to follow:

• Total Marketing Dollars = $18,000
• Total annual calls = 480

Only count your prospective customer calls, not calls from existing customers. Take your total marketing dollars, and divide them by the total of annual calls. In this example, the cost per call is $37.50. That sounds like a lot of money to me.

Now take it one step further with this calculation:

• Total new rentals last year = 175 units
• Average length of stay = 8 months

The average rental rate per month is $100. Multiply the average length of stay by the average rental rate per month. The average rental customer who stays an average of eight months brings in $800. If you rented 175 units, total sales would equal $140,000.

Now take total annual telephone calls (480) and divide that number into the figure for total sales ($140,000). You discover that each telephone call is worth $291.67. It doesn't matter if the person on the other end of the line ended up renting.

If you run these numbers for your facility, you might be surprised at just how much each phone call costs you, as well as what each call is worth over the course of the year. So, managers, every time you answer a phone call from a prospective customer, you will realize how important it is to give that caller your undivided attention and best sales effort. And, owners, it really is important that you provide your managers with educational opportunities to improve their telephone/sales techniques.

The more you understand the internal operations of your facility, and what things really cost, the more effective you will become as a manager and an owner. I would be very interested in the results that you obtain for your facility. Send me an e-mail or drop me a note. If I receive sufficient participation, I will publish the results in an upcoming article.

Jim Chiswell is the president of Chiswell & Associates of Williamsville, N.Y. Since 1990, his firm has provided feasibility studies, acquisition due diligence and customized manager training for the self-storage industry. In addition to contributing regularly to Inside Self-Storage, Mr. Chiswell is a frequent speaker at Inside Self-Storage Expos. He can be reached via e-mail at [email protected]; phone (716) 634-2428; www.jimdot.com.

By David Wilhite

Every self-storage facility owner should be aware of the need to protect his income against business interruptions. If you should sustain a direct physical loss from a fire or other covered cause of loss, chances are good that you will also suffer an indirect loss of income. (Indirect losses refer to the lost profits and the fixed expenses that continue month to month, whether your facility is operating or not). You're also likely to incur extra expenses as you attempt to resume your normal business operations.

Business-interruption insurance--specifically, loss-of-income insurance and extra-expense insurance--are designed to minimize your risk in the event of a loss.¹ Also known as time-element coverage, business-interruption insurance provides several important benefits:

1) It protects you against reduced sales income (and increased expenses) that result from damage to your buildings or business personal property.

2) It allows you to retain key employees by maintaining their salaries and benefits.

3) It encourages prompt settlement of building and business personal-
property losses.

4) It helps you to retain your tenants.

5) It can restore you to the same position you were in before the loss occurred.

Business-interruption insurance is usually included in most business owners' policies as a standard endorsement, which might lead you to take it for granted. However, when you consider that business-interruption losses can easily exceed direct-damage losses, the importance of this coverage becomes clear. Business-interruption insurance is of particular value to self-storage facility owners who sustain a covered loss in that it compensates you for lost profits based on your operation's projected monthly earnings, thus taking into account the seasonal nature of the market.

When shopping for business- interruption insurance, keep in mind that loss-of-income and extra-expense coverages are limited to the actual length of time required to rebuild, repair or replace your damaged buildings or business-personal property. In other words, the amount of financial loss is determined by the length of time it takes to get your facility back in business. For loss-of-income coverage to kick in, the suspension of your business operations must be caused by direct loss or damage as a result of a covered cause of loss. Payment is based upon your operation's past history of seasonal profits and losses. (Note that, as with all insurance policies, it is your responsibility to make every reasonable effort to resume complete or partial operation as soon as possible in order to minimize loss).

It is a surprising but true fact that a small percentage of self-storage owners choose to operate without business-interruption insurance, perhaps because the coverage is not required by most lending institutions. However, when you consider value of the insurance, and its very reasonable cost, it's difficult to understand why anyone would knowingly skip this essential coverage.

I strongly recommend that you secure a full 12 months of loss-of-income coverage to protect yourself against business interruptions. While it may only take three to six months to rebuild your business after a covered loss, you will first be required to remove debris, obtain bids and building permits, and perhaps face ordinance and zoning requirements prior to starting reconstruction. Since most conventional coverage ends when rebuilding is complete, ask your insurance agent about an extended period of indemnity. This important enhancement provides for loss of rental income during a specific period following reconstruction. (While an average retail store or restaurant can begin generating profits as soon as it is re-opened after a covered loss, self-storage facilities may take several months to locate enough new tenants before becoming fully profitable).

No matter how large or small your self-storage facility may be, securing adequate coverage is essential for protecting your business and your peace of mind.

1 "Loss of income" refers to the suspension of your business operations by direct loss or damage as a result of an insured cause of loss. "Extra expense" refers to any extraordinary expenses you incur during the period of restoration that you would not have incurred had there been no direct physical loss or damage to property. The "period of restoration" begins with the date of direct physical loss or damage resulting from any covered cause of loss.

David Wilhite is the marketing manager of Universal Insurance Facilities Inc. Universal offers a complete package of coverages specifically designed to meet the needs of the self-storage industry, including loss of income, employee dishonesty, comprehensive business liability, hazardous-contents removal and customer storage. For more information, contact Universal at Box 40079, Phoenix, AZ 85067-0079; phone (800) 844-2101; fax (480) 970-6240; www.vpico.com/universal.

By Shaun Ferguson

I received a funny e-mail the other day that a university had supposedly sent out to professors to help them better identify with the incoming freshman class. After the initial humor wore off, I got to thinking about what the e-mail implied about this next generation of potential self-storage users. Here is a portion of the message:

The freshman class of the year 2000 was born in 1982/83:
1. They really don't get the phrase "like a broken record" because they have never owned a record player.
2. They have always had a microwave oven in the kitchen.
3. They don't know who Nixon was, and few remember Reagan.
4. They have always had cable TV and video games.
5. They have never seen a 12 oz. Coca-Cola in a glass bottle, nor turned one in for candy money.
6. Fast food has always come in cardboard containers.
7. They don't know who was in the Rat Pack, or even the Brat Pack, for that matter.
8. They have always made popcorn in the microwave ....

The list went on, and I began to feel old, although I had only just graduated high school in 1983 (I can hear some of you groaning now). After reading the list, I began thinking about the customers at my facility, and realized that much of my clientele is my age or older, that I really did not have many younger tenants. Granted, all of our properties are indoor, climate-controlled facilities that have higher rates than regular outside storage; yet, even allowing for the limiting factor of higher prices, I realized that we have a disproportionately older market to which we cater. So began my investigation into who next year's customers will be.

A Bit of History

It became clear to me we needed a better understanding of the psychology of storage users. Many of my older clients' parents were born in the 1920s, during a time of prosperity for the United States, a time much like today. When the Depression hit, it affected everyone, and it soon became imperative that families held onto all of their possessions, as they did not know if they could replace them in the future. "Hoarding" is a harsh word, but it is in essence what became a major psychological force during those times. They became accumulators. They kept everything, and the adage "waste not, want not" became doctrine.

Roosevelt's New Deal helped bring America out of its worst times ever, but the disciplines learned during that time remained. Survivors of the Depression taught the baby boomers, those born after World War II, the value of a penny saved and an old table kept. The boomers could recall their parents' stories of the times of destitution and set out to make sure it never happened to them. They continued to be accumulators, as were their parents, but for different reasons. Materialism, defined by Webster's as "the tendency to be more concerned with material than spiritual or intellectual values," became the defining characteristic of the boomers, and they became the first generation of self-storage users.

Older people looked upon the boomers' children, dubbed "Generation X" (born 1965 through 1977), as "slackers," and predicted they would become the first generation in American history to not exceed the prosperity of its parents. GenXers heard stories of the difficulties previous generations experienced, but had a hard time relating to them as they watched their parents move into bigger and bigger houses, buy more expensive cars, and live their lives in excess. Seeing their parents suffer from alcohol/drug abuse and dying of stress-related strokes and heart attacks years before their time, many GenXer's rejected the materialism that defined their parents.

Generation Y, born in the late '70s and early '80s, and influenced by the GenXers' abandonment of materialism, found a need for instant gratification. They have been growing up in a time when as much as 60 percent of all marriages end in divorce and single-parent families have begun to outnumber the traditional two-parent family unit¹, leading to the feeling that all things, including spouses, are disposable. If it doesn't suit your needs right now, get a new one, whether it's a job, spouse, furnishings, etc. This complete 180-degree turn in ideology from just two generations earlier has produced the "Disposable Generation," and the self-storage industry's next customers.

