self storage technology - opentech alliance, …...2501 w. dunlap ave. suite 255 phoenix, az 85021...
TRANSCRIPT
2501 W. Dunlap Ave.Suite 255
Phoenix, AZ 85021602.749.9370
www.opentechalliance.com
SELF STORAGE TECHNOLOGYWHITE PAPER
22
PurposeTo provide the self-storage industry with data and insight on automated self-service transactions that occurred during the 2015 calendar year.
Each year, the publishing is updated with transaction data from an OpenTech folio that currently encompasses over 4,000 self storage facilities. This 8th edition includes information on all payments, rentals and key analytics on storage transactions processed between January 1, 2015 and December 31, 2015.
IntroductionEvery day, OpenTech Alliance connects thousands of tenants with storage companies around the world. With over 4,000 daily transactions, the company’s automated products and services helped store managers move in over 130,000 tenants in 2015.
For the year, the portfolio of OpenTech clients realized over $140 million in new sales revenue, leading many to recognize the INSOMNIAC™ platform as one of most powerful systems in storage today.
2015 at a Glance
DAILY STORAGE TRANSACTIONS IN 2015
NEW STORAGE RENTALS IN 2015
NEW RENTAL REVENUE IN 2015
4,000+
130,000+
$140 MIL+
3
The Evolution of the Internet
Age old storage practices are changing and storage operators are practicing new methods to boost sales, customer satisfaction, and property valuation by adopting automated business processes that are internet driven.
Not too long ago, face-to-face service during normal office hours was the standard business practice in self-storage. Then, the technology trend blossomed during the recent economic downturn as a means for storage owners to: better compete for business, become more efficient, and/or control rising labor costs.
Today, added sales and service channels are viewed by many operators as a necessary business strategy, and self-service technology has become a welcomed addition to the now generation of storage renters.
Key findings in this report will show that self-service is greatly preferred by all ages, and customer facing technology is just as important as the brand’s name when it comes to purchase considerations.
Emphasizing this is the fact that self-service move-ins continued to rise at an aggressive rate over the last year.
4
Self-Service KiosksIn 2015, kiosks continued to play an invaluable role in optimizing storage business operations. These onsite payment and rental stations give customers the freedom to conduct transactions at any time of day—even when the manager is busy, or when the facility is closed.
Case studies will illustrate that support from management and site employees are most critical to the success of the kiosk. Kiosks with higher levels of success were attributed to the implementation of a wide range of best practices that are highlighted in the INSOMNIAC Kiosk Success Guide. In short, the value a business gets from implementing a kiosk is directly related to how the site employees embrace the new technology.
It is also essential to note that sales numbers can be misleading, due to the fact that kiosks continue to excel at smaller sized properties, and/or at facilities with higher occupancy rates. At any rate, every kiosk in service is generating incremental revenue, and when key personnel support new business process, the largest portion of properties find the kiosk as an essential tool to drive significant profit, and customer convenience.
5
With 1,049 kiosks in service, a grand total 49,966 new rentals were converted by OpenTech clients using kiosks in 2015.
When looking at the performance of all kiosks in the INSOMNIAC network, the median number of new self-service move-ins averaged 4.0 units (per facility) monthly
A total of 48 kiosk rentals annuallyper facility.
The average facility earned over $52,000 in sales revenue through new kiosk move-ins in 2015.
When looking at the top 100 performing kiosks, the median number of self-service move-ins rise substantially to 15.5 units (per facility) monthly. The average facility earned over $204,000 in sales revenue through new kiosk move-ins in 2015
At an industry average of $1,100 per rental INSOMNIAC kiosk clients realized over $54 million in new rental revenue over 2015.
It’s useful to evaluate kiosk performance on the basis of the Average Annual Sales Return (AASR). AASR reflects the industry average unit rental of $100 per month, at a typical tenant stay of 11 months (totaling $1,100 per rental).
$1,100+ AVG. INDUSTRY EARNINGS
PER RENTAL
$54 MIL+ KIOSKS REVENUE IN 2015
6
20132012 20152014
YOY GrowthIn 2015, the total number of self-service kiosk rentals grew over 25% when compared to 2014 results. It is also interesting to note the sustained growth of kiosk rentals between 2012 and 2015.
The number of rentals by kiosks jumped dramatically in 2015. This data underscores the growing customer acceptance of self storage kiosks throughout North America. In fact, when comparing 2012 peak hours to those for 2015, the number of kiosk-based rentals have more than doubled.
