To compete in today’s economic environment, many self-storage operators are turning to technology to lure customers to their facilities and provide superior service once they sign on the dotted line. Industry studies show the increasing usage of technology in facilities of all ages. Self-storage operators are employing the Internet for marketing, rental payments and online reservations. Facilities are benefiting from computer-management software, surveillance cameras accessible over the Internet, and digital video recorders.
One emerging item in the technical arsenal is the self-serve kiosk. When looking for ways to increase profitability and enhance customer service, more storage owners are turning to kiosks, including many of the largest names in the industry such as U-Stor-It, Simply Self Storage and Extra Space Storage.
Self-storage kiosks enable prospects to rent storage units 24 hours a day even if the manager is not available. A potential customer can take a virtual tour of the facility, select a unit, purchase a lock, pay for the unit, print out a rental agreement, and even sign up for tenant insurance. Existing tenants can use the kiosk--which interacts in real-time with a facility’s management software--to make payments and update their accounts.
Lease Up Faster
Some operators are discovering that kiosks can unlock new revenue streams and even free financing funds. I currently use kiosks at 4 of my locations in Indiana, and they have helped me accelerate the lease up after we add more units. I also attribute the kiosk I installed last year with the rental of over 100 units out of over 2,000 at my facilities. As a result, one of my facilities achieved more than 92 percent occupancy after only one year of operation.
This rental activity has allowed for a more favorable financing package which paves the way to start the development of the next phase of the construction at our facilities. In addition, the faster the lease-up, the better the term of the loan I can get for the next phase.
The additional rentals taken in by the kiosk allowed occupancy to exceed our 85 percent stabilization occupancy level faster, thus accelerating the timetable for expansion. In most of our communities, we have a lot of people working until 5 p.m. or 5:30 in the evening, and they’ve been coming in after hours and renting a unit at 7 p.m. or 8 p.m. We’ve had some customers come in at midnight to rent units while I’m drooling on my pillow. We have found that these self serve kiosks have added great value to our operation.
Kiosks Collect Late Fees
I also discovered another added bonus of the kiosk: the ability to always collect late-fee payments. When I reviewed our balance sheet, I made a startling discovery. We’re actually collecting more late fees than ever through the kiosk. It’s generating additional income and it allows customers to come in and pay their late fee without having to face my managers, and they have immediate access to the facility. If someone wants to get into their unit after hours, they’re going to have to pay the late fees to get in. They don’t have to contact the manager or the owner asking to get a break. The first time a customer is late we normally waive the late fee. When they come in after hours, there’s no one here to waive that, so the kiosk automatically charges the late fees.
One of our facilities collected more than $700.00 in late fees during the first two months of the year, which was more than the amount collected all of last year. The trend duplicates a similar experience at our other locations as well. "The ability of owners to gain favorable financing terms faster as a result of using a kiosk during lease-up is an added value we seldom talk about," says Robert Chiti, CEO of OpenTech Alliance Inc., manufacturers of self-storage kiosks. "On top of that, to witness how late-fee collections can ramp up an income stream for a self-storage operator is stunning", said Chiti.
Better Customer Service
While managers remain available to greet customers, answer questions and take payments, the kiosk frees up my staff to pursue revenue-generating activities. We have a lot of people come in and pay at the kiosk, wave “hi” to the manager and leave. That allows our manager to make marketing calls without being interrupted to collect a payment. In the age of ATMs and self-service checkout at home improvement centers, some customers prefer the speed of using a kiosk to striking up a conversation with a living, breathing manager. Others take longer to warm up to a self-service machine.
The kiosks also tie with another modern piece of equipment: the cell phone. Our managers take cell phones with them and a lot of times someone will call and they can direct them to the kiosk after hours. Should a customer need assistance with the kiosk, there is a lifeline to immediate help. There is a call button on the kiosk that goes directly to the manager or to our call center to assist them.
Kiosks don’t take holidays!
For myself and many other self-storage operators, technology has allowed us to become more efficient and profitable in an increasingly competitive environment. While the high cost of having staff on duty forces most self-storage facilities to be closed on holidays and Sundays, owners with a kiosk are finding renting units on off-days is an easy way to attract customers when their competators are closed. I have witnessed the real financial impact of installing kiosks at our facilities. Using the kiosk keeps our managers happy by giving them Sundays off, but still allows us to be open 24/7. We rented two units on Thanksgiving and one on Christmas. I was happy we could help these customers find storage when they needed it.
Improve your Bottom Line
Like myself, many owners and managers say the convenience factor their customers experience is truly significant since many need to take time off from work to stop by a facility and make their unit payments each month. However by adding a kiosk that takes payments, this enables them to stop by after hours, on weekends and holidays when the facility office is closed. As many in the self-storage industry have already discovered, kiosks reduce staffing costs while providing customers with increased confidence. Without paying costly overtime, kiosks enable facilities to keep their open sign lit permanantly, even during holidays.
Of course, increased occupancy rates and reduced staffing costs translate into an increase of the bottom line and facility valuation. As more industries move toward self-service, it’s worth considering the role of kiosk’s in self-storage. There is a good chance you might find they help lease-up your facility faster, increase profits and differentiate you facility from your competition.
Scott Meyers, CSSM, is the nation’s leading self storage educator. He travels the country revealing why self storage has become the hottest sector in commercial real estate over the past 30 years that virtually nobody has heard about. Practically every real estate investor and entrepreneur has uttered the words “I’ve always wondered about self storage, I’ve heard those things were cash cows”. It was only after becoming a penniless millionaire in the single family and apartment business, and a near bankruptcy experience managing several hundred tenants and toilets that Scott asked himself that very same question.
Scott is the owner and President of Alcatraz Storage® which operates several self storage facilities in the Midwest. Scott is a Certified Self Storage Manager (CSSM) through the National Self Storage Association and is a Certified Apartment Manager (CAM) through The National Apartment Association. He has been a real estate investor since 1993, and was an instructor of the Landlord 101 course through the University of Indianapolis. Scott Meyers speaks to investor groups nationwide but mostly enjoys spending time at home with his wife and 3 young children in Indianapolis, Indiana.
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