By Kevin Kerr

While some people may tell you there’s no right or wrong way to do things in self-storage, I’m here to say there’s most definitely a wrong way. The good news is most mistakes are completely avoidable. By planning an effective operation strategy that involves technology, you’ll begin to see streamlined workflow, higher tenant satisfaction and increased profit. Here are five areas where technology can make or break your business.

Tenant Engagement

Tenants are the life force of any self-storage business. It’s the facility operator’s responsibility to know the difference between keeping them informed and being an intrusion.

The wrong way. While it’s important to stay connected with prospects and existing customers via social media, texts and e-mail, don’t overload them. This is especially important if you combine your personal and business social media accounts, which can result in a landslide of posts.

Deluging tenants with messages is a type of “brute force” marketing. While your intentions may be good, continuing down this path could lead to a long-standing smudge on your company’s reputation as well as quickly being dropped into the spam filter of every possible tenant in your area.

The right way. Don’t be afraid to use these basic tools, but don’t overdo it. Most important, offer value to your message recipients. Build engagement by offering special promotions, referral programs or contests in which they can participate. Then broadcast these opportunities through every medium you have available including:

• E-mails: Offer value in your subject line, such as “Want 50% Off Next Month’s Rent?”
• Text messages: If a tenant has opted to receive text messages, take advantage of the incredible open rate (average 98 percent) and see how well tenants respond.
• Kiosks: Promoting specials directly from your onsite kiosk is easy and requires zero interaction from staff.
• Display terminals: This is a hybrid solution between a kiosk and tablet. It features a customer-facing screen that allows for promotional slideshows while not in use.

Overall, it’s better to have a wide range of deployment options than to continuously hammer recipients from limited sources. By diversifying your delivery, you should see a direct improvement in the results.

Marketing Tracking

There’s a natural cost to running a self-storage business. While it’s unavoidable, it’s crucial to identify and shift expenditures to increase your return on investment (ROI). Let’s look at your marketing.

The wrong way. If hiring someone to assist with corporate marketing isn’t an option, you’re probably handling some of these responsibilities yourself. When attempting to track the effectiveness of these efforts, it’s important to gather as much data as possible. Without properly tracking the source of each new tenant, you’re unable to determine the ROI for your efforts, which could lead to false assumptions and bad spending.

For example, imagine putting an advertisement in the local newspaper and seeing a 10 percent increase in new rentals the following month. Without tracking the source, you might assume the ad was directly responsible for the increase in rental activity when, in fact, it was due to a ferocious squirrel infestation at a competitor’s site. Without accurate information, you would believe your ad had a high ROI, which would lead to poor investment choices in the future.

The right way. There’s nothing wrong with handling your facility marketing on your own, but it’s critical to follow through and gather information properly. Here are some tech-based methods that have proved effective:

• Create your own online surveys. This is an easy, low-cost solution on websites such as SurveyMonkey.com.
• Purchase pre-made surveys. Surveys established by self-storage professionals are readily available from several resources.
• Enter and track the results using your management software. Most software will allow you to create and track lead sources so you can view results on easy-to-read marketing reports.

Site Maintenance

Now, let’s look at mistakes operators often make in regard to tracking their facility-maintenance tasks.

The wrong way. With site upkeep, there’s often more to manage than you might think. This includes warranties, suppliers, maintenance staff, etc. It may seem easier to shoot from the hip when things need to get done. But not only does this leave you unorganized and unprepared, it can become a severe drain on staff resources and lead to longer completion times.

The right way: Stay organized and integrate your work orders and warranties with your management software. By using your program to track these issues, you not only have your information consolidated, you can better assign charges and manage the budget.

Online Service

Your company website will be the first impression you’ll make on many customers. Before a potential tenant has seen a single unit or spoken with a manager, he’ll most likely have scoured the depths of your website for discounts, location and features. He may even decide whether to contact your facility or a competitor based solely on what he finds online.

The wrong way. After the initial contact, your website’s value should continue to increase for the tenant. If all you’re using your website for is face-value aesthetics and information, you’re severely hindering your potential. If you’re not offering some form of industry-standard integration on your website, I can guarantee you’re either losing business or, at the very least, irritating some tenants.

The right way. Most software providers now offer Web-based programs that work directly with your website. Offering online customer service will not only keep your facility managers free to perform other tasks, it will lead to higher tenant satisfaction and a competitive edge within your market. Here’s what you should offer:

• Online rentals: This is a proven solution that allows tenants to complete the full rental process online.
• Online reservations: If you’re hesitant to forego meeting prospects face-to-face before renting, reservations give you the opportunity to gather information in advance and streamline the process without losing the opportunity to meet with new customers.
• Online payments: This is an important tool. Allowing customers to pay online maximizes their convenience while keeping site managers free for more pressing matters.

