Some self-storage renters are simply undesirable. They might be rule-breakers or chronic late-payers. Perhaps they’re always stirring up drama or they’ve had their belongings sold at lien sale. These are the customers you hope never walk through your door again. If they did, you’d decline the rental. But bad apples can be wily! They might try to rent through a friend or family member. What do you do if they turn up on site? 

In a recent thread on Self-Storage Talk, the industry’s largest online community, members are discussing how they keep track of the unwelcome, being proactive in their quest to block troublesome tenants. Read what others are doing and add your own methods.

If you’ve ever stayed at a DoubleTree hotel, the warm, gooey cookie handed out during check-in probably stands out in your mind. At Five Guys eateries, you know to order a small batch of fries because they always overload you with extra. The experience at The Cheesecake Factory is always unique due to the massive menu. All these are examples of business “talk triggers.”

When it comes to digital marketing, many self-storage operations have a social media strategy, a local business strategy and a Google-review strategy. However, when it comes to word-of mouth, they come up short. We tend to trust that if we provide good enough customer service, tenants will surely talk about our facility with others. At least, that’s what we hope.

And there’s a good reason to want this kind of promotion. According to a 2018 study by data and analytics firm Engagement Labs, 19 percent of purchases are caused by word-of-mouth and almost 90 percent are at least influenced by it. Marketing firm Convince & Convert found that recommendations from friends or family members rank third in consumers’ decision-making process, coming in behind only personal experience or familiarity with a brand. The same study found that 83 percent of consumers have given at least one word-of-mouth recommendation at some time.

As self storage operators, we all care about word-of-mouth marketing but don’t seem to know what to do about it. Enter the talk trigger.

How Does It Work?

The phrase “talk trigger” was coined by social media expert Jay Baer as a “strategic operational differentiator that compels word-of-mouth.” A good trigger isn’t based on something any business can do (provide good customer service, give out company keychains, offer discounts, etc.) but on something no one else is doing.

Once you’ve identified the talk trigger for your self-storage operation, the trick is to repeat it with every customer, every time. In his book “Talk Triggers: The Complete Guide to Creating Customers with Word of Mouth,” Baer writes that in addition to being repeatable, a trigger must be relevant to your business and its customers, realistic and remarkable. Customers tend to ignore what is average and “same” but will discuss what is different.

Baer identifies five types of “talkable” triggers: empathy, usefulness, generosity, speed and attitude. The point is to focus on one and not try to promote multiple triggers at once. If a trigger runs its course, a new one can be implemented. Here are some examples from Baer’s book:

• Empathy: You do something more human and empathetic than customers expect, like the Clinton, N.J., oral surgeon who calls each new patient before his appointment to see if the person has any questions or concerns.
• Usefulness: You do something useful for customers that they don’t expect, like the locksmith who oils every lock in every home he visits, not just the ones he fixes.
• Generosity: You give your customer something extra, like Five Guys does with its fries.
• Speed: You respond to customers quickly, like sandwich chain Jimmy John’s, which delivers super-fast.
• Attitude: Your company attitude is unique, in a good way, like conference-call service UberConference, which uses super-funny on-hold music.

Talk Triggers in Storage

“The core element of a talk trigger is the story it creates,” Baer writes. It’s different from a unique selling point (USP). For example, a popular USP in self-storage is the first-month-free discount. While that might stir conversation, it’s temporary and there are typically restrictions on who qualifies. Conversely, a talk trigger is an act or item that’s given to every customer every time.

As self-storage becomes more customer-centric, we need to seriously consider word-of-mouth marketing and talk triggers. Customers are no longer mainly focused on price as a differentiator between one facility and the next. The emphasis is more on the experience they have with a brand. A talk trigger could greatly enhance that experience.

Finding Your Talk Trigger

When implementing any word-of-mouth strategy, it’s wise to listen to your customers. They may have ideas for things you could offer. Also, ask your managers suggestions and others involved in the day-to-day operation of your self-storage facility. Like DoubleTree, your talk trigger might be a free cookie or similar item. It might be that for every rental, you give a percentage of rent to a local nonprofit. You might create a loyalty program that not only comes with discounts every so often but a “loyal tenant breakfast” or other neat perks.

The point of word-of-mouth is to stand out, to be exceptional. No one tells his friends about an average experience, but he’ll go out of his way to talk about the experiences that are remarkable. What kind of story do you want customers telling about your business?

