Evaluating a Self Storage Management Company
If you are considering engaging a management company to operate your self storage facility for the first time or are comparing management companies, this will be one of the most important decisions relating to the performance of your facility you may ever make. Amazingly, many owners attempt to shortcut this decision by putting together a spreadsheet listing services offered and fees charged. Meeting face to face and asking the following questions will assist you in determining if third party management is right for you and if so, which management company is most likely to be the best fit for you and your property.
Marketing
A. Does the management company’s approach to marketing demonstrate a concern for spending your dollars in the most targeted and efficient way and tracking the return on investment for each marketing dollar spent or do they use the “shotgun” approach and hope for the best.
B. Are you required or expected to participate in shared “institutional” advertising campaigns with dubious direct benefits to your facility?
C. Is their marketing strategy one dimensional or does it combine effective online tactics with an active social media presence and community based onsite activities?
D. Do they have a well-developed quality assurance program for their customers that ties to their reputation monitoring and management efforts.
E. How do they know if the marketing dollars spent are effective at making the phone ring? Do they have accurate, reliable statistics on how often their managers answer the phone? Are their managers shopped regularly on the phone and in person? Do they utilize a call center? If not, why not?
F. Are they relying on expensively outsourcing most tactics or are they orchestrating a cost effective and state of the art approach “in house”? What sort of technology do they bring to bear on the problem of tracking campaign results?
G. If they say they do and track all these things don’t settle for vague answers. Ask for details.
Corporate Staffing and Controls
A. How many facilities does the management company manage and how is the corporate office staffed? Ask the representative to describe the corporate hierarchy that will impact your facility. Who are your points of contact and how accessible and responsive are they likely to be? Is your account likely to get and hold their attention?
B. How many facilities does the management company’s District/Area representative oversee? How often does he/she visit each facility and what does he/she do while on site?
C. Visit the management company’s corporate offices. Are you impressed by the staff, physical plant and technology being brought to bear on your behalf? What activities do they engage in as a team or make available to individuals that build corporate spirit, keep morale high and make it a quality place to work, facilitating high quality hiring and retention?
D. At all companies, the work culture found at the Corporate Office sets the tone for the entire company. Ask the representative to describe the corporate work culture. Now ask to interview a couple of staffers at the corporate office. Do they describe things at corporate similarly?
Hiring/Motivating Employees
A. Does the Company have an actual HR manager who ensures compliance with applicable State and Federal employment laws or does their Controller or another employee do double duty as an HR manager.
B. Is there a written employment agreement in place with each manager to provide a layer of protection for you as well them from employment related legal actions.
C. Does the Management Company measure the performance of the on-site management team separately from the performance of the facility or do they assume that high occupancy means high quality management?
D. Are Store Managers on straight salary or are they on a performance based bonus plan that motivates them to go the extra mile?
E. Ask the representative to describe how they measure property performance and how their managers’ performance is measured and how the bonus plan works in detail.
Training
A. Ask to see the Management Company’s Policy’s & Procedures Manual or similar document. This is at the core of any first rate management firm and should be scrutinized closely.
B. Ask the representative what initial and follow up training the management company provides to the onsite management team.
C. When you distill it all down, the quality of any management company is always reflected in the quality of their onsite staff. Visit several of the management company’s facilities and shop a couple of their Store Managers, at least by phone if you can’t get there in person. How do they compare to their competition? More importantly, how impressed were you with their poise and professionalism? Are they well trained in the art of persuasive selling or just giving out rates and availability?
Revenue Management
A. Implementing a rate management strategy, controlling discounting and collecting your money are the areas with the greatest impact on a facility’s bottom line. What are the management company’s specific tactics to deal with these issues and what technology do they bring to bear to accomplish the mission.
B. What ancillary sources of revenue does the Management Company have direct experience with and recommend for your facility?
Expense Control/Economies of Scale
A. Does the Management Company have a portfolio of properties of sufficient size to obtain substantial discounts on facility insurance, credit card processing fees and other products and services?
B. What expenses does the Management Company work to control via negotiated regional or national accounts?
C. Ask the representative to describe the review and payment process for invoices related to your facility. Is the Accounting department overseen by a staff CPA or is the Dept. Head a glorified bookkeeper?
D. Tour the accounting department. Do the workstations and file areas look like a whirlwind of out of control paper or does it look like a place with tight controls? Ask to see their records room and look for the same things.
Property Sale/ Exit Strategies
A. Does the Management Company have experience in marketing and selling self storage facilities or will you have to hire another company when necessary?
B. Does the Management Company have access to a national sales platform to ensure visibility with the largest pool of potential buyers and to maximize the sale price for your property?
Company Vision
A. Look at the management company’s website and around their offices. Does the company have a Vision or Mission Statement? If so, is their stated primary mission anything other than to protect the interests of their owners?
Sounds like a long day doesn’t it? It is, but next to site selection, correct selection of your management company is arguably the most important decision you will make relative to the performance of your multi million dollar facility. We hope you’ll be willing to invest the time to visit us so we can answer all of the above questions for you.