In terms of payment choice, the majority of self-storage customers utilizing a kiosk to complete their move-into chose to pay with a credit card. As seen in the Chart to the right, 76 percent of new tenants used a credit card at move-in during 2015. Cash was the second most popular currency utilized at kiosks by 22 percent of customers who were moving into a self-storage unit. At the lower end of the scale, only 2 percent of tenants chose to pay by check at a kiosk.
Payment Choices
CREDIT CARDCASH CHECK
00500
1000150020002500
Dec
30003500400045005000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov
7
Kiosks give owners and operators the ability to conduct business both during and outside of normal office hours–thereby helping to maximize income for self-storage facilities. While office hours tend to vary between individual self-storage stores, see chart to the right for the purpose of analysis.
Monitoring move-ins and transactions that occur outside of office hours provides an interesting look at new tenants–and added revenue that may have been lost without the convenience offered by an INSOMNIAC kiosk (see Chart below).
In 2015, 47 percent of kiosk customers chose to rent their unit outside of normal office hours–thereby taking advantage of the expanded business hours that the technology offers. And during normal office hours, kiosks are constantly assisting store managers with new tenant rentals in a tireless and reliable manner.
Timing of Transactions
Expanded Business Hours
Kiosk Move-In Summary 2015
Kiosk Move-Ins During Office Hours
Kiosk Move-Ins Outside Office Hours
Monday to Friday – 9 a.m. to 5 p.m.
Saturday – 10 a.m. to 3 p.m.
Sunday – Closed
Office Hours+ Outside of Office Hours
100% of total hours (24 hours)
“DURING OFFICE HOURS” IS DEFINED AS: ** for the purpose of analysis**
in the subsequent analysis; “outside of office hours” includes all times not listed above.
8
JFK Mini Storage, in Macon Georgia, saw an average increase in net operating revenue of over $3,500 monthly since the kiosk made its debut. The kiosk was originally installed to reduce labor and to allow the owners to spend more time away from the business.
Access Self Storage in Oakland, New Jersey, installed the kiosk in January of 2014 to help managers with payments and to add a layer of customer convenience that was missing. After averaging approximately eight new rentals monthly, the property completed 14 rentals through the kiosk alone in February of 2014.
Red Dot Storage, with facilities in Illinois and Wisconsin, continued to add kiosks to every new property (20 in total) based on a management philosophy of leveraging technology that delivers the highest level of customer service and convenience while controlling costs and increasing profits. Their portfolio of properties consequently reported an increase in occupancy between five percent and 25 percent at every location, even as operating expenses decreased by as much as 20 percent after installing the kiosks.
Kiosk Case Studies
Kiosks can also provide self-storage businesses with an additional layer of operational efficiencies during normal business hours. In 2015, more kiosk users (53%) chose to make their monthly rent payment outside of normal office hours–again taking advantage of the expanded business hours that the technology offers. (As seen below)
In total, over 279,000 rental payments were made exclusively thru the INSOMNIAC kiosk network (an average of 267 self-service payments annually per facility).
Kiosk Payment Summary 2015
Kiosk Payments During Office Hours
Kiosk Payments Outside Office Hours
Kiosks offer the ability to cover extensive rental processes like unit selection, tenant insurance, paperless lease completion, I.D. checks, and payment transactions if/when the manager is occupied. They can also enable the manager to handle two customers simultaneously when only one staff member is on duty.
As the use of technology becomes more widespread, owners are becoming increasingly comfortable with using kiosks. In fact, many tenants say they prefer the experience and convenience of utilizing a self-service option rather than dealing directly with a facility staff member. For this type of consumer, a kiosk can improve the customer experience and will likely be the method of choice (even during normal self-storage business operating hours) for conducting ongoing self-storage business.
9
“The Self-Storage Call Center” Self-Storage call centers are an essential component to providing client satisfaction, helping to drive rental revenue, support, and building consumer trust.
10
In addition to its kiosk operations, OpenTech operates the industry’s leading call center, INSOMNIAC Live! Remote call centers are designed to maximize profits for self-storage owners by ensuring that every phone call coming into the facility is answered quickly, productively, and professionally.
Call centers are also essential when a potential customer calls for information about renting a storage unit and no one is available to take the call at the facility.
Understanding the Value of Call Centers
Call centers can handle every single incoming phone call that is placed to a facility. This practice reflects the strategy of many public owned storage companies, and encourages the site manager to focus on operational duties, marketing, and face-to-face customer service.
Alternatively, call centers can be used to only accept phone calls that would otherwise be missed by managers and rolled over to voicemail. Specialized routing ensures that every phone call is answered, whether it arrives when the manager is engaged with another customer, away from the office, or if the call comes in after hours when the office is closed.