The 'Disposable Generation' and Self-Storage

Herein lies the problem facing owners and managers of storage facilities in the next few years to come: a generation of potential renters that typically has less disposable income, places less value on material belongings than its predecessors, and does not possess the "hoarding" instinct that is the mainstay of our industry. In developing future marketing strategies, storage facility owners and managers must begin looking at this next generation's world perspective and figure out what will motivate them to choose our storage facilities rather than mom and dad's garage or the curb out front to store their belongings. The following are a few observations and ideas I have been working with in developing future marketing campaigns:

1. Saying that many of these young people are familiar with storage facilities would be a safe conclusion, given the number of divorces so many of their parents went through. Nevertheless, we cannot take that for granted in terms of facility loyalty. Coca-Cola and Levi jeans, once the bastions of customer loyalty in their industries, have closed production plants and downsized employees due, in part, to a shift from brand loyalty to fad and price-induced spurts of popularity among competitors. If they do choose to use self-storage at all for their belongings, we will have to actively be apart of their decision-making process through well-planned sales presentations, both on the phone and on site, as well as market our companies in ways relevant to their world, i.e., the Internet. (See below.)
2. Look at your managers. If a younger person with black fingernail polish, eyebrow piercings or tattoos comes into your office, is your manager going to be able to relate to him, or will he be nervous and unsure of himself? This next generation is more worldly and harder to shock, due in part to greater exposure from the Internet and extreme television programming. It may be time to move past hiring older, retired couples to manage a facility because it keeps payrolls lower, and consider hiring younger professionals who are better able to relate to this next generation of renters, and your company's current customers. With so many self-storage facilities to choose from, this next generation of renters has no problem dismissing a facility solely on an emotional response to how we treated them.
3. During the Super Bowl, every other commercial was for www.this.com or www.that.com. Hopefully, the point was not lost on storage-facility owners and managers. You have to have a presence on the web and you have to advertise that presence. Now, that doesn't mean spending $2 million to air a commercial during the Super Bowl; instead, include your web address in your Yellow Pages ad, on your business cards and letterhead--anything your company puts its name on. Your website does not have to be a huge, interactive, multimedia page. A well-thought home page should include pictures of your facility, a list of features and benefits, and contact information, such as your telephone and fax numbers, physical address and e-mail address. Also, be sure to include driving instructions and/or maps, and your hours of operation.

If your company does not have Internet access, consider getting it soon; the next generations of renters are learning to use the web in elementary school and will soon be turning to the Internet before they turn to the phone book. AOL and other servers are a low-cost addition to your budget and even provide space for you to create a home page at no extra charge. Some sites cater to the self-storage industry and will put your facility on the web for free. If you really want to be effective with your Internet presence, register your own web domain (www.your store's name.com).

We have some interesting times ahead of us as an industry. The U.S. Census shows the "Disposable Generation" to be one of the smallest generations in terms of population in many years². That, coupled with their increased need for instant gratification and less desire to "hoard" belongings as their parents did, should have us all considering what approaches will effectively tap into this market. So, how much does your company know about who your next customers will be, and is it prepared to meet their changing needs?

Population Projections Program, U.S. Census Bureau, Department of Commerce, Washington, D.C. Ibid.

Shaun Ferguson is the manager of ClimaStor II, a climate-controlled facility in Shreveport, La. For more information, call (318) 686-7867.

By Cary McGovern

ithout exception, records management is always less expensive than passive records storage. This column discusses the method that can prove it to your customer.

There are three typical ways that companies store their business records. These methods include storing them on site, storing them off site using their own personnel for retrieval and delivery, and contracting with a storage and retrieval service provided by a commercial source. Let's take a brief look at each of these methods.

Storing Records on Site

By far, the most costly of the three variations is storage and retrieval of business records on-site at the customer's own facility. The cost per square foot is generally two to three times higher than other storage-location costs. The hard cost of existing staff required to locate the records generally runs between $25 to more than $100, depending on the salary of the person "fetching" the record.

It is not uncommon for several staff members to search for hours to find a file. When they can't find it, the search escalates and management or professional personnel are brought into the "hunt." Missing and lost files are common in virtually all businesses.

Storing Records Off Site

The second method reduces the cost of storage by about one-half to two-thirds but increases the cost of retrieval since, not only is their own staff member still responsible for finding the file but, now, there is additional travel time required.

Outsourcing the Storage and Retrieval Service

This method is always the least expensive, since it is always a fixed cost for each retrieval and delivery. The storage charge is reduced to a monthly unit cost, so there is never a need to lease additional space. New boxes added to inventory increase the monthly cost only incrementally, based upon the increased cubic footage in storage.

Performing the Cost-Benefit Analysis

Let's begin the cost-benefit process with a couple of definitions and assumptions:

Definition: Storage is the cost of storing a unit record, such as a box or a file.

Assumption: Storage always costs something.

Definition: Retrieval is the activities surrounding locating, fetching and delivering a record.

Assumption: Retrieval always costs something; there is no such thing as free space or free employee time.

Requirements

In order to determine the actual cost, you must discover and acquire several items while performing your site survey. (For more information about the survey process, you can refer to my past columns in Inside Self-Storage, or visit www.insideselfstorage.com  or www.fileman.com.)

Items needed:

1. The location of all stored records.

2. The cost of the space of those areas. If the customer owns the building, ask what the value of the space would be if he rented it.

3. The hourly cost of the staff member who most typically retrieves the file or box. Add to that 25 percent for benefits and management overhead.

The Analysis

There are 10 steps required in this analysis:

1. Add the total cost of all storage facilities in which boxes are stored. Include closets, file rooms, storerooms and anywhere that boxes are stored. Count the number of boxes stored in these areas. Use a standard of 1.5 cubic feet for the average amount of space a box consumes. (Some boxes may be smaller--for example, the 1.2 cubic foot letter/legal storage container. Others will range well over 2 cubic feet. The 1.5 factor is considered an average size by the commercial records industry.)

2. Divide the total storage cost by the number of boxes. This number results in an average storage cost per box.

3. Determine the hourly cost of the employee that typically retrieves the file or box. Be sure to add at least 25 percent to that hourly cost to represent the benefits and management overhead related to that staff member.

4. Determine the average time it takes for the staff member to receive and interpret the request, plus the travel time to and from the storage location. Multiply the time in hours by the hourly salary rate plus the benefits factor derived in step 3.

5. Double the dollar amount determined in step 4. The staff member is not only taking the time to do the task, he is also not performing some other more important task.

6. Multiply your storage charge by 1.5 to compute average box-storage cost.

7. Add your retrieval cost to your base-delivery cost. (The base-delivery cost is the cost of the first unit delivered. Typically, deliveries have a base charge and an incremental cost for additional boxes.)

8. Add the average storage cost per self-managed box to the average retrieval cost in dollars. The result equals the unit-retrieval cost of self-managed records.

9. Add your base-delivery cost to the results of step 8. This equals your total unit-retrieval cost.

10. Compare the self-managed cost to your cost.

The Edge

It is difficult to argue with the results of this analysis. Clearly, the commercial records center always has the edge on any self-managed facility, either on- or off-site. In fact, the services you provide are of great value to the customer as an outsourced service. Your customer requires fewer staff members, and the service results in a fixed unit cost for each box. Additionally, since you require a regimen to be followed for indexing and describing each box, you ensure that the customer can always find his records when he needs them.

Keep in mind that the cost of storage is the smaller part of the two costs involved in records management. Retrieval costs are always greater than storage. Do not to sell records management based on price; instead, sell it based on "value." So what is the value of records management for most businesses?

Value is found in the mind of the customer. What you value may be different from what your customer values. Value revolves many times around finding your customer's pain and healing it. Your records-management system will make his life simpler. Finding records will no longer be a problem. Lost and missing files will be a thing of the past. Remember to look for their "pain" when selling value.

Regular columnist Cary F. McGovern is a certified records manager and owner of File Managers Inc., a records-management consulting firm that also provides outsourcing services, file-room management and litigation support services for the legal industry. For more information about records management, contact Mr. McGovern at File Managers Inc., P.O. Box 1178, Abita Springs, LA 70420; phone (504) 871-0092; fax (504) 893-1751; e-mail: [email protected]; www.fileman.com.

By Barry Morris

Now that we're deep enough into 2000 to have stopped writing 1999 on our checks, it's apparent that things here on Mother Earth aren't as futuristic as many predicted years ago. We still get around in gas-powered vehicles that roll on rubber tires, cloning has been limited to sheep and other lesser species, and no colonization of distant planets has taken place--yet.