As self-storage continues to grow exponentially, operators must be intentional and strategic in all marketing avenues, including word-of-mouth. It isn’t enough to have the lowest prices, cleanest units and nicest staff. We’ve relied too heavily on our customers to talk to their friends and family based on those ordinary qualities. Developing a talk trigger for your company may be just what’s needed. It’s time to find your own “warm cookie” idea.

Steven Jeffers is a facilities asset manager for Bee Safe Storage and Wine Cellar, which operates 12 self-storage facilities in the Carolinas. His experience and knowledge includes local marketing, management optimization and leadership training. For more information, e-mail [email protected]; visit www.beesafe.com.

The Storage Group (TSG), an Internet-marketing company that serves the self-storage industry, has integrated the 3-D mapping component of its ClickandStor online-rental tool with dynamic-pricing software from Veritec Solutions. The Click 3-D Map provides self-storage customers with a real-time, three-dimensional view of a facility’s layout and unit-pricing options. Prospective tenants can use the map to select a unit that best matches their price and amenity preferences, according to a press release.

The tiered structure of Veritec’s software reflects price changes based on unit desirability. It allows self-storage operators to market units to customers based on value indicators, such as “good,” “better” and “best” profiles. “The most successful revenue-management programs are the programs that best integrate customer-service aspects,” said Warren Lieberman, president of Veritec. “Developing a pricing solution with a tiered program that provides a well-understood, comprehensive user interface is our goal.”

The pricing integration with the map tool is designed to increase customer confidence with online transactions by allowing them to make a more informed purchase decision. “Click 3-D Map improves the experience for the end-user while simultaneously helping facility owners upsell units,” said Steve Lucas, CEO of TSG.

Based in Altamonte Springs, Fla., TSG provides online tools and marketing solutions including local-listing management, mobile websites, online rentals, pay-per-click advertising, search engine optimization, social media marketing, and software and website development.

Veritec offers dynamic-pricing software designed for self-storage operators. Its “Self Storage Revenue Management System” integrates with multiple property-management software systems. It offers guidance for setting starting/website rates for new move-ins, rent increases for tenants, and implementing pricing based on value and convenience. The company also offers price consulting.

OpenTech Alliance Inc., a Phoenix-based provider of self-storage kiosks, call-center services and other technology, is soon launching a wired-alarm multiplexer (mux) for its INSOMNIAC CIA (Centralized Intelligent Access) access-control product that’ll sound an alarm and even send customers e-mail and text alerts if their self-storage unit is opened in their absence. The A96 mux will work in conjunction with magnetic contact sensors mounted on individual roll-up or swing doors, with a capacity to monitor up to 96 hardwired unit sensors, according to a press release.

The A96 circuit board is designed for compatibility with existing door-alarm enclosures, alarm switches/magnets, terminal connectors, power sources and wiring. The mux can be configured in 48- or 96-channel mode, the release stated. It’ll be available only as an add-on product for INSOMNIAC CIA customers.

The new tool is the eighth integration to the company’s platform of smart-connected solutions, OpenTech IoE (Internet of Everything), according to the release. Though the product won’t be officially released until the fourth quarter, it’s available for pre-order this month.

“The A96 allows operators with older, PC-based access-control systems to upgrade to the latest technology and take advantage of the increased control, reliability and operational insights it affords, without the need to overhaul all system components,” said Jon Loftin, vice president and IoE product owner.

OpenTech provides several models of INSOMNIAC self-serve kiosks as well as a range of self-storage rental solutions including the INSOMNIAC Live! Call Center, INSOMNIAC Online Web and mobile applications, LiveAgent! software products, and the INSOMNIAC ILock Security System, all available through the company's self-storage cloud.

Source:
OpenTech, OpenTech Expands INSOMNIAC CIA With Wired Alarm Mux

Update 9/2/19 – Platinum Storage has completed its four-story Storelocal facility in Brentwood, Tenn., with 760 climate-controlled units. It’s the first ground-up self-storage project branded under that name.

Storelocal is a cooperative created by independent facility operators to offer member benefits with economies of scale, according to a press release. The company plans to open four more facilities in the Nashville area, the release stated.

