The self storage industry has changed a lot since its original inception over 45 years ago. We’ve moved from paper accounting and swing doors, to sophisticated management software and roll-up doors accessed by your Bluetooth cell phone. From dusty, drive-up, single-story facilities of the seventies to multi-story, air conditioned, architectural works of art of today, our industry continues to transform.
In addition to operational and architectural advancements, customer expectations of what self storage means to them has changed, as well as the attention that our industry has received from Wall Street and beyond. As a small to mid-sized operator, we face a unique landscape. We are always considering what these changes in customer expectations mean to our business and the impact that outside forces could have on the returns we've become accustomed to.
Here are the top five things that you need to consider in your self storage business.
1. Customers want to do business on their phone.
The modern customer experience has changed a lot, especially in the last five years. More and more, we rely on smart phones to interact with businesses we use everyday. According to Statista, smartphone retail sales are expected to grow 37% from 2018 to 2019, an increase of over $55 billion dollars. As self storage operators, we need to be taking steps to meet our customers where they are.
2. Having technology is the new normal.
For 10 years, panel after panel, presentation after presentation at industry events, presenters have encouraged operators to use and embrace technology to run their facilities. That time has passed. Customers now expect some level of technology present in all transactions they enter into. Having a simple website is not technology anymore. Customers expect to pay their bills online. They expect to find pricing when looking for units. They truly expect to be able to rent their unit from you online without stepping foot into your office. If you are not offering these base level services, you are now lagging behind.
3. It’s getting harder and harder to go at it alone.
As a small to mid-sized operator, the costs of implementing or building systems on your own are monumental and likely unattainable for individual businesses. We rely on vendors to create the products and services that we need to run our businesses efficiently. Unfortunately, this can lead to its own troubles as your business becomes dependent on these products at whatever the vendor is able to charge you. Many smaller operators have joined together to pool their resources to create these products and services for themselves to attempt to better control costs that we all must incur in our day-to-day operations. If you plan on being in self storage for many years, this model has proven successful in other industries over many, many years and is worth exploring for your business.
4. Your NOI is up for grabs.
As mentioned before, our once small little industry is no longer under the radar when it comes to Wall Street and private equity. They have seen the dependence that we all have on our vendors and various firms have entered our industry with billions of acquisition dollars to buy up and consolidate our choices in vendors. As our dependence grows and our choices shrink, prices will rise and innovation will decrease. What is your business doing to attempt to control costs in the future and retain your freedom to choose who you do business with?
5. Don’t forget the fundamentals.
There is a lot to consider as a modern self storage operator when dealing with a modern self storage customer. Do not forget however, that we are still a location based business of 3-mile circles. Curb appeal, cleanliness, and professionalism is what will keep the customer at your facility once you’ve gotten them through the door. Pick up those wrappers, paint those curbs and bollards, stand up and greet your customers. The modern customer experience extends beyond the internet and their cell phone, and the experience doesn’t end until they move out.