Our society also appears to have emerged from the millennium red alert virtually unscathed. Few Y2K incidents of any kind were reported in the mass media, and certainly nothing that could be called catastrophic. This seemed to be the proverbial green light for everyone to get on with their lives and resume normal activity. Among other things, this meant that computer owners could stop worrying about whether or not it would operate come Jan. 1, and once again focus on using the machines for their intended purpose: to enhance productivity.

For self-storage operators, the computer can be like a trusted friend. Virtually any management or accounting function--from inventory management to printing of deposit tickets and leases, invoicing and late-charge processing, lock-out of delinquent tenants, gauging the effectiveness of marketing efforts, and much more--can be accomplished, depending on the software package you choose. The right software package greatly enhances the efficiency of every task it performs, leaving managers with more time to accomplish other things and add more money to the bottom line.

Whether your facility has 1,000 units or 100, computerization has its advantages. But for smaller facilities that have sufficed with manual recordkeeping since their inception, the prospect of turning everything over to a machine can, understandably, be intimidating. For others who got in on automation's ground floor with a DOS-based system, the emergence of Windows as the operating system of choice is creating pressure for many to either convert to Windows at considerable cost or be left behind. There are nearly as many concerns as there are facility operators experiencing them. But regardless of which system is used, most agree that the effort required to automate a self-storage business is a short-term inconvenience with long-term benefit potential.

Virtually Any Task Possible

While it's true that a software program can't fix broken door locks or persuade an indecisive potential tenant to sign on the dotted line, it can certainly simplify management and financial functions so that a manager has more time to devote to facility maintenance, customer relations and other duties. Other benefits of the self-storage software packages available in today's market include greater operational accuracy, revenue enhancement, more detailed management reporting and theft deterrence.

Most packages will generate any paperwork needed by a self-storage owner or manager. Bills, statements, notices, letters, sales and transaction reports, move-in/move-out reports, payment and fee collection reports, and overdue/delinquent tenant reports are among the documents routinely produced by most available software packages. Most also provide integration with familiar accounting software, such as QuickBooks, and interface with access-control systems to deny entry to delinquent tenants. On the other hand, some packages have unique features, or subtle variations in their methods of performing functions, that may make one more suitable than another for your operation.

Graphic interfaces, such as facility maps, are offered by a handful of software vendors. These maps vary in flexibility and function, but those vendors offering them are careful to ensure that operators can use them easily. "The property map needs to be flexible," says Markus Hecker, marketing director for SMD Technologies of Wake Forest, N.C., whose SiteLink package offers a printable property-map feature. "It's critical that the user can go into the map at any one time and change it around. You need to be able to turn two units into one, and vice-versa, and your map needs to be able to reflect that. You also need to be able to add units on and delete units. What users don't want is to have to depend on us--to have to send the program back, have us make the change, and so forth. The program needs to be flexible and user-friendly enough to let the operator do that."

Printing the map falls into the same category. With self-storage being the hands-on business it is, a frequent walk-through of a facility is seen by many owners and managers as the best way to keep track of what's going on. "Some people like a walk-through list to audit their units, to make sure all the units that are supposed to be overlocked are, in fact, overlocked," Hecker says. Other clients mainly use the map feature so they can print it out for customer use.

HI-TECH Smart Systems of Kailua, Hawaii, includes a highly versatile property-map feature in its RentPlus package. The map allows the user to click on an individual unit on the computer screen and be able to see its immediate status through color-coding and other information. If the unit is occupied, says HI-TECH President Mike Richards, all of the current renter's information appears on the screen, including his account, and gives the user the option to take payments, move the occupant out or change an address.

"When they're looking at the screen, they see a map of their facility, where the various units are laid out in the relative size, how they're laid out and where the corridors and aisles are," explains Richards. "What we've done is make it a very visual experience to run your facility. You're basically looking at a map of your facility and anything you want to do, you find the unit, click on it and off you go."

Empower Software Technologies of Sun City, Calif., also offers a useful interactive-map function in its Storage Commander package. When the cursor is moved over a unit, a unit-information box is immediately updated with tenant, account status, contact and other vital information. The package also has a photo ID module that allows the manager to take a digital picture of a customer's driver's license.

The Task Master software package, produced by Real Management Systems of Scottsdale, Ariz., "can be used as a completely paperless system," says Gregg Genualdi, company president. "If somebody came along and said that they never wanted to have a printer again, this system could be a paperless system. Every document is stored in a file so that you don't have to print things out (for filing purposes). If someone comes back five years from now and says 'I need all my receipts,' you can go in and print all the receipts again in our system. They're stored in the file structure of the system so we can regenerate any document."

Financial controls are also important to self-storage owners. What was perhaps the most dangerous drawback to manual accounting systems, and even some early computer programs, has largely been eliminated in newer software packages.

"Within our system, you are not authorized to delete transactions that the system creates automatically," says Ron Plamondon, president of Traverse City, Mich.-based Integrity Software Systems. The company's software, Mini Storage Personal Accountant, touts its financial controls as a major strength. "You can reduce tenant balances, for instance, by issuing credit memos. But what it does is leave a record in the system for the owners to review any discretionary credit that might have been applied to somebody's account. It's a good way of making sure that all the cash that may come into the facility actually goes into the bank and is not tampered with by the managers. We've had several instances where inappropriate activities by managers have been detected by our software. It's just something to keep non-owner managers honest."

Other features, such as pay-at-the-gate, create convenience for both tenants and managers. Besides allowing facilities an instant, hassle-free way to recoup delinquent rents and late fees, it provides tenants a way to reconcile their accounts at any time, even after hours, without embarrassment.

Is DOS Being Thrown Out the Window(s)?

The popularity of the Microsoft Windows operating system might lead one to believe that DOS-based systems are fading away. But in the self-storage industry, nothing could be farther from the truth. Most vendors have developed and introduced Windows-based software packages, but DOS programs are still relatively easy to find, and many long-time DOS users are steadfastly clinging to their tried-and-true product.

Opinions differ greatly on DOS's long-term viability in a Windows world. Some owners find that the flexibility it allows them for reports and other key functions works well for them. Others claim to have had less-than-desired results with Windows experiments.

Conversely, at least one vendor contends that, in the self-storage industry, DOS's life-support plug has been pulled. "DOS is a dead issue," says Michael Kelley, owner and president of Dilloware Inc., based in New Braunfels, Texas. "You could write a DOS program to deal with a four-digit year. But the analogy I like to give is that it's kind of like owning a 1970 Chevrolet that uses leaded gasoline. When unleaded became pretty much the main thing, you could still find leaded gasoline for awhile. But now, forget it. You can't get it. It's the same way with computers. Getting people who are familiar with DOS and can repair the older machines is becoming a bigger and bigger problem."

"Our old DOS program was not Y2K compatible, so we got everyone converted to our Windows program, and we're putting the finishing touches on changes that have been requested by our users," says Integrity Software's Plamondon, who adds that the company's conversion efforts met with modest resistance. "We had two or three customers who were not comfortable in a Windows environment, and really didn't want to convert. We struggled in getting them to commit to converting--they didn't want to deal with the mouse, with slide bars, and all that. They just liked the old DOS version better.

"But I think, for the most part, everybody realized that they pretty much had to do it. The biggest complaints some of them had was needing to buy a new computer, because the computers they had were 486s and 386s in some cases, and worked just fine doing what they were doing. But the other side of that is that the tools we used to create the application in the DOS environment aren't available anymore. We were pretty much forced to convert as well. We waited as long as we could, but we just felt this was a good time to convert totally from the DOS environment."

Mike Skrentny, president of Scottsdale, Ariz.-based Mystic Systems Technology Corp. (MSTC), likens the situation to that of the mid-1980s, when many hung onto their Apple computers while most of the corporate world gravitated toward IBM and IBM- compatible machines. "People began producing programs in DOS and, pretty soon, everybody moved over to the DOS platform," he says. "Right now, we and companies like ours are focusing all of our programming attention on our new Windows products, so we're not doing a lot of development in the DOS program. Ultimately, what will happen is the Windows programs will so far outshine the DOS programs that it will just be a logical business choice to move over. Sooner or later, people will see that there are enough reasons to do it."

Of course, hardware requirements for running Windows instead of DOS are significantly different. The best way to ensure you have the necessary computer power to run the management software of your choice is to consult with your software vendor. He can tell you minimum and recommended hardware requirements for programs, and can probably help determine whether your existing system will make the grade. Generally, new Windows-based PCs come with enough memory to run any self-storage management software, but buyers should always ask to be sure.