(See Chart to the left) In 2015 1,328,873 calls were answered by the INSOMNIAC Live Call Center. 57% were classified as services calls, and 27% were payment transaction calls. Notably, only 16% of all calls were classified as a sales inquiry.
Self-Storage Call Centers
357,727 Payment Calls
759,138 Services Calls
212,008 Sales Calls
1,328,873 Total Calls
Call Center Sales & Service Summary
11
54,398 33,439
98,318212,008
In detail, we can see that the call center completed 54,398 reservations for store managers in their portfolio. In addition, the call center agents also scheduled 33,439 appointments for store managers in 2015. Finally, the call center also provided 98,318 qualified leads to their store managers for the year.
This ultimately led storage managers in the call center portfolio to convert a grand total of 76,832 unit rentals in 2015. At an industry average of $1,100 per rental OpenTech call center clients realized over 84 million in new rental revenue for the year.
Missed Calls = Missed SalesAnother interesting consideration is the day and time when reservations are booked through the call center. As seen in the Chart below, comparing reservations made during standard office hours versus those made
outside business hours provides an interesting metric. It is possible the facility would have lost these reservations had storage counselors not been unavailable to answer after-hour calls?
This data shows that additional customers—and added profits—would have been forgone without the availability of the call center to handle these customer inquiries.
Call Center Sales Performance Summary
0
200
400
600
800
1000
MondaySunday Tuesday Wednesday Thursday Friday Saturday
11
Out of 212,008 sales inquiries received by the INSOMNIAC Live! call center in 2015, 36 percent were successfully converted into completed rentals.
12
Call Center Reservations
As seen in Chart to the right, while the
majority of the reservations were taken
by the call center during normal business
hours, a substantial number of reservations
were made during non-office hours. A
total of 15,301 reservations (28%) were
completed when the office was closed.
Of particular note is the 7 a.m. to 9 a.m.
hour prior to the office opening and the
afterhours between 5 p.m. and 7 p.m.
Again, it is important to note that without
the use of the call center, those calls would
have most likely resulted in lost reservations
and lost revenue.
Improved Cash Flow = Reduced Collections
Significant growth was also seen in the number of
customers who utilized the INSOMNIAC Live! call
center to make rental payments.
The overall trend is revealing. While more and more
tenants continue to take advantage of the call center
at times when the office would otherwise be closed,
storage owners are seeing improved cash flow and
reduced collections due to the customer conveniences
the call center provides.
Call Center Sales & Service Summary
00
5000
10000
15000
20000
25000
30000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Call Center Payments by Month
In Office Out Office
MondaySunday Tuesday Wednesday Thursday Friday Saturday
20152014
As seen in Chart above, whereas 240,509 payments were taken by the call center in 2014, the number jumped by 48% to 357,727 payments in 2015.
13
Leading Callers to the Facility
Industry statistics report that prospective customers often shop 3-4 storage facility’s prior to renting a storage unit. While the goal
of the call center is to always make a reservation, many customers are initially non-committal. In this case, the focus of the call
center shifts from making a reservation to setting an on-site appointment with a store manager.
There are many times when the call center will persuade a potential customer to visit and tour the property with the manager before
making a decision. As seen in chart below , the call center converted many sales inquiries in 2015 which resulted in an appointment
being set to visit the facility.
00
500
1000
1500
2000
2500
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Appointments by Month
20152014
What is clearly evident is the fact that the total number of appointments set by the call center have more than doubled YOY from 2014 to 2015.
14
A comparison of sales leads that roll into the call center
during office hours versus those that arrive outside office
hours is highlighted in yellow in the chart to the right.
The call center also tracks this data as it helps illustrate
the potential added profit that call centers can offer
self-storage facilities.
Call Center Leads
The call center must have an integral
working relationship with the facility
managers they represent. For this reason,
when a customer calls the facility and
reaches the call center, the site manager is
given details about the call in real time. This
way, even if a reservation or an appointment
isn’t made by the call center, the manager
has complete information on the caller. A
qualified lead includes the customer’s name,
phone number, email, and a recording of the
call to enable immediate follow-up.
Year-over-year, the total number of qualified leads grew from 56,663 in 2013 to 65,137 in 2014 to 98,318 in 2015 — an increase of 73%
Leads by Month
A Comparison of Sales Leads
14
00
1000
2000
3000
4000
5000
6000
7000
8000
9000
10000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
201520142013
ThursdaySunday Monday Tuesday Wednesday Friday SaturdayThursday
15
Monitoring phone reservations that occur outside
of office hours provides an interesting look at new
tenant trends–and added revenue that may have
been lost without the convenience offered by a call
center (see Call Center Reservation Summary).