Revenue Management

Raising rental rates is a touchy subject for some self-storage operators. However, if you’re regularly sitting between 90 and 100 percent occupancy, you may be limiting potential profit if you aren’t using some revenue-management tools.

The wrong way. Not doing rate changes at all. Of course, tenants aren’t going to bake you brownies because they’re so happy about an impending rate increase; but depending on the increase, the amount of pushback will be surprisingly small.

The right way. For the best results, use dynamic and automated methods for adjusting rents instead of facility-wide rate changes. Here are some options:

• Rate changes by occupancy (push rates): Using a tiered system, you can set your street rates to automatically drop or increase based on current occupancy. This is a good way to drive sales with a low occupancy and increase revenue with a high occupancy.
• Rate changes by day: Have you been tracking rental sources like I suggested? Good, then you can easily determine if certain days of the week are better than others for new rentals and adjust move-in rates for those day accordingly.
• Automatic annual changes: This is a very low-risk, high-reward method to revenue management. Instead of applying rate increases to existing customers facility-wide, use your software to automatically apply a rate change to every new tenant at separate, pre-determined times. This method lies dormant until you’ve set it to take effect. For example, it might notify a tenant of an intended 5 percent rate increase after 10 months, and then apply the rate increase in the 11 month.

Knowing your facility’s trends and using a combination of these automated rate methods has the potential to yield amazing results. If you’re above 90 percent occupancy, you may want to try a rate change based on occupancy (5 percent) for new tenants to reflect supply and demand while an automatic, time-based rate change (5 percent) lies dormant for 10 months. Assuming the tenant stays two years and the unit’s base rate is $100, you’d generate an additional $193.50 in pure profit without any aggressive changes or ever having to press a button—and that’s just from a single tenant.

Maybe you’ve been working in the self-storage industry for decades or you’re fresh on the block. Either way, unless you’re certain your facility is running to its highest potential, it’s important to acknowledge mistakes and adjust accordingly. I suggest starting with one small change. If you’re happy with the results, consider trying another, and then another. Before you know it, you may have just made a noticeably positive impact on your operation.

Kevin Kerr is the marketing and sales coordinator for Storage Commander, a Murrieta, Calif.-based supplier of Web-based and onsite facility-management software. To reach him, e-mail kevin@storagecommander.com; visit www.storagecommander.com.

Blue Crates LLC, a startup business specializing in valet self-storage, has launched service in Chicago. The company uses an online platform that allows customers to schedule item pickup, maintain a visual catalog of stored belongings, and schedule delivery of items to their home.

Similar to other valet-style storage operators, Blue Crates offers by-the-bin storage targeted at residents who don’t have adequate home storage. Items are stored in a secure warehouse in Chicago, according to the company website. Monthly pricing is $7.50 per company bin and $15.50 per wardrobe. Blue Crates will also store oversized items, such a bikes or golf clubs, for $10 per item per month. It doesn’t accept furniture or large appliances.

Customers can use the company’s platform to manage their belongings. The fee structure includes one free pickup and one home delivery each month, no matter how many crates are requested, the source reported. Additional deliveries are $25 each. Item returns are fulfilled within 24 hours. Customer aren’t allowed to visit the storage warehouse.

"This is really about closet extension for urbanites," co-founder Michael Walker told the source. "You basically have an infinite closet that you can expand and contract as you see fit."

Walker founded the company in 2015 with his brother Matthew by building out the technical infrastructure of the company’s website. Blue Crates began accepting customers last year, storing bins in a 500-square-foot downtown facility. It needed to lease a larger warehouse within nine months, according to the source.

Though the Chicago market already has established valet-storage operators, including Los Angeles-based Clutter and New York-based MakeSpace, the Walker brothers believe there is room for competitors. "Within the self-storage space itself, there are several different players in the traditional … market," Michael Walker said. "And there's some differentiation between all three [valet-storage] companies."

The Walkers launched Blue Crates with about $250,000 of their own money and have grown the business to include seven employees. The company has received funds from Elmspring Accelerator, a Chicago-based organization that invests in technology startups. Logistics company Best Dedicated Solutions recently accepted Blue Crates equity in exchange for helping to pay for the startup’s development and operating expenses, the source reported.

In addition to valet-storage services, Blue Crates also rents bins and wardrobes to customers who may be moving residences but don’t plan to store with the company. The Walkers are looking to expand moving-rental and storage services by partnering with apartment operators willing to offer their services as an amenity for tenants. Kass Management Services, which oversees 9,000 Chicago apartment units, is among those testing the platform, according to the source.

