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Competition ups the ante on new marketing strategies
by Stan Colona

Self-storage owners of today operate in a very competitive marketplace. The late 1990s brought new levels of product saturation to some trade areas, and even entire geographic markets. Oversaturation occurs when there are more self-storage facilities in a trade area than corresponding demand for the product. Evidence of oversaturation consists of higher vacancy rates, increased tenant turnover with shorter rental periods, use of move-in discounts/incentives, stagnant or declining rental rates, and longer fill-up rates for new developments.

Developing and maintaining a competitive edge requires an intensified marketing effort. The conventional marketing vehicles of Yellow Pages advertisements, direct mail, brochures, signage, mass media (radio, newspaper, television, etc.), banners, referrals, promotions, Internet and word-of-mouth are all important and viable tools. However, many operators have begun to use marketing strategies that are outside the norm. These next-level strategies consist of ways to reach the customer earlier in the moving/storage decision process, and ways to convert a higher percentage of inquiries to space rentals. Call centers are one form of new marketing that has generated a lot of attention.

Full-Service vs. Support

In 1996, one of the large REITs established a call center in its home office. That center now handles approximately 200,000 calls per month. In the last few years, other operators have begun to open full-service call centers and variations of these operations. The majority of existing self-storage phone-center operations fall into two categories: full-service, and roll-over or support centers.

How It Works

A full-service phone center receives phone calls placed to storage properties regardless of whether the onsite manager is available to answer them. In this type of operation, phone-center agents replace onsite managers in answering new-tenant telephone inquiries. Most full-service centers answer calls through a basic process: Callers to a facility are greeted by an automated message asking if they are an existing or new tenant. Generally, they will press "1" if they are a new rental customer or "2" if they are an existing tenant. If a caller selects the first option, he is transferred to the call center. If he chooses the second option, the call is transferred to a direct line at the property for the manager to answer.

The remainder of the process is the same for roll-over and full-service centers. The two types only differ in the steps cited above--that is, how the customer calls are received. A roll-over center will only receive calls during property office hours if the manager fails to answer the phone in a specified number of rings. Roll-over centers support property management during office hours and extend the phone coverage of the property during hours it is closed. Roll-over centers do not replace property managers in handling daily inquiries for storage space.

Reservation sales agents answer calls that are transferred to the call center. Agents have computers with information that reflects current availability and rates for the subject property. Most operations keep this information current with a minimum of daily updates. Agents access this information to find the type of storage, availability and rental rate to meet the needs of the customer. Large multisite operators have the ability to provide agents with information regarding several of the operator's properties in the prospect's trade area. Agents use this information to find tenants the optimum location, size and rates.

After the agent has determined the best alternative for a customer, he invites the caller to reserve a space. This is done by inputting caller name, address, telephone numbers, etc., into the database. The computer system is designed to assign a tracking or reservation number to the record. This will allow the reservation to be tracked and verified as a rental.

The reservation is then transmitted to the property, usually via fax or e-mail. Onsite property managers are responsible for converting the customer reservation into a storage rental. The process necessary to convert a reservation is typcially a standardized series of steps a manager follows. Skilled and motivated property managers who follow up effectively will always produce high reservation conversion rates.

The Benefits

Call centers offer many benefits to operators, managers and customers:

More Rentals

• By extending the operating hours of a facility via phone coverage, calls missed during after-business hours are minimized. Calls missed during office hours are eliminated completely.
• Reservation agents are trained and given incentives to produce reservations that result in move-ins. This is their focus. Agents never miss a call because they are showing a storage unit on a property or executing other duties managers are responsible for.
• In operations with multiple sites, the call center can direct customers to sites with availability and maximize an operator's overall occupancy.

More Effective Marketing Feedback

• The call center allows operators to effectively track responses to marketing efforts, such as pricing policies and promotions. Phone volumes can be isolated and analyzed after a specific program has been implemented.
• In a center servicing multiple sites, the phone center allows customers to shop a market for price without having to call the competition. Allowing the customer to make one call and find the most convenient location, best price and right type of storage for his needs increases customer service.
• With a roll-over center, an operator will know the volume of calls being left unanswered at a facility during office hours. This will allow the operator more information to evaluate the property staffing.

Increased Standardized Service

• Most callers do not prefer to leave a message on an answering machine. Phone centers decrease or eliminate the chances a caller will ever be answered by a machine.
• Callers receive a consistent sales presentation when they speak to a professional customer-service agent, as opposed to calling individual facilities, which can result in varying levels of professionalism.

Some Obstacles

Given the heightened competition in the industry and the benefits of a call center, a logical question would be: Why doesn't every operator have a call center? There are some obstacles. First, the payroll costs associated with operating a phone center prohibit all but the largest operators from establishing one. In addition, the training and supervision involved can provide challenges. For a call center to operate effectively, agents need to be highly trained and motivated. In most situations, agents are selling space at a property they have never seen. The execution of this entire process is critical. MIS systems, staffing, agent scripts and atmosphere must all be optimal in a phone center.

Execution at the property level is as important as always. When the onsite manager receives a reservation from the call center, it is a sales lead. Whether the sales lead becomes a rental is highly dependent on the actions of the property manager. Large operators have experienced great success with their phone centers in some geographic areas and have come up short in others. The difference is not the phone center's ability to be effective in different parts of the country, but the execution of the operator's management in these different territories.

Phone centers can be very useful weapons in the competitive arena of the self-storage industry. At least one center is currently being custom-designed to meet the needs and budgets of all operators. However, as with any sales effort, the most important ingredient will always be the staff and its execution of the program.