In 2015, 28% of callers chose to reserve their unit outside of normal office hours –thereby taking advantage of the expanded business hours that the call center technology offers.During normal office hours, the call center is
constantly assisting store managers with new
tenant reservations.
The call center technology offers the capacity to
cover the rental process from beginning-to-end
including assistance with unit selection, tenant
insurance, paperless lease completion, payment
transactions, and move-in policies and procedures.
As seen in the Call Center Payment Summary, the call center
also provides self-storage businesses with an added layer
of operational proficiencies during normal business hours.
In 2015, 43% of callers chose to make their monthly rent
payment outside of normal office hours–again taking
advantage of the expanded business hours that the technology
offers.
In total, over 350,000 rental payments were collected thru the
INSOMNIAC Live! call center for the year.
Call Center Reservation Summary 2015
Total Rentals
Total Payments
15,301
Call Center Reservations Outside Office Hours
151,833
Call Center Payments Outside Office Hours
39,097
Call Center Reservations During Office Hours
205,894
Call Center PaymentsDuring Office Hours
Call Center Payment Summary 2015
15
16
When analyzing call center data,
support calls are categorized as
any type of call or inquiry that
falls outside the realm of sales or
payments. Often, these phone calls
include questions about vacating
a unit, balance inquiries, truck
rental assistance, or a broad range
of messages left for the facility
manager.
00
10000
20000
30000
40000
50000
60000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
70000
80000
Call Center Support Calls by Month
16
Customer Service Calls
Chart 23 indicates that the number of support calls received by the INSOMNIAC Live! call center continued to grow in 2015.
Spike in Afterhours Usage
20152014
For calls arriving outside of office hours when the office is traditionally closed, we saw an increase in the total number of payments and reservations in 2015—up from approximately 107,000 in 2014 to over 166,000 in 2015. This 55% increase shows that consumers are exhibiting a strong preference for the after-hour service that the call center offers.
The key point here is the fact that, without the services of the call center, these calls would have gone unanswered.
As the use of call centers becomes more widespread, storage customers are acclimating to 3rd party specialists in lieu of talking to the site manager. In the end, results show time and again, that using a call center service always outshines the no service option.
55%INCREASE IN 2015
17
According to The Self Storage REIT Playbook: Winning the Storage Wars, the REITs have a huge advantage over independent owners due to their call centers. This is because REITs have a formal training program to ensure a consistent call quality, which leads to over 98 percent of calls being answered and 45 percent of sales calls being closed.
Property Valuation Case Study The Self Storage Management Group of California reported the success of their kiosk and call center technology implemented at South Congress Storage in Austin, Texas. Ongoing statistics demonstrated how automation is instrumental to increased property value and bottom-line cash flow.
Call Center Case Study
Pay-by-Phone / XpressPayOther phone based self-service channels employ automation to complete simpler and recurring tasks that would otherwise end up with the manager at the counter. XpressPay, OpenTech’s pay-by-phone solution, routes select callers through a custom designed call flow.
The automated channel reduces collections by offering tenants a 24-7 option to pay every time they phone the facility. At the same time a pay-by-phone channel will help relieve workload and or control staffing expenses.
For example, instead of first connecting with the facility manager, callers can make a payment or balance inquiry through interactive prompts using the touch-tone keypad on the telephone, tablet or mobile device.
In 2015, the OpenTech portfolio of clients using the pay-by-phone service found that over 60% of tenants that called to make their payment elected to use the automated service instead of connecting with a storage employee.
This trend is a huge call to action for storage owners. By integrating this inexpensive transaction tool, over 60% of the time spent processing payments by phone can be reduced by offering tenants an automated solution.
17
18
Self-Storage Websites Self-Storage websites have seen major growth and have been a significant avenue for driving new income to self-storage facilities
19
Online Rentals YOY Comparison
5,682Total INSOMNIAC Online Rentals
2015
2,876Total INSOMNIAC Online Rentals
2014
1,927Total INSOMNIAC Online Rentals
2013
Rentals from Storage Facility Websites Grow 97%
SELECT UNIT SIZE01
CHOOSE A MOVE-IN SPECIAL
02SIGN UP FOR
TENANT INSURANCE03
PURCHASE A LOCK04
SIGN THE TERMS OF THE LEASE AGREEMENT
05
OPTIONALLY GET A GATE CODE06 PAY FOR
A UNIT ONLINE07
Using computers, tablets, or mobile devices, new renters can:
Website rental technology represents an increasingly significant avenue for driving new income to self-storage facilities. Meeting this need, INSOMNIAC Online is a website platform that gives owners the ability to offer their prospective customers a self-service rental process to complete move-ins from the facility website.