Storelocal leverages the combined strength of its membership for services such as customer acquisition, financing, marketing and technology. The coop also owns online self-storage directories StorageFront.com and SelfStorageHounds.com. Its total membership includes more than 1,200 self-storage facilities through its owner-member companies.

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2/16/18 – Platinum Storage Group, which operates more than 50 self-storage facilities in eight states, has received approvals to develop a Storage Direct location on 2.8 acres in Brentwood, Tenn. The property at the intersection of Cloverdale Drive and Old Hickory Boulevard will comprise 120,000 square feet in 828 units, according to a press release. Construction is expected to begin next month.

The property will feature automatic door locks, climate-controlled units, individual door alarms, electronically secured floor access, video cameras and facility-wide WiFi.

"The Brentwood market boasts ideal self-storage fundamentals and aligns with our strategy of adding properties to our portfolio in areas that we want to be in for the long run," said CEO Daniel “Skip” Elefante. "There has been very little supply added to the area since 2007, so we are poised to make a strong entrance to the market. In addition to the lack of supply, the market has a low vacancy rate and commands strong rents, both factors that align with our strict investment criteria."

Headquartered in Orange County, Calif., Platinum is a privately held commercial real estate company specializing in self-storage. Founded in 1999, it owns or manages a storage portfolio comprising more than 4 million square feet.

Source
PR Newswire, Platinum Storage Group to Develop 828-Unit, 120,000-Square-Foot Self-Storage Facility in Brentwood, Tennessee

Self-storage architectural-design firms Archcon Architecture and Archcon Design Build have merged and rebranded as Dallenbach-Cole Architecture. In addition, senior-project manager Cheryl Cole has been promoted to associate partner.

The company will remain a full-service architecture firm that “prioritizes its clients, continues to offer the highest level of talent and expertise, and promotes technical and artistic excellence,” according to a press release.

“This new partnership and brand will support our continued growth. We are the same team that our clients know and trust, and are pleased to be growing from within,” said Jeffrey S. Dallenbach, founder and managing partner. “Design excellence in the governmental, self-storage and commercial arenas is our primary direction.”

Based in San Antonio, Dallenbach-Cole offers architecture, facility-assessment and project-management services. It provides architectural and engineering documents, permitting and design.

Source:
PR San Antonio's Archcon Architecture and Archcon Design Build Merge to Create Dallenbach-Cole Architecture

So, you’ve decided to build a self-storage facility. Congratulations! Years from now, you and your family are likely to look back on this decision with satisfaction and joy. It’s life-changing—mostly in a good way.

Developing a storage project can also be taxing. Where do you even start? There are many tasks you’ll need to go complete on your journey. Each step is complex, so it’s important you understand them before you jump in and get started.

What Am I Getting Into?

Developing self-storage is a roller-coaster of emotions. There’s a great feeling of satisfaction as you see the facility fill up and create cash flow; but that comes after many sleepless nights and mountains of stress. For example, if you’re a new owner/developer without other large assets, you might need to pledge your home as collateral.

If you haven’t ever developed a commercial property, you might be surprised by how much it costs and how much comes out of your pocket prior to setting up a loan. Unknowns that can run up your budget include wetlands, zoning changes, stormwater planning, architectural boards and fire codes. To gain the approvals you’ll need before financing is available, you’ll likely need to invest $10,000 to $50,000 in civil engineering, permit and review fees. You might also need to hire architects. The more complicated the project, the costlier it’ll be.

Choosing a Location

Deciding where to build is one of your first and most important decisions. You need a market that’s underserved. You’re looking for a well-populated or growing area with a need for more storage. In a nutshell, analyze demand by comparing the population to the number of square feet of existing storage in the area. Also, look for a site that’s properly zoned in a highly visible area, as close as possible to dense residential development.

Consider multiple parcels, and don’t be surprised if your deal falls apart or zoning prevents the project from moving forward. When you find an area where you think there’s unmet need, there’s often a reason. It could be the city won’t allow storage or the rental rates won’t support a new facility. Keep looking until you find the perfect site.

Creating a 'Ballpark’ Projection

You’re doing this to make money, so before you invest in a location, you’ll need to work up a financial forecast. However, you can’t expect your suppliers to give you solid prices without a plan. And working up a plan requires a significant investment in engineering services.