Other vendors take a more middle-of-the-road stance in the DOS vs.Windows debate. "We have lots of DOS customers, in terms of both security and software," says Dave Reddick, president of Sentinel Systems in Lakewood, Colo. "I may have 3,000 to 4,000 DOS customers out there, so we certainly aren't going to abandon them. We continue to support them, and where we can be creative, we do a little bit of development; but you don't have the tools to do much development with DOS anymore."

Reddick says Sentinel has about 1,500 Windows systems in place and has offered the software for about four years, with many of the usual trials and tribulations. "The first two years were really ugly, but the last two years have been very nice and productive because it stabilized and it performs well," he says. "A lot of the early problems you saw have been fixed, or have gone away, or Microsoft has done some work and their portion of the problem has gone away. We're doing lots of development on the Windows systems, and that's where all the new, flashy stuff is going to come from because you've got the tools to do it.

"Secondarily, you can hardly buy a computer anymore that doesn't have Windows on it. Plus, if you're running certain things in a DOS environment and you try to run them in a Windows operating system, you're going to have difficulties, and you'd just as soon avoid that."

Ramona Taylor, president of Walnut Creek, Calif.-based Space Control Systems, agrees. "Sooner or later we're all going to have to be on Windows," she says. "Microsoft keeps threatening to do away with the DOS prompt in their new versions, but they haven't done that yet. And I think that would be hard to do, because there's a lot of DOS software out there that works. But a lot of hardware people are now making printers, modems, etc., that only talk to Windows." What's more, many features that managers now look for in software--such as Internet access, e-mailing rent reminders and faxing via computer--are possible only through Windows.

Windows systems can offer an experienced user several advantages over DOS, including time savings, though DOS devotees will find that Windows takes some getting used to. Even finding the right touch for moving the mouse pointer around can be challenging for some people, but most users agree that the need to grasp the nuances of Windows is unavoidable.

In order to make the final product as user-friendly as possible, development of Windows software is a somewhat longer process than with DOS. "Windows is considerably more complex (in terms of updates) than the DOS environment," says Reddick. "Some portions of what the developers have to do may be faster, but the overall process isn't. There are many more things to be considered, and you often have many programs running at the same time, and there can be interaction between the programs. It may well be slower, and I think that's why everybody has taken awhile getting their Windows products to market."

Ancillary Profit Centers

These days, self-storage managers nationwide are discovering how ancillary products and services such as boxes, tape, packing materials and even truck rentals are giving a boost to their bottom line.

Many storage facilities are also taking advantage of another type of profit center--their otherwise idle space. Many law firms, banks, hospitals, insurance companies and others have a volume of critical business records--patient files, client files, as well as backup tapes for data processing, etc.--that get rotated off-site for a period of time prior to destruction. Often, these firms just don't have the room or don't want to pay for the valuable office space to keep all those records on site. So they ship them to outside facilities, such as self-storage facilities, where they are stored and retrieved as needed.

For this special niche area, Irvine, Calif-based O'Neil Product Development offers a product known as RS-SQL (Records Storage, The Sequel), the successor to the company's original RSWin (Records Storage for Windows) program. "Ultimately, many companies that are either in self-storage or moving and storage can become frustrated with turnovers of rent, and with a certain portion of their storage being empty for a portion of the time," says Jim Teske, O'Neil sales manager. "In records storage, one of the biggest advantages is long-term residual income. When I gain a relationship with a law firm to manage its business records, those records sit off-site and, once I've got the account, as long as I do a good job of serving it, I keep it. A lot of people in (many businesses, including) self-storage, jump into the records- storage business for that very reason."

Many don't think of unit security as a source of income enhancement, but it can be. QuikStor, which produces keypads and alarms in addition to its software, offers empty alarm boxes for installation on storage-unit doors, which can be replaced by working alarm boxes for tenants who choose the option. "Crooks can't tell the empty boxes from the real ones," says Doug Carner, marketing director for QuikStor. "What you do is rent out the security to the tenant--we have the only system you can rent to tenants--and as you rent them, you replace the empty boxes with the real ones so that the tenants are paying for the security. (With) all the other systems, you have to just buy it outright and hope you get your money back. Here, you only put it up as tenants want the service. Carner says the reasonable price of the alarm boxes--$60 per unit--allows operators to quickly recover their investment even at modest rental rates.

Universal Frustration

The concept of universal interface, a standardization of software protocol to allow any management software to automatically integrate with any security/ access control system, has been discussed for years, but has never progressed far beyond the talking stage. And as time continues to pass without further progress being made, those who would like to see it happen are conceding that it's unlikely.

"I'm doing everything in my power to make it happen," says QuikStor's Carner. "But there are companies out there that talk cooperation but don't do anything. Ideally, I hope it happens. But after having seen companies that say they're going to integrate but don't do anything, I don't think it's ever going to become a reality. There's too much turf war going on."

Most any company's management software system can be integrated with any other's security/access control system, and this task is often undertaken on an individual-case basis by a vendor--usually the second one to come into the picture--as a courtesy to a customer. "Interface is an interesting thing because it only exists for one purpose, and that's so someone can make a sale," says Reddick of Sentinel, which produces both management and access-control systems. "But once the sale is made, there isn't necessarily any motivation to update the interface or to maintain it over a period of time."

Dealing with post-integration problems presents another challenge. "There's really a very cooperative effort between most (vendors)," says MSTC's Skrentny. "We talk with each other and we share the protocol for our interfaces and work with them. The problem is that when you put it out in the field, there are likely going to be issues that come up, and the question is, how quickly and efficiently will those issues be (addressed) without finger pointing?"

Reddick adds that companies that provide both management and access-control systems "are not welcomed very easily into the interface scheme of things, because one side or the other feels like, at some point, we're going to take away their business because we do both." However, the efforts of companies such as QuikStor and Sentinel, which have both contributed significant dialogue and data to the universal-interface concept, would seem to invalidate those concerns.

"Everyone's got an opinion," says Skrentney, "and everyone usually thinks that their opinion is the best. What I believe needs to happen is that someone like the Self Storage Association needs to set a standard and control it, because they are the voice of the industry. They need to say to the vendors, 'This is what the interface needs to be and what the structure needs to be. We've hired a consultant to go over this, and this is the decision that we've made.' I think if that were to happen, the vendors could get standardized."

Tips for Taking the Plunge

Most lists of do's and don'ts for software buying adhere to common principles. First, when compiling a list of vendors, it's best to stick with those specializing in the self-storage industry, as there is no substitute for experience-based knowledge. Trying to adapt software designed for other purposes, such as apartment management, will likely produce disappointing results.

Research product offerings. Obtain demonstrator copies, references and brochures from several companies. Attending a trade show makes side-by-side demonstrations possible and allows direct, in-person contact with salespeople. If visiting a show is not possible, most vendors offer an abundance of information on the Internet, and some even provide downloadable demo programs on their web sites.

Utilize the experience of your peers. "You've got to talk to references in your area to find out what the support is like, what works with the software, what doesn't work, how the experiences of training managers is, what help they got from the software company, things like that," says HI-TECH's Richards. About references: Getting input from other operators is never a bad idea, but remember that software vendors only include their satisfied customers on reference lists. Don't simply ask fellow operators about the product they're using and why they like it; also find out if they tried other products before settling on their final choice. By doing this, you'll learn about potential red flags that may never arise in a salesman's demonstration.

The most important rule in choosing software is to take ample time to find a package that fits your needs to the greatest extent possible. "I would encourage people to be very thoughtful and to do their homework before they buy anything from anybody," says Reddick. "I would encourage them to make their own comparisons. Business has been good in storage (software); many of the vendors are doing just fine. They don't have to get ugly and dirty about trying to make a sale. But they often may overpromise. From my point of view, I'd rather not sell a package if customers aren't sure that it's going to do what they need it to do, because there's not enough money in it to make too many bad deals."

"We also try to emphasize that they don't rush their decision, which, unfortunately, is fairly common," adds Richards. "Take a new facility, for example. What often happens is that they'll order software demos maybe three or four months before they open. But they won't look at them until two or three weeks before they open, and at that point they don't really have time to study the program as much as they probably should. All software essentially does the same basic functions, but like everything else in life, the devil is in the details, and there are often very subtle things that may make the difference between what works for you and what doesn't."

Space Control's Taylor has a theory why people sometimes don't exercise the care they should in selecting software. "It's the marketing that Microsoft has done," she says. "They've convinced everybody that anybody worth their salt is in Windows. It was a good thing for them to do to promote their Windows product, but it's causing a lot of havoc among software people and their users. People seem to have dropped everything they know about how to look for software and just said, 'I want Windows."

