Last week I asked the question, “Are you asking the right questions about your self storage business?”
We discussed asking different questions as a method for accessing what is hidden from your view. This is helpful for your personal growth and the growth of your self storage business. (To see ore review click here).
There were some practical suggestions, but it was also very theoretical.
I don’t like theoretical. I like on the court, down from the stands examples.
If you have followed me for any length of time, you know I often say something like, “If you want to change your life, or if you want to change your self storage business, change the questions you are asking yourself.”
I don’t like using this forum, these episodes to talk about myself, or our company a lot, but I thought I may show you how we used new questions last year. We can discuss the impact they had our company, and share where we won and lost in relation to the answer to those questions.
The context of doing this work now. At this time of year, I am usually completing our wins and losses so I can have a clean blank slate to create the next year in our business. If our wins, and more importantly our failures, are not dealt with and complete, what is possible in the future is limited by our past. That is another entire episode or more.
In the first quarter of 2017, I asked three questions that were different than ones I have ever asked. Effective answers to these questions would transform our company. I also limited it to three although I could have created many more.
- How can we improve the customer experience using technology?
- How can we cut payroll 50% and improve the lives of our employees?
- How can we purchase $30 million in 2017?
Based on where we were in January of 2017, if we could find answers to these questions, our company would take a quantum leap.
So as the year comes to an end, and we start preparing for 2018, I am spending time reviewing and completing what we did and didn’t do in 2017. So allow me to share with you the answer to the questions above.
Question One: How can we improve the customer experience using technology?
We implemented kiosks in every facility we own in one of our two brands.
Yes, we have larger facilities, but we are discovering there is a certain percentage of customers that prefer to use automated processes over working with a person. And this percentage is growing each year.
In other words, if there was a person at a counter or a kiosk, a certain percentage would walk to the person and a certain percentage would walk to the kiosk.
In the past, we improved the customer experience through technology with our websites. We allowed customers to pay bills, reserve units, transfer units, even rent units online. Now we also have that capacity at our facilities through the kiosks so a customer can do all of that, even of the facility is closed.
Yes, this was an obvious answer and solution to the questions, but it really took some effort to implement. We had to buy, get set up and integrated into our culture of managers.
There is also a learning curve for all of us and our customers as to the best way to use and implement this technology.
We did, however, get it up and running, and we are experimenting with them to create the best way to improve the customer experience of our brand.
Question Two: How can we cut payroll 50% and improve the lives of our employees?
This is a rather aggressive question, isn’t it?
It seems counterintuitive that if we are reducing payroll, that we could improve the lives of our employees.
Perhaps it is. But, we still needed to ask it. Reducing payroll is critical to our performance. Improving employee lives is critical to our values and culture.
So we began playing with the Kiosks.
We began testing using it exclusively during non-peak times during the week, especially when we were going to utilize a part-time employee.
Now, this is not me, but rather our Operations’ Manager and partner Maria. She and Laura in our organization are doing most of this.
It is still a work in progress and we only have a few months in 2017 of results. It took a while to decide, order, install, and start integrating into our company. Again the process isn’t complete, but here are two very specific results.
A few years ago, prior to Kiosk and when I last measured this stat, we were averaging approximately $250,000 of gross income per full-time employee. A very respectable number and one of the many reasons to consider the self storage business.
As of now, our company is averaging $333,000 of gross income per employee. Much of that increase is a result of the implementation of the kiosk.
Payroll also went down in 2017 without laying anyone off. Yes, we didn’t have to hire as many new part-time people as we anticipated, but here are the results. They varied from facility to facility, but so far through October 2017, here are some results:
- Facility One: Payroll Down 18.15%
- Facility Two: Payroll Down 29.94%
Our other facilities fall in between these two so far.
So we did not hit our 50% reduction, but appear to be well on the way.
Now the second part of the question, improving the lives of the employees is somewhat subjective. And yes, I didn’t spend a lot of time creating an index to use as a measurement other than not letting anyone go.
Perhaps next year we should spend more time focusing on this aspect of the questions somehow.
But the point is, we would not be where we are now, although we fell short, without asking a different question than before.
Question Three: How can we purchase $30 million in 2017?
An easy answer would be to put $30 million under contract, then close on it.
Easier said than done.
Although we actually have so far (remember, the year’s not over), put about $23 million under contract, we were unable to close on that. It looks like we are going to end the year at only about $5 million.
We have a very stringent acquisition requirement. One rather large portfolio we had under contract, ended up not meeting the criteria. The feasibility reports came back with information that concerned us. The physical inspections also came back with more deferred maintenance than we expected.
It takes discipline to walk away, but in the long run, we felt that was the best decision.
So we are still looking for a way to answer that question.
One answer is to look at how we have been funding the equity. Perhaps we need to find a different way with different return requirements.
Or perhaps just be patient. I have a feeling that at the slightest turn in the economy, there are going to be a lot of self storage at lower prices.
We are already seeing Seller exaptation’s beginning to change.
Either way, know this is a question I have not answered and will work on in the upcoming year.
So how did we do?
We feel like, in regards to Question One, we took action and integrated a new technology into our operations. We are going to spend the next year experimenting with it to improve the customer experience. But we answered and fulfilled the possibility that question was for our company.
With Question Two, we only achieved about 50% of our goal. But, that 25% average in payroll reduction has really served us to improve the value of our portfolio. It also made a real difference in a few refinanced projects we did this year.
We utterly failed in coming up with a successful answer to Question Three. I am spending the next few months putting into service a couple of projects. Then, I will devote much of my time, energy and resources in the upcoming year to answering this question, or another like it.
If I am honest with myself, we spent more time, energy and resources on the first two questions. Next year we are only going to have two new questions, and some version of Question Three will be one of them.
Now, the real question for you is what do you need to tell yourself, to acknowledge, to speak the truth about, in relation to your achievements and your failures in the last year around your self storage business?
Just say what’s so.
There is a real power in that. Even where you fall short or utterly failed, just saying what’s so has real power.
It does not have to be disempowering. On the contrary, speaking powerfully what’s so can have real power and freedom.
