By Ashley Dawn
Earlier this year I purchased health insurance through a local insurance agency. The business required a voided check so my premiums could be automatically deducted from a checking account each month. It was mandatory. I could either sign up for automatic billing or not buy the health insurance. It was that simple.
Automatic billing can also be that simple for self-storage rentals. In the last three years of managing my facility, A+ Storage in Mt. Juliet, Tenn., I’ve lost zero customers by requiring automatic billing. It’s all in the sales approach and confidence you exude when you present your product and site rules.
Here’s another example of the benefits of automatic billing. In my previous life as a Zumba instructor, I had a small fitness business in which I would charge a monthly membership fee. The only way to simplify the process and make sure all memberships were paid on time was to set each member up with automatic billing through their checking account. Imagine if I had to check to see if everyone was paid up before they entered class. How much time would that take?
Ask yourself how much time are you spending making phone calls, sending e-mails or mailing invoices to chase down tenants who are delinquent? Overlocking and unlocking units? What would you do if you had more time? Time is money spent! Are you spending extra money each month using services to send text messages or making phones calls? Requiring automatic billing at your facility encourages efficiency. It also saves time and money. Even when I’m not in the office, the money still rolls in … automatically.
In my experience the majority of customers appreciate the ease of auto payments. In our economy, so many of our expenses are paid automatically, such as the mortgage on a home, life insurance, gym memberships, electricity bills and car insurance. Self-storage customers are accustomed and familiar with automatic payments already. It’s not a shock when they rent a storage unit and it’s billed to their credit card automatically on their due date. Again, it’s in the way you, the self-storage property manager, handles and presents the issue at the time of rental.
A customer shouldn’t be asked if he’d like to sign up for automatic payments. It should be assumed he’ll sign up for auto bill. If you’re unfamiliar with the assumptive sales process do some research and practice the technique. It will serve you well. A question such as, “Would you prefer a checking account or credit card for your monthly auto payment” works for most operators. If you don’t have the capability of processing automatic clearing house payments (ACH), simply ask, “Would you prefer to use a Visa or MasterCard for your monthly payments”?
It’s at that point the customer will either hand you whichever credit card he chooses to use or ask how the auto billing works. Explain the process and answer any questions or concerns he may have. Remember to be sensitive to those who express dislike for auto payments. The majority of people with concerns have either been burned by auto payments in the past or identity theft. If a customer absolutely refuses to sign on, allow him to pay however he’d like. I have 60 percent of tenants on auto payment and the rest pay online or in person.
If you decide to require automatic billing I suggest to start with new tenants first, and then approach your existing customers and let them know automatic billing is available. Also, you should know auto billing isn’t a “set it and forget it” mechanism. You’ll have credit cards that are declined and ACH payments returned. However, it’s so much easier to deal with a handful of expired credit cards than chasing down 70 people to get their monthly storage payment. Know that it will take time to move to an automatic-billing system, and your delinquent list will get smaller in the long run. If you stick to it, you’ll see a big difference in your stress level as well. Plus, you’ll have more free time to brush up on your sales skills!
Ashley Dawn joined A Plus Storage of Tennessee LLC as a site manager in 2013, managing the company’s Mount Juliet facility. Ashley was named the Tennessee Self Storage Association Manager of the Year for 2015. Her accomplishments include winning third place in the Self-Storage Talk 2015 “Loving Las Vegas” Video Challenge and presenting a session at the 2016 Inside Self-Storage World Expo. To reach her, e-mail providence@aplustorage.com.