One of the big trends in self-storage today is the use of a kiosk.
There are a lot of self-storage companies that just use the kiosk and no onsite managers. In the old days, it was primarily just companies with smaller facilities. Now, there are many companies that have 50,000 plus size facilities and are fully automated.
There is a misconception that all you have to do is put in a kiosk, and that can make a facility fully automated.
The kiosk is just the start.
Our company uses them, but we are not fully automated. Our business strategy and culture requires managers on site.
Yes, we have reduced some payroll cost. But for our position in the market place, our managers play a vital role.
What is critical is for you to decide where your company is going to fit in the self-storage landscape, and what your USP’s are (unique selling proposition).
If you are considering automating, just don’t think you buy a kiosk and everything is handled.
Let’s look at what is really involved.
Marketing
Without onsite salespeople, your online marketing is critical.
You have to spend more money on the basics, like SEO, Google AdWords, and most “automated” self-storage companies make good use of aggregators like Sparefoot.
And a must is a call center. You either have to have one yourself through a central office or vendor it out. But it is critical. At the ISS, one fully automated self-storage company indicated 70% of their new customer leases starts with a call center. Then they go to the website or kiosk to complete the move-in process.
Another “must” is the ability to move in through your web site. This is becoming more common these days, but if your current website doesn’t provide the ability for customers to move in, in other words, sign leases, get codes and access to their unit, you are mostly irrelevant to a large percentage of customers.
The fully automated company I heard speak at the convention indicated only 6% of their customers move in through the kiosk and never talk to a human being.
Operations
One of the main things you would have to think through to be fully automated is how to unlock overclocks and vacant units if locked.
Nowadays there are automated overclocking systems and overlocks with combinations on them. There are also new doors with the ability to read smartphones screens and unlock.
All of these solutions require retrofitting doors, or in the case of the combination over locks, the ability to give customers the combinations automatically through technology (i.e. Website, kiosk, or through text messaging).
This is a must because if there is no one to go unlock a unit after a late payment is made, or unlock a vacant unit at the time of move in, you will lose a large percentage of your business.
This really needs to be thought through and figured out. Don’t experiment after the fact.
Another thing to figure out how to do is merchandise sales. Don’t forget this to be fully automated.
Many use a display in a unit or space next to the kiosk, they have a vending machine, much like another vending machine, that dispenses the retail products.
Think through this.
Auctions are now easy. If you are automated, online auctions are a must. Fortunately, they are very easy these days.
Typically, there are no restrooms or dumpsters in a fully automated facility. And keep in mind, fully automated doesn’t mean no one ever goes there. Two times a week or more someone needs to do lock inspection reports, clean up, reload kiosk and vending machines, etc.
The labor cost is usually between 10 to 20 hours a week. It is just not a facility manager cost.
Conclusion
Going fully automated is a viable option to consider Just make sure you have the total picture of what is involved before you trend that way.
Yes, it can reduce operational cost. But you do have other expenses some operators don’t have we have discussed here.
But most importantly, beyond the cost, is the question “What is your self-storage company going to be?”.
Your business plan and strategy is the determining factor in this opinion. Automation, managers, or a combination should be a function of what you are creating in a company and customer experience. I don’t think just trying to reduce operating cost at a facility should be the reason for taking such a big step.
Have this step be part of a larger strategy of positioning your company for the future in this fantastic business of self-storage.
You do that, you will have many years of success in the best business there is for the small investor.