This is where ballpark estimating comes in. Research some typical costs and rental rates to formulate cost and revenue per square foot. A conversation with a local civil engineer might help you understand what your grading and land preparation will entail as well as approximate costs. Your building supplier can give you ballpark numbers on various structure types.

By now you should also be in discussions with the city engineer or zoning officials to ensure the land is correctly zoned and determine whether there are any restrictions or requirements. Some areas will require a conditional-use permit, or there could be architectural standards for new projects.

It’s also time to call a few lenders and determine what interest rate you can expect to pay. You likely won’t get anything in writing since you don’t have a plan, but you should be able to get a range. This initial conversation with your banker is probably best had by phone, not e-mail, as he may be more reluctant to put tentative items in writing. This is also true of your initial contacts with city officials and your civil engineer. You’re going to get a lot more out of an in-person or phone conversation than a documented e-mail.

Armed with all this data, you can begin to determine the maximum you can pay for your land and still make an acceptable return.

Make an Offer

Before investing time and money in design work, get that property under contract! Negotiate the longest possible time to line up permits and financing before you close the deal. Owning the land means you’re paying interest and property taxes, so you may want to offer a higher purchase price or non-refundable deposit to delay closing. The offer should include contingencies that allow you to back out if you can’t get reasonable financing or approvals to build.

Fill in the Details

You can’t get lending based on your rough plan, nor can you get solid quotes. You’ll need a local civil engineer to design a stormwater plan, which usually includes a pond. Your building manufacturer will work with you to design a layout and that best uses the land. You’ll then work up the exact unit mix and design. Once you have site plans in place, you can request detailed quotes from your suppliers and add detail to your revenue projections.

Assuming you’re staying on track for your project to be financially viable, you’re ready to apply for permits. In most cases, the building manufacturer will provide the permit set you’ll need. Complex projects may also include an architect.

Keep detailed records on all the money you spend on permits and engineering. It should count as equity in the project in the eyes of the lender.

Line Up Financing

Lenders will base their decisions on the five Cs: character, cash flow, capital, collateral and conditions. The exact requirements will differ based on lender and programs, but they’ll need to see a detailed construction budget, exact unit mix and a cash-flow projection. If you have a collateral shortfall, a lien may be placed on your home or other property. (They’ll typically discount the assets by 20 percent, which is common on high loan-to-value projects.)

Remember, pricing for your subcontractors can be volatile, especially when steel prices are fluctuating, so make sure your quotes are current when you close the loan. Lenders may also need to see building permits and proof of zoning before closing.

New owners/developers with limited resources might want to take advantage of Small Business Administration programs, which allow up to a 25-year term and finance up to 90 percent of the project value. Typical interest rates are 1 percent to 2 percent above prime and are adjustable. Expect an interest-only period during construction. Lenders may also offer variable rate during construction with three- to five-year fixed rates upon completion.

Purchase the Land

I’ve done projects where I financed the land and others where I owned the land prior to financing. When feasible, buying the land for cash makes the transaction much easier, and the land will count as equity when arranging the loan. The other advantage of buying the land outside of the loan is the interest-only portion won’t start until you pay for expenses from the loan. Typically, this would be a building deposit or site grading.

Build It

With land, financing, permits and approved plans, you’re now ready to build. Anxiety will remain high as you’ll inevitably wish the project is completed faster. After all, your interest-only loan will balloon quickly as you make payments to contractors.

You can’t do much about weather interruptions, but you can do your best to make sure materials show up in a timely fashion. You don’t want them to arrive too late, or there will be delays. You also don’t want them to arrive too early, or they could be damaged or stolen while at the job site. You can also make sure you’re listening to contractor issues and feedback to ensure everyone is working efficiently.

When construction is done and the Certificate of Occupancy has been issued, you’ll switch to rent-up mode. It’ll get better with each week until you break even. Before you know it, you’ll be thinking about your next project or expansion. You’ll likely start right around the time you forgot how much work that first one was. Good luck!

Steve Hajewski is the marketing manager at Trachte Building Systems, which designs, manufactures and erects a full line of pre-engineered and customized steel self-storage systems, including single- and multi-story, portable storage, interior partition and corridor, and canopy boat/RV. He also owns a self-storage facility in Wisconsin and is a frequent contributor on Self-Storage Talk, the industry's largest online community. For more information, call 800.356.5824; visit www.trachte.com.