As seen in the graphic below, there was a steady pattern of year-over-year growth in online rentals from 2013 to 2015.
Growth in online rentals increased 97% last year alone (See below). This trend is expected to see a steady increase, as tech savvy customers—many of them using Smartphones—cross paths with more facilities that implement online rental technology.
The important trend to note is that all of these rentals took place away from the office, and without the assistance of a manager.
Without the capability of having an online rental system in place, these customers would have most likely rented from a competitor with this functionality.
20
Online Statistics
MORE BIDDERS = MORE BIDS = MORE DOLLARS
Online Auctions Case Study
20
Move It Self Storage, began using Storage Treasures last year. They started with a facility in Austin that was drawing very few live bidders, and only collected about 10% of the amount owed when live auctions were held onsite. When hosting a live auction two people would show up, and units would sell for only $10.
Today, Move It Self Storage collects about 60 to 70 percent of the amount due by using StorageTreasures.com. Store records indicate that collections have improved significantly and that they don’t have the delinquencies that they had in the past.
a
Online Storage Auctions The Evolution of the InternetThe first online storage auction platform was launched more than five years ago when StorageTreasures.com made its debut in 2011. Since then, StorageTreasures has become the industry leader in providing online auction services to self storage sites throughout North America.
The site proudly services over 7,400 self-storage facilities, and supports over 900,000 registered bidders. To date, over 300,000 online auctions have been conducted proficiently, securely, and expeditiously.
Proof of Concept
Today, the nation’s largest public storage operators have embraced the online auction concept, which lends additional legitimacy to the business. Both CubeSmart and Extra Space moved to online auctions within the past year. This trend gives everyone in the industry a sense of security that their legal departments (worldwide) have scrutinized both the legalities and effectiveness of the online process.
With an average of 14 unique bidders per
online auction, facilities posting their auctions
online have seen up to a 52% increase in average
revenue gains with online auctions vs. traditional on-site
auctions. Additionally, facilities posting their auctions
online save an average of 33% in auction fees
compared to those using an auctioneer.
The average sale price per
online storage auction is $351.00
According to the SSA, there are
over 2 million live storage auctions per
year in the US, and 63.1% recover 50% or
less of monies owed.
6 out of 6 REIT’s
post their auctions online.
In January of 2015, OpenTech acquired a majority stake in Storage Treasures with plans to expand the brand into new markets.
21
a
ConclusionThere is no denying the fact that technology and customer preference is changing the way people do storage business. Utilizing kiosks, call centers, and online rental services to help consumers reserve, rent, or pay for their units will give facility owners and operators the edge over their competition.
New technology provides the backup necessary to capture every incoming call, and the means to sign new customers via their preferred method of interaction. Allowing customers the conveniences they want, as well as the support managers and staff members need, underscores the important role new technologies and innovations play in self-storage.
Going forward, those self-storage facilities left to rely solely on their on-site managers to handle telephone calls, reservations, and new rentals during regular office hours will likely see a reduction in their business—especially in terms of income.
Clearly, there has never been a better time for self storage to begin leveraging technology and realize the significant potential for new sales, cost savings and increased customer satisfaction.
Every transaction completed at an INSOMNIAC kiosk is reported to the
OpenTech central database server, which is hosted in a secure environment.
The four transaction types include:
Celebrating more than a decade of service to self-storage, OpenTech provides solutions that connect storage owners with tenants. Through the development of a complete line of automated kiosks, call
center services, and SaaS products, the INSOMNIAC brand has become synonymous with self-storage.
If you have more questions about the information presented in this White Paper, or want to discuss how one or all of our solutions could improve your bottom line please contact us at (602) 749-9370. You’ll be happy you did.
White Paper Data Source
1. MOVE-INS2. PAYMENTS
3. RESERVATION COMPLETIONS AND ONLINE RENTALS OR COMPLETIONS
4. MERCHANDISE PURCHASES
21
All transaction data collected contains to the following information:
1. DATE AND TIME STAMP
2. KIOSK ID (which is relative to the specific facility for which the kiosk is in operation)3. TRANSACTION TYPE 4. PAYMENT METHOD (CHECK, CASH, OR CREDIT CARD) 5. AMOUNT OF THE TRANSACTION
22