"It's not necessarily easy to build a good Windows package, and because there are lots of new programming languages that do a lot of the work for you, it's almost easier to build a bad package," Taylor says. It's also important when choosing software to not only consider your present and future situation, but also that of the vendor. Are they going to be there for you every step of the way while you reach your comfort zone? Are they going to be there down the road? And exactly what value does the vendor place on personal relationships?

"One of the things that came as a surprise to me in this business is the length of time software companies have a relationship with their customers," Richards says. "We tend to think of it as selling a product--you sell the product and you're done with it. But relationships between software vendors and their customers are much more similar to relationships people have with their accountants and attorneys. These are lifelong types of things. I have customers where I deal with the children of the people who bought from me originally."

What's on the Horizon?

Vendors continually work to improve their software packages, adding features and making existing ones better. The Windows operating environment is still new to many vendors, a fact which will require those vendors to stay current with improvements and upgrades.

Taking advantage of upgrades as they are introduced is crucial, says Richards, regardless of which vendor's system is used. "It's a changing universe, especially in software and computers," he says, "so it's best to plan on continuous, incremental upgrades, rather than putting it off year after year so that once every five or six years you have this massive change. You're better off doing all the incremental updates and accepting that change a little bit at a time. Otherwise, if you wait too long, your change is too radical."

Genualdi feels his company's Task Master system is a precursor of a future standard. "More and more, I think systems are going to move away from paper down the road," he says. "People don't want to print second receipts for everything, or print all these reports. If they can just go back and regenerate them through the computer, they will. As long as people back up their systems to guard against crashes, the information will be there forever."

Among the new bells and whistles expected in the near future are wireless keypads, along with remote consoles that allow a manager to open and close units and gates and make other system changes from anywhere on the property. Still, the main focus of many vendors will be to further develop their Windows packages, ironing out glitches and incorporating enhancements as the Windows system itself evolves.

However, a growing consensus is that the future of self-storage software lies on the Internet, another advantage for the Windows system. "It has only begun to impact our businesses and our lives," Richards says. "It's going to be very different five years from now, whether we're talking about backing up your data over the Internet, or customers paying their bill over the Internet, or Yellow Pages being gone and replaced completely by online Yellow Pages. It's going to really change things. Owners should be training themselves and their managers on what computers are all about. And that, today, means Windows. They should start with that, and then go on to the Internet and understand how to do that. It's just going to become a more essential tool."

"In my opinion, the Internet is going to be a fabulous tool for the multi-facility owners, management companies and so forth," says Tom Smith, Empower Software's managing director. "We've got some really exciting Internet-based enhancements to our package. It's a very viable market. It's going to happen, and we're going to be there. But the mom-and-pop facilities don't need it--they don't even want the Internet on their system because they don't want their managers spending time on the Internet vs. doing other things."

But MSTC's Skrentny says the Internet should be viewed as an asset, not a distraction. "You're supposed to be hiring business managers and people that you trust," he says. "You leave them at your storage facility all day long and entrust them with a multi-million dollar complex, and your whole financial future is in their hands. They should be mature enough to be able to handle the Internet and the responsibilities that go along with that. You would not prohibit someone from having a phone at their facility and having long-distance (service), but you expect them not to violate that privilege. It's the same type of thing. If you don't have the type of managers that can handle that, they're probably not good managers for you to have at all."

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SOFTWARE COMPANIES

Acorn Products/DCAL Computer Systems
4100 Adams Rd., Suite C101
P.O. Box 3936
Bartlesville, OK 74006
Phone: (918) 333-2996/(800) 328-3225
Fax: (918) 335-0240
Web: www.rent.net/resources/dcal
Acorn Products/DCAL Computer Systems, a producer of software products designed for self-storage, has been in business for 20 years and serves the United States, Canada, the Bahamas and Australia. Acorn Products for self-storage consist of UNItroller Management Software, UNIkey Access Control Software System, Vertical Lift Gate, Central Office Systems and all ancillary items to provide complete control of a self-storage facility. UNItroller Management Software and the UNIkey Access Control System both operate on one computer simultaneously. The UNItroller system communicates to the UNIkey system who to lock out for non-payment, and will automatically unlock them when their account is brought current.

Automation Technologies
P.O. Box 47
Marcellus, NY 13108
Phone: (800) 817-7706
Fax: (315) 673-0911
Web: www.sftware.com
E-mail: [email protected]
Automation Technologies has been serving the self-storage industry since 1991. The company's flagship product, The Storage Management System for Windows, has been shipping since 1997. The open architecture of the package allows exports to Microsoft Office™, various electronic gate systems and Quickbooks™. Automation Technologies prides itself in providing a stable, intuitive product backed up with excellent technical support. The standard version of the Storage Management System includes all of the basic features of the software, priced at $1,495. The professional version includes the gate interface, networking, photo capture and automatic credit-card billing options, priced at $2,495. A technical-support program provides unlimited access to the toll-free number as well as periodic updates at $199 per year.

Dilloware Inc.
2825 FM 2722
New Braunfels, TX 78132
Phone: (800) 880-0887
Fax: (830) 899-2124
Web: www.dilloware.com
Dilloware Inc. produces billing and accounts-receivable software affordable to all self-storage owners. The Billing Clerk automatically bills and tracks monthly rents, produces monthly statements, aging, past-due notices, late charges, print receipts, etc. Owners have the option of printing a statement at any time, not just at billing time. Customer history is maintained for as long as needed for an unlimited number of customers, and there is a large notepad for information on each (comments, security codes, credit-card information, etc.). The Billing Clerk sells for one low price, whether a facility has 100 or 10,000 units. The program is intentionally designed for easy installation and use. The Dilloware programming staff has been producing easy-to-use, affordable billing software for more than 18 years.

Empower Software Technologies
27851 Bradley Road, Suite 120
Sun City, CA 92586-2202
Phone: (877) 672-6257
Fax: (909) 672-6258
Web: www.storagecommander.com
E-mail: [email protected]
From its inception, Storage Commander was designed as a 32-bit Windows-based modular system, allowing owners of small, medium or large facilities to purchase a basic management system at an inexpensive price, with the ability to add on additional components for increased productivity as needed. This concept also allows Empower to offer turnkey versions of Storage Commander to meet the needs of small, medium or large management companies requiring advanced functions such as Internet facility control, manager security access based on unique I.D. and password, photo I.D. system, interactive site map, comprehensive tracking of all accounting and facility activities, and a complete range of facility and financial reports.

SOFTWARE

HI-TECH Smart Systems
407 Uluniu St., Suite 312
Kailua, HI 96734
Phone: (808) 263-7775/(800) 551-8324
Fax: (808) 261-4447
Web: www.hitechsoftware.com
HI-TECH has been producing software for the self-storage industry since 1986. RentPlus is HI-TECH's self-storage software for Microsoft Windows, and was designed from the ground up to provide all of the features needed for self-storage today and in years to come. Highlights include an on-screen interactive map of your facility, daily, weekly and monthly rentals, multiple plans, automatic charges and notices, complete built-in inventory management, customizable letters and much more. Customer photos and other photos may be attached and viewed with a customer's record. RentPlus includes technical support, updates and a risk-free money-back guarantee.

Integrity Software Systems Inc.
3211 Continental Drive
Traverse City, MI 49686
Phone: (800) THEY-KNOW/(231) 941-2322
Fax: (231) 941-9544
Web: www.integritysoftware.com
Integrity Software Systems' Mini Storage Personal Accountant has been designed to offer self-storage facilities an accounting system that is easy to use and provides strong financial controls. Such controls prevent locking out customers who have paid and helps prevent manager theft. Chris Ray, a practicing CPA, and Ron Plamondon, a professional system developer, are well qualified to design, develop and support installation.

MicroTask Inc.
135 Cambridge St.
Burlington, MA 02038
Phone: (781) 229-6631
Fax: (781) 270-9088
Web: www.microtaskinc.com
Microtask Inc., founded in 1996, has more than 20 years experience in the self-storage market and an engineering team with more than 50 years of collective experience in the development of Windows- and Internet-based applications. In 1998, the company introduced Stor-Rite '98™, designed to enable facility managers to increase the accuracy of their operations, reduce operational costs, make more efficient use of their time and focus on more revenue-generating activities. Stor-Rite can be shaped to fit the way owners do business--customize late fees, lien fees, charges, credits, recurring charges, coupons and more. The program can also process credit cards automatically, interface to the most popular gate-security systems and be shared by multiple computers on a network.