“Our goal is to expand throughout the Midwest. Some of our building partners have expressed interest in having the service in some of their buildings in LA, Atlanta and San Francisco,” Michael Walker told a source. “So there’s real potential for us to start expanding into other markets, likely to our building partners first and then the general public soon after.”

Investment-management firm Harrison Street Real Estate Capital LLC (HSRE), which has extensive interests in “needs-based” real estate, including self-storage, has closed its latest fund, Harrison Street Real Estate Partners VI LP (Fund VI), after raising $950 million. The company beat its goal of $850 million and also raised $205 million through co-investment vehicles for a total of nearly $1.16 billion in purchasing power, according to a source.

Launched in the third quarter of 2016, Fund VI will invest in education, healthcare and self-storage. It has already committed $310 million across 34 properties in 17 states. HSRE is targeting a 15 percent net internal rate of return for the fund, a source reported.

In April, the company acquired 15 Trojan Storage properties in Arizona, California, Colorado and Minnesota for $116.8 million. The assets comprise 1.4 million square feet in 10,900 units. The transaction was the first major self-storage acquisition announced by HSRE since it raised $850 million in 2015 for its Harrison Street Real Estate Partners V LP fund.

Approximately 70 percent of Fund VI backing came from existing HSRE investors. In all, it received commitments from 65 institutional investors, according to a source.

HSRE is a real estate private-equity firm with more than $12.2 billion in assets under management through commingled funds and public securities products. The commingled funds focus exclusively on the education, healthcare and self-storage segments of the real estate market. Affiliate Harrison Street Securities LLC manages publicly traded real estate securities on behalf of institutional clients and high-net-worth individuals.

World Class Capital Group LLC (WCCG), which operates the Great Value Storage brand, has acquired a pair of self-storage facilities in the Denver metropolitan market for a combined $9.9 million from Business Property Trust LLC. The Best Bargain Storage properties together comprise 102,790 square feet in 724 units. Nate Paul, president and CEO of WCCG, purchased the assets through affiliate company GVS Colorado Holdings I LLC, according to the source.

The facility at 443 Laredo St. in Aurora, Colo., comprises 42,650 square feet in 323 units. Constructed in 1984, it sold for $4.9 million. The facility at 7273 Kearney St. in Commerce City, Colo., comprises 60,140 square feet in 401 units and was acquired for $5 million. The combined land size of both properties is 7.15 acres.

The buyer secured $8.18 million in financing from Irving, Texas-based C-III Commercial Mortgage LLC.

WCCG is a national real estate investment firm focused on acquiring, developing and managing real estate. Its portfolio includes investments in industrial, land, multi-family, office, retail and self-storage properties. The company is headquartered in Austin, Texas, with a significant presence in New York City.

Great Value Storage, a privately owned self-storage company, operates 65 self-storage facilities in Colorado, Illinois, Indiana, Mississippi, Missouri, Nevada, New York, Ohio, Tennessee and Texas.

Real estate developer Schroeder-Manatee Ranch Inc. (SMR) intends to build a 185,000-square-foot self-storage facility in Lakewood Ranch, Fla. The four-phase project would eventually comprise seven storage buildings, including a pair of three-story structures. If approved, Big Jim Self Storage would be built on about 6.7 acres at 15107 Garnet Trail, in an area with no residential development, according to the source.

Phase one of the project would include a three-story building comprising 81,624 square feet and two single-story structures. Phase two would include a second three-story building comprising 50,859 square feet.

Though the project’s plat and site plans are finalized, Manatee County, Fla., officials are waiting for staff recommendations before proceeding, principal planner Margaret Tusing told the source. SMR has also been involved in the development of Lakewood Ranch, a 31,000-acre master-planned community that includes corporate business parks, medical facilities, recreation areas, residences, retail and schools, according to the company website.

SMR will sell the Big Jim project to another developer once it receives county approval, according to Kirk Boylston, president of Lakewood Ranch Commercial Realty. “We have a real lack of self-storage,” Boylston told the source.

In addition to commercial and residential development, SMR is a land manager and agri-business, with interests in aggregate mining, cattle, citrus, turf and other activities. It’s developing another 80,000 square feet of self-storage in Lakewood Ranch Business Park, near 44th Avenue E.

Big Jim operates eight self-storage facilities in Florida.

StorHub, which operates 11 self-storage facilities in Singapore, has hired Ameko Zhang as assistant marketing manager. She’ll be based in Shanghai.

Zhang was previously the marketing manager for AusPacific Property Investment Group, a developer of commercial, residential and retail projects. She also spent 10 months as the marketing and communications manager for World Citizen Consulting Group, and four years serving on the marketing team for real estate firm Knight Frank in Shanghai.

Launched in 2003, StorHub has facilities across Singapore in Bukit Batok, Changi, Hougang, Kallang, Tampines, Toa Payoh and Woodlands. Its portfolio contains more than 10,000 storage units. The company is a wholly owned subsidiary of CapitaLand Group, a Singapore-based real estate company founded in 2000.

Mark Reynolds, owner of Berkley Hall Construction LLC, is seeking zoning approval to build a three-story self-storage facility on a 1.8-acre vacant lot in High Point, N.C. The parcel at Samet and Admiral Drives is in the Wendover Crossing commercial complex, which includes a Walmart Neighborhood Market.

If approved, the facility will comprise 72,000 square feet of storage space. All units will be accessed from inside the building, which will feature brick and glass, according to the source.

Reynolds, a resident of Greensboro, N.C., said the area is experiencing an increase in storage demand due to multi-family developments. “It is proven through our market studies that it will be a good location for what we want to do,” he said.

Berkley Hall Construction is a real estate operating company that acts as developer, principal and construction manager in North and South Carolina. It also operates Berkley Hall Management LLC.

There are many risks and exposures involved in owning a self-storage facility, and most operators—even those that are proactive—will face the need to file an insurance claim from time to time. Knowing the steps involved can make the process smoother and help turn a negative incident into a more positive experience.

Your Role

In the perfect scenario, you have the proper self-storage insurance coverages in place and are proactive in limiting risk at your facility. So, what do you do when a dreaded incident occurs? For those of you who have experienced the need to file a claim, you know it typically isn’t a pleasant situation. Emotions can be heightened, and people can be frantic. Depending on the type of incident, it can even be scary. Take a few breaths and try to remain calm.

First, collect all documentation relevant to the situation. Take notes on the date and time as well as full names and contact information of everyone involved. Incident reports are very handy, especially in injury-related claims. Pictures can be helpful if there are damages to a building, vehicle or other property. In these scenarios, more information is better.

Keep all these items together and organized so they’re easily accessible when you report your insurance claim or provide information to the claims adjuster. Your agent is there to help and will guide you through the reporting process.

In cases where 911 is called, ensure everyone on the scene is safe. Once the situation is under control, call your insurance agent to discuss the incident. He’ll assist you in completing a loss notice to submit to your carrier. It will require a short description of what happened along with the date of loss and the details of everyone involved.

Many agents will submit the loss notice to the carrier for you directly. Most are like an intake center—they won’t be able to determine if coverage will be afforded, but they’ll submit everything to the insurance company and get the right people involved on your behalf.

Depending on the agent or carrier, you may need to send additional documentation such as incident reports, pictures, police reports, etc. These items may be specifically requested once an adjuster has been assigned to your claim.

The Claims Adjustor

After the claim has been submitted to the insurance carrier, it’ll be assigned a number and adjuster. While you can normally expect a call from the adjuster within a few days, it may take longer if there’s been a natural disaster. It’s important to ask your agent for a realistic timeline so you don’t set unreasonable expectations.

The adjuster will be your best point of contact in working to settle the claim. He’ll gather information from you and may even conduct a physical inspection at your facility. This is why it’s critical to give him your best contact information. This simple step can be missed and cause delays.

If you performed any repairs or incurred other expenses as a result of the incident, document everything and inform your adjuster. Providing copies of bills, receipts and invoices will allow him to factor this into the claim analysis. It’s important to communicate with your adjuster and cooperate with him on all requests. This will help settle the claim as quickly as possible, resulting in a faster payment.

Up-to-Date Policy

Self-storage is a unique business. There are specialized providers that can insure your facility with the coverages that best fit your needs. Talk to your agent to understand your limits and advise him of any facility changes to keep your policy up-to-date and your coverages adequate. Keep the agent’s information and a copy of your policy readily available. It’ll come in handy in the event of an incident, as your agent will be your first point of contact.

If you do face a claim event, use it as a learning experience to help prevent future issues. The more proactive you are, the better off you’ll be. An unexpected occurrence is always possible, but by being prepared and knowing how to handle it, you’ll expedite your claim process and make it as painless as possible.

Melanie Wichelman is an account executive with Universal Insurance Programs, which has created and provided specialized insurance coverages to the self-storage industry for more than 20 years. For more information, call 800.844.2101; visit www.universalinsuranceltd.com.