MSTC (Mystic Systems Technology Corp.)
7430 E. Butherus Drive, Suite A
Scottsdale, AZ 85260
Phone: (800) BUY-MSTC
Web: www.mysticsystems.com
MSTC (Mystic Systems Technology Corp.) has been developing automated management systems for the self-storage industry for 16 years. The company offered one of the industry's first PC-based property-management software systems complemented by a billing- sensitive, PC-based security system. MSTC is also proud to offer 24-hour-a-day, seven-day-a-week technical support to its users. Windows-based, 32-bit applications for property-management and security systems are available, as well as a full complement of security hardware to meet all facility automation needs. Additionally, MSTC now offers a one-of-a-kind Computer Based Training (CBT) system with complete on-site, interactive, property-manager training and testing tools.

QuikStor
13908 Ventura Blvd.
Sherman Oaks, CA 91423
Phone: (800) 321-1987/(818) 990-5575
Fax: (818) 501-5785
Web: www.quikstor.com
E-mail: [email protected]
QuikStor is a complete software, access and wireless-door-alarm solution. Its mini-storage management software can automatically print and/or e-mail delinquency notices and reports overnight, automatically collect rent by credit card, integrate with QuickBooks, support multiple terminals, integrate digital photography and provide interactive site graphics. QuikStor access control keypads support both numeric codes and magnetic cards (such as driver's licenses, AAA and credit cards). Delinquent residents can use their credit card to pay at the gate without the manager's assistance. The large keypad display provides intelligent feedback to the tenant. The integrated intercom allows communication up to a half mile, and a keypad camera automatically displays a picture of each person attempting access, storing it digitally on a manager's computer for later reference. QuikStor individual unit door alarms are wireless, easy-to-install security that can be rented to residents as an attractive profit center.

Real Management Systems
3200 N. Hayden Road, Suite 230
Scottsdale, AZ 85251
Phone: (480) 941-6047/(877) 877-7325
Fax: (480) 941-4121
Web: www.realmgmt.com
E-mail: [email protected]
TaskMaster is a user-friendly, 32-bit Windows-based management-software program designed to handle all aspects of a self-storage business. The client-based system simplifies managing collections on delinquent accounts, assigning multiple rentals, and consolidation of billing. TaskMaster manages merchandise sales, inventory, insurance and other income, and provides infinite client history for use as a powerful marketing tool. The Master Access System features a hard-wired Multiplexers alarm system. Keypads offer system intelligence and the latest technology, and are equipped with a light-sensing LCD display, back-lit keypad and a built-in intercom speaker, in an all-weather aluminum case with a card-swipe option. Responsive, cost-effective support is available 24 hours a day, seven days a week. Contact RMS for an operational demo CD.

Sentinel Systems Corp.
1620 Kipling St.
Lakewood, CO 80215
Phone: (800) 456-9955/(303) 242-2000
Fax: (303) 242-2010
Web: www.SentinelSystems.com
Sentinel Systems has been a leader in providing security electronics and property-management software to the self-storage industry for more than 25 years. What began as a way to eliminate break-ins for a group of self-storage facilities has grown into one of the largest security and software suppliers in the industry. The firm now serves more than 15,000 systems worldwide, with a tenant-user population in the millions. The company's mission is to provide superior products and outstanding customer service through innovations in technology, people, systems and marketing.

SMD Technologies Inc.
152 N. White St.
Wake Forest, NC 27587
Phone: (919) 562-6711
Fax: (919) 562-0269
Web: www.smdsoftware.com
E-mail: [email protected]
SMD Technologies has been developing Windows-based programming since the early days of the Windows operating system. The company's experience has led to SiteLink 98, a powerful, easy-to-use tool for managing all areas of self-storage operations. Features of SiteLink 98 include download capabilities for home offices, controls for importing data into QuickBooks, customizable letters and notices, and more. Industry-first functions of SiteLink 98 include the Task Manager, which tracks deadlines and past-due events. SiteLink 98 also features customizable forms and a printable property map that is unsurpassed in its ease of use. According to Markus Hecker, marketing director, SMD Technologies will continue to innovate its software and will soon include features such as networking capabilities, enhanced communication functions and more.

Space Control Systems Inc.
2815 Mitchell Drive, Suite 205
Walnut Creek, CA 94598-1622
Phone: (800) 455-9055/(925) 943-6222
Fax: (925) 943-6370
Web: www.spacecontrol.com
E-mail: [email protected]
Since Space Control's inception in 1984, President Ramona Taylor has kept the company's sights on providing a software-management package to address the unique requirements of the self-storage industry. To meet this goal, the product has to be instantly understandable to anyone in that field, intuitive to the novice user and highly automated. When research indicated that absentee owners needed on-site control, Space Control filled that need by auditing every variance from standard procedure. From the smallest single facility with 85 spaces to the largest facility with more than 5,000 spaces, to the largest single company, with more than 1,400 locations, Space Control has met the demand. The same philosophy has now been applied to Space Control II, the new Windows package.

Umbrella Systems Inc.
P.O. Box 1808
Poulsbo, WA 98370
Phone: (800) 544-0652
Fax: (360) 697-3165
Web: www.umbrellasoft.com
E-mail: [email protected]
The Umbrella System is a complete software package for the management of self-storage facilities. Programmed from the ground up, the Umbrella System is not an adaptation of an existing software package, but is designed to be a powerful, flexible and simple product to use. The strength of the Umbrella System is that it maintains a line-item record of all transactions, giving the user an accurate account history, preliminary lien notices, an itemized rent statement and fully auditable cash-flow statements.

By Rick Kaczmarek

Whatever your involvement in the self-storage industry, you'll agree that the easiest way to improve performance at a specific property is to improve the effectiveness of the sales programs there. While volumes have been written on the topic of training employees, there are some simple steps you can follow to develop a sound training program geared to improving sales.

First, place a proper emphasis on sales within your company. Start by putting the word "sales" in the first line of everyone's job description. The owner or management company is responsible for generating traffic by getting people to walk in or telephone the property. The site management team is responsible for converting those prospects into paying customers.

To set the right tone for proper training, you need to convince your employees of the advantages of the new procedure or new product. Take the time to explain why you are implementing the change and listen to your managers. Continue the conversation until you have created "buy-in" from all of your employees.

Your commitment to training should be backed with money and time. Budget for sales training by planning to spend a set amount each quarter for training programs. How much you spend should be determined by your current sales level, your improvement goals and your investment objectives for the property.

Training is available from many sources. The very best training is face-to-face instruction. If you have employees in your organization who are exceptional in one area of sales, assign them to assist or conduct the training in that area. You can also purchase books, audio tapes and video tapes on a wide variety of training topics. You and your managers can also attend industry seminars.

Your third-party management company should regularly prepare and conduct training meetings geared to specific sales topics. Industry professionals or other management companies can be engaged to create customized training programs for your managers. These programs can run from $1,000 per employee to several times that, depending on your level of commitment. If you are spending that kind of money, make sure the program is tied to some sort of measure that will permit you to evaluate your managers' improvement.

Training topics can be broad or narrow, but training activities that involve lots of practice are most effective. Managers should practice telephone techniques by role playing with the instructors and other managers. This is also the best way to improve lease-presentation skills, adding ancillary products, and showing units. Depending on the skill level of your managers, the amount of training needed in each area of their jobs will vary. Fully competent managers are often capable of fine tuning their phone skills with a monthly telephone shopping report and a tape of the phone call. Other managers may require more individualized time outside of your formal training sessions.

In trying to improve sales skills, start small, with some basic skills, and add one skill at a time. This permits you to build the employee's confidence with a series of repeated small successes. You will find that the more attention you pay to improving sales skills, the time required to master each new skill will decrease substantially. Don't be discouraged by small setbacks. Learning new skills is a lot like a roller coaster. Think back to your early years in school and recall how some subjects came very easily to you, while others were much more difficult to master.

Your two training mantras should be, "This is a small change" and "I know you can do this." Obviously, it is important that you believe each of those statements, since managers can tell when you are insincere. The ultimate goal in training managers is to create a heightened sense of self awareness that permits them to see themselves more clearly as they engage in the sales process every day. Managers who are aware perform self evaluations and are able to identify, for example, where in the sales presentation they lost a particular sale. This condition is not unlike a world-class athlete who is able to identify exact mistakes made in competition, in order to isolate those areas for additional practice.

Once your managers have shown some improvement, don't be afraid to continue raising the bar. As individuals' abilities improve, continue to challenge them to become even better. Recognize and reward progress, but do not fall into the trap of settling for some steady level of performance until that effectiveness is as good as you can expect. While no one is perfect and it is impossible to sustain periods of 100 percent effectiveness, the goal is to sell each and every product in the best manner.

Exceptional sales people in self- storage seemingly never stop selling. They generate impressive closing ratios, improve occupancies and continue presenting additional programs, including credit-card auto-debit payment plans, customer-storage insurance, moving supplies, rental trucks, customer-referral programs and changes to policy. Delinquency problems can also be attacked through improved sales techniques.

Assemble the specific sales tools that help managers to do their jobs. A one-page telephone script is an excellent tool, along with a call-back script and scripts for various objections. Try to keep it very simple. Work with your managers to put together some quick reference guides in three-ring binders. If you have various promotional pricing programs, put them in the binder. The key is to make all of the necessary information one cannot realistically memorize available at your manager's fingertips.

Use intelligent measures to monitor the progress of your employees. Measure telephone-closing ratios (70 percent to 80 percent indicates strong sales). Other measures include in-person closing ratios, lock-sales penetrations, box-sales penetrations, insurance sales and performance in standardized "mystery shopping" programs.

Recognize and reward progress for individuals and teams, and be diligent in your pursuit of improved sales effectiveness. Continued focus on sales training is the path to the promised land of sustained profits.

Rick Kaczmarek is a self-storage management guru who focuses much of his professional energy on improving sales effectiveness. He publishes a variety of resources for everyone in the storage industry. He can be reached at (727) 785-9446; e-mail [email protected].

By Harley Rolfe

Most self-storage operators set themselves up for the most vicious type of business pressure. The story of unbridled price competition needs to be told.

I have usually danced around the subject, trying to avoid any doom-and-gloom expressions about troubling aspects of the industry. After all, this is a family show. But words like "quicksand" and "quagmire" spring to mind when dealing with straight price competition. The causes and effects are well-known.

"Location" distinguishes some facilities from others, but additional building is diminishing that distinction in many areas. There are regular references in this magazine and in the recent Inside Self-Storage Factbook about "saturation" and overbuilding. The subject is on the table.

Our Soft Underbelly

The industry has this dark side, and most offerings are a commodity. Such offerings are quite susceptible to aggressive price competition. That's the soft underbelly of self-storage ownership.

Let's trace the buy/sell dynamics of a commodity market. The best example is the agricultural commodity markets. The exchange itself (Chicago Mercantile Exchange) defines for each category (November wheat, April porkbellies, etc.) all the important features of each traded item. Those are primarily the quantity/sale, grade or quality, delivery point and terms. All are carefully and deliberately standard. People throughout the world can buy and sell, knowing exactly what they're doing. Bidding sets the price. No one knows in advance what that will be. Such is the fate of agricultural-commodity suppliers.

And self-storage? We offer proximate identical choices, too, then give callers our standard language (6-by-12, 10-by-20, etc.), and often post our prices on the office wall. That's a commodity approach. But we control our situation, farmers don't.

The Prospect Needs a Reason ... Anything Will Do

Every buyer must have a reason, some difference, on which to base his purchasing decision. He cannot act without one. When confronted with a situation where everything (including price) is the same, the prospect must resort to something exterior to the situation to permit him to act. He may flip a coin, choose the facility with the name that comes first in the alphabet. Ridiculous? Not when the prospect needs to do something and can't discern any difference. He knows that he's done something goofy, but your marketing program didn't give him any choice.

It's Just a Matter of Time

When the first facility goes up in a given area, it probably underserves it. The owner may have limited capital or ground or is conservative (or his bank is). So there is market space for another facility, and when it goes in, nothing much happens. They're both full. It seems that additional units can be added with impunity. But lurking in the economic landscape is a cliff. And the arrival at the precipice is sudden. When the additional units being added finally exceed the area need and facilities are experiencing unacceptable vacancy, any operator's single recourse is to differentiate itself by dropping rates.

How Far Is 'Down'?

The facility has to drop rates below those of its rivals or there is still no reason for the prospect to act. By how much? Enough to give the prospect reason to stop shopping. That can be very little if the prospect is tired of bargaining for nickels. With self-storage, the whole process seems a little silly because our rates just aren't that high. Is there a real difference between $45 and $47 per month? Nope. The issue here is in providing the prospect with some way--any way--to distinguish one choice from another and permit a prospect to make that decision. It's imperative. He's stuck until he does. That's how the spiral begins. If just meeting the competition were enough, then prices might stabilize. But the fact that the price must beat the other guy forces the downward spiral until something enters the equation to stop it. Is it any wonder that this process tempts suppliers to get with their brothers to stop the rate slide? In so doing, they risk the farm, but that may seem like a reasonable risk, given the box they're in.

The tragic thing is that as the price drops, no additional units are being sold. The price elasticity of self-storage is already very low, so lowering the price just means that the amount of collective income from all units sold drops, and nothing good accrues to the facility owners for the sacrifices they make. They just hope that the problem blows over.

Operators are in that fix because they choose not to distinguish themselves to prospects. Little in the original development cycle is aimed at preventing the condition. There is an inherent attitude that, indeed, we are offering a commodity and the smartest thing we can do is control costs. Initially, refuge is taken in citing their unique location as the distinct feature. But that can be ephemeral.

The Scary Part

How far can prices drop? Where's the floor? Unless there is a demand upsurge, they will drop until it is costing (in actual cash outlay) a facility more to supply the next unit (called the marginal unit cost) than it is receiving in income. When that happens, some suppliers will quit. They will not/can not expend cash to stay in the market. They drop out--and save the day for their rivals. The supply is now diminished by the capacity of the drop-out and the prices can stabilize.

In self-storage, what is that marginal unit cost? Well, how much in actual cash outlay does it take to rent one more unit? Damn little. In those cases where there are facility managers, I suggest to you that that the cost of renting the next unit is zero. Thus, there is no barrier to a drop in prices in this industry. That's scary.

Also, prospects will get onto the act and egg you on for discounts and deals. The devil in that situation is that the representations by prospects while bargaining are not reliable. He says that Pete's Storage just offered him $45. Will you match that? You're at $50. You agree to $45. Pete finds out. Guess where Pete's next rate quote will be?

But do you believe the prospect remarks about Pete? I don't. He says that at $45, the contract is yours. We know that he needs a clear reason to buy. That means that Pete was probably at $47 and he's pushing you to get that distinctive difference. But should you have met the prospect bid? You, reader, take it from there. That's the price spiral. For prospects, it's a game; for you, it's a lot more.

Prospects Are Rookies

The prospect's situation affects yours. Most prospects are rookies at buying self-storage. Because any buying decision can be stressful, the buyer wants the process to be as easy as possible. Thus, his inclination is to try to boil off all the features in the various facilities' offering choices to nothing, freeing him to simply choose the lowest cost. Nothing is easier than choosing the "cheapest." Even rookies can do that. That opens the way for the above sequences to kick in.

Too Conceptual?

Once you are in the price war, there is little you can do. The only indemnity is prevention if you wish to avoid this quagmire. You simply cannot permit yourself to be seen as the same as your competition. To overcome the desire of the buyer to see all offerings as the same takes some effort. Time for a dose of marketing!

Missed some previous issues? Check the web at www.hardnosed.com.

Harley Rolfe is a semi-retired marketing specialist whose career includes executive-level marketing positions with General Electric and AT&T. He also owned lodging and office facilities for more than 20 years. Mr. Rolfe holds a bachelor's degree in economics from Wabash College and a master's degree in business administration from the University of Indiana. He can be reached at his home in Nampa, Idaho, at (208) 463-9039. Further information can also be found in Mr. Harley's book, Hard-Nosed Marketing for Self-Storage.

By Michael Zervas, Michaels/Wilder Group

Doing business without advertising is like winking at a girl in the dark. You know what you're doing--but nobody else does.

Let's talk about turning on the Internet for your business. The goal: to leave the "dark ages" behind and explore new and exciting ways, using state-of-the-art technology, to spread the word about your business and/or product.

Even in the year 2000, with all the extraordinary advances and opportunities presented via the Internet, many business people still rely on traditional routes of advertising such as direct marketing--print and outdoor billboards, with an occasional foray into TV or radio--to get their message out. Most of us have heard about the power of the Internet, but many of us do not have a clear idea on how to tap its potential or structure our message in the most efficient way possible.

For the uninitiated, advertising on the Internet can be intimidating; however, it needn't be. There are basic elements to creating a presence on the net: web design, site promotion and search-engine registration. All follow basic rules of advertising, and the concepts will come quickly to anyone with advertising experience.

Banner Ads

For starters, let's explore the concept of banner advertising. This cost-effective, attention-grabbing, online mode of communication is typically found on commercial or search-engine pages. If you're visiting web sites with any regularity, you've certainly seen a few of them. Banner ads utilize Internet technology to display advertising-type messages that contain sound and motion. Most importantly, they make it possible for users to link directly to your web site.

The very best banner ads are clever, colorful and creative--and a proven way to connect with potential customers and clients. But, keep in mind that these ads often compete with others on the same page. You want yours to be the one viewers notice first, the one that jumps out and says "Look at me!" One way to accomplish this goal and to get more "hits" (visitors to your site) is to promise the consumer a bonus, such as a free quote or a gift if they visit your site. This has been proven over and over again in controlled studies. To significantly increase the click-through rates for banner ads, utilize this technique.

For example, a plumbing company that specialized in finding and correcting water leaks was looking to broaden its customer base. To promote its business, the company selected a brightly colored, animated banner ad that depicted a man chasing a drop of water--all the way across the Internet page. Alone, it drew attention; but when we added the incentive of a free site inspection for each click-through, the business really started pouring in.

A Few Pointers

A couple of other points should be made regarding the above story. First of all, anyone designing your advertising campaign should recognize the need to measure all of your ads to see which are most effective. Plus, you should test several versions in each campaign. The information you learn today will help the campaign you design tomorrow.

Secondly, and specific to creating banner ads: If there is too much going on in the banner, it slows down the load time and you might wind up trying the patience of the person whose attention you want to attract. Time is of the essence, and the idea is to draw 'em in. While it often helps to have a gimmick, it also is important to remember that sometimes less is more--and you don't want to overwhelm.

Ad Placement

Once you have a great banner ad, the question becomes where to put it. Any buyer has an overwhelming choice between commercial sites, search engines and reciprocal placements with compatible sites. What should ultimately sway your decision is how well the site reaches your potential customer. To determine this, there are objective ways to categorize customers and site visitors. Among these factors to consider are demographics (education, income levels, number of adults vs. children, number of men vs. women, etc.), targeted mapping (geographic locations of homework and play) and psychographics (attitudes and beliefs). When reviewing a site for possible ad placement, request to see these breakdowns. You should also request information regarding how long each visitor stays on the site, and where they navigate within the site.

Perhaps the most unique and exciting reality of banner advertising is that it allows you to track impressions--to learn how many times the banner has appeared in front of a potential customer. Additionally, website owners can track click-throughs to learn how many times the customer actually has been driven through to your specific site. In only a few short steps, you can find out how may people saw your ad, and how many of those sightings turned into actual business. This is very different than the traditional media we spoke of earlier, and one of the main reasons you should consider a focused and efficient campaign on the net.

Determining who should help you put this campaign together is a little tricky, as the Internet industry is somewhat fragmented between designers, media buyers and agencies. Many designers will not have experience in developing media plans, and some media buyers will not be a good fit for designing your banner ad. Therefore, it's highly recommended that you seek out an agency with experience in working with new media. Find an agency that either specializes in it or has a division concentrating in new media. They will have both designers and media buyers on staff to provide a comprehensive program.

Michael Zervas is co-owner of the Michaels/Wilder Group, a specialized advertising agency incorporating three divisions: Yellow Pages, Internet and recruitment advertising. Based in Phoenix, the award-winning firm's client base includes America West, Luby's Cafeterias, Quaker Oats and Conseco Financial Services. Mr. Zervas can be reached at [email protected].

By Pamela Alton

One day, as you are making your rounds at your facility, you notice a broken lamp with no shade sitting beside your dumpster. Within 15 minutes, there also appears an old dresser with one drawer missing. By the end of the day, there is an old, stained mattress, a cat-clawed sofa, a coffee table with three legs and several boxes. Does this sound familiar? It almost seems that once one item is left by the dumpster, it breeds and multiplies.

You ask yourself: Is this a storage facility or the city dump? Many tenants think you are the latter. This sort of thing happens all too often at our facilities. How can you protect yourself from this?

There are several things that you, as the facility manager, can do to keep this occurrence at a minimum. First of all, avoid offering those $1 move-in specials that some of the "big guys" offer. I don't know about you, but I think $1 is a heck of a lot cheaper than paying the $15 or higher fee for taking a truck-load of junk to your city dump. Tenants realize this, too.

Next, you should have concise rules and regulations regarding what happens if a tenant leaves items behind. What will be the fine for leaving a unit dirty, or items in the hallway, on the driveway or around the dumpster? Will you even allow your vacating or current tenants to use the dumpster for their personal use? I look down all the dumpsters at my facilities--they are for the management's use only. On our rules-and-regulations sheet we clearly state that the dumpsters are for our use and that there will be a $50 fee for use of the dumpster. Make it perfectly clear that any and all items stored should be taken when vacating the unit.

One of your job duties as the manager should be to actually walk vacating tenants out to their unit and check that they have removed all items and left the unit in the same clean condition as when they rented it. Let them know that if they leave items behind, you cannot remove their names from the computer, and rent will continue to accrue until the items are removed. If you find tenants have vacated after office hours, call to tell them the same thing--it certainly can't hurt. You would be surprised how many vacating tenants actually return and remove the items rather than pay the additional fees. Let tenants know that any balance due and not paid will be turned over to collections (even though you probably would not do that).

Post signs in your hallways or the inside of interior-hallway doors stating your rules regarding leaving items behind. Conducting regular walk-throughs of your facility will alert you to tenants vacating. Stop, ask if they are vacating and, if so, tell them to be sure to take all items with them and stop by the office to sign the vacate notice so you can remove them from your database. Be sure to immediately remove any items found in hallways, driveways and the dumpster. This will help eliminate any "breeding" and multiplying of other items.

Some of you are thinking, "Well, why don't we just take a cleaning or security deposit?" You could. That is one thing that might deter the tenant from leaving items behind; however, deposits can be a bookkeeper's nightmare. Most of the time, when the tenant has moved, the address is no good and the deposit checks end up being returned. Added move-in cost at the time of the rental should also be taken into consideration. If you are taking deposits and your competitors are not, it might cause a prospective tenant to rent elsewhere.

Being aware of what your tenants are storing and having them sign a rules-and-regulations sheet explaining what happens if they leave junk behind in their units could help. Conduct regular walk-throughs of your facility and have the vacating tenants come to the office and sign out. Escort the tenant to the unit to make sure they take everything they stored with them. These are just a few of the things that might ensure that your storage facility won't become the "other" city dump.

P.S. Thanks to Chris at Shurgard for asking me to write on the subject of "tenant junk."

Pamela Alton is the owner of Mini-Management^®, a nationwide manager-placement service. Mini-Management also offers full-service and "operations-only" facility management, training manuals, inspections and audits, feasibility studies, consulting and training seminars. For more information, call (800) 646-4648.

In his famous poem, "The Hollow Men," T.S. Eliot sardonically notes how the world ends: "Not with a bang but a whimper." And so it does, when all the hubbub over Y2-chaos turned out to be little more than speculation and a few midnight pranks amongst strewn confetti and broken champagne bottles. But then, what would the turn of the century have been without some Nostradamus nightmares and paranoia of apocalyptic dimensions? No fun, to be sure.

What all the whimpering ultimately translates into, however, is a sigh of relief and renewed energy to forge ahead in our businesses, particularly in the area of automation. It's been somewhat of a battle, but self-storage owners are finally adopting and adapting to the computerization of their operations, from management software to automatic security gates to e-business. And slowly, the software for this industry is changing to accommodate more needs and create greater convenience for managers and consumers alike.

Are you converting from a DOS to a Windows system this year? Does your facility have its own website, or is it at least listed on one of the several sites that will include it in their directories for free? Are you using automatic payment systems or communicating with customers via e-mail? These and other options are discussed in detail in "Self Storage Software 2000," which begins on page 16. For further advice on taking advantage of automated benefits and marketing to the "new" self-storage customer, refer to Shaun Ferguson's article on "The Disposable Generation". Finally, Michael Zervas provides some tips on how to best use banner ads on the web to draw attention to your business without breaking the bank.

Of course, all the newfangled automated features and web marketing in the world won't be worth a cheap, foam mousepad if your managers aren't trained for sales. Leading the horse to water is one thing--making him drink is another. Rick Kaczmarek outlines some simple steps for developing a sound management-training program at your facilities and turning your employees into "ultra-salespeople".

I'll be looking for you all at the Inside Self Storage Trade Fair in Buffalo, N.Y. during May 11th and 12th. This is a unique opportunity because, in addition to all the great educational seminars and networking opportunities, you'll learn about acquisition and development of self-storage in Canada, which could provide some new business connections and insights. Now that we know the world isn't ending, why not invest in a more profitable future?

See you in Buffalo,

Teri L. Lanza
Editor
[email protected]

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