I was on a forum today and found a discussion regarding storage auctions. My thought is that I don't want to have an auction. I don't want to have a huge list of people in default (ouch! that makes the books look really bad) and I don't want people moving out. I want to work with them. I need to stay consistent with my collection calls. And as a result, we have gone from having 40 people seriously (more than 20 days) late in February to 7 as of right now (none of which are in default). Having auctions, I think, is a poor reflection on the business. It means we are doing something wrong with our customer service and collections efforts.
Now, we have 300 units here and I am the only employee. So I have to balance a lot of hats: marketing, sales, collections, management, etc. I have a priority list that I go by each week and although I understand most companies only do collections once per month, I call the late people weekly. I have a relationship with my customers. I get to know them and who they are. These are real people we are serving, not just another number. They all have a story and whether we think it is valid or not, it is valid to them. Of course there will always be those looking for a "free ride" but that is why you focus on covering the late fees, etc before moving anyone into a unit. If they sign the lease and they have no idea what they are signing and you have made no effort to have them read the lease prior to signing, then you cannot fault those people entirely. Your customer should never be shocked when they have gotten to the point of their unit going to auction because you know you have communicated what you expect from them and have tried to work out a solution to prevent that auction.
This is my step by step procedure for keeping people OUT of default and preventing an auction. I don't want anyone in default. And to wait on purpose so they bring in the late fees and someone can collect a bonus from that is just rewarding bad behavior from someone who should be a specialist in collections and sales. I know what it's like to have tragedy in your family and lose everything and have to start all over, that is where the majority of our late people are in life right now (and if they aren't, you still want to light a fire under them but let it burn a little at a time). Lest I digress, again, this is how I handle it and as I said, we have had no one in default, two months in a row.
Step one: Week One, call everyone on your list, be nice, Hi, this is so and so from so and so and wanted to remind you that your payment is past due on your unit, in two days I'll have to overlock and I don't want to do that, please call me so we can make arrangements.
Week Two: Be a little more stern but still nice, This is so and so from so and so and I need you to call me as soon as possible so we can make arrangements for your past due payment on your unit. This is very important, I don't want to see you lose your things. I want to help.
Week three: Stern, This is so and so from so and so, I'm concerned I haven't heard from you, you are on overlock and in two days we are cutting your lock and you will be considered in default, when this happens we have no choice but to place your unit on the auction list and call it in to the paper. Please call now to avoid this from happening, I do not want to see you lose your things.
This has taken a CONSISTENT effort on my part for 8 months. I have also posted some of our terms and conditions out where people can see them and I ask my new tenants to read these and their lease prior to signing. I answer their questions if they have any at that point. Many are not clear when they move in how strict we are and that we actually will auction their items. I have lost potential customers this way but I see that as weeding out the bad from the good. I WANT good paying customers. I understand bad things happen and I have worked with those customers as well. Many of them have become some of my best paying customers because they are so grateful I worked with them.
Let's learn to reward good behavior more often. If collections are below a certain percentage, give a bonus. Work with customers weekly. Let's operate our storage businesses with ethics and good business practices. I think that makes much more sense than the alternative, don't you?
Michelle Armstrong
Manager
Star Storage
816-765-7300
Now, we have 300 units here and I am the only employee. So I have to balance a lot of hats: marketing, sales, collections, management, etc. I have a priority list that I go by each week and although I understand most companies only do collections once per month, I call the late people weekly. I have a relationship with my customers. I get to know them and who they are. These are real people we are serving, not just another number. They all have a story and whether we think it is valid or not, it is valid to them. Of course there will always be those looking for a "free ride" but that is why you focus on covering the late fees, etc before moving anyone into a unit. If they sign the lease and they have no idea what they are signing and you have made no effort to have them read the lease prior to signing, then you cannot fault those people entirely. Your customer should never be shocked when they have gotten to the point of their unit going to auction because you know you have communicated what you expect from them and have tried to work out a solution to prevent that auction.
This is my step by step procedure for keeping people OUT of default and preventing an auction. I don't want anyone in default. And to wait on purpose so they bring in the late fees and someone can collect a bonus from that is just rewarding bad behavior from someone who should be a specialist in collections and sales. I know what it's like to have tragedy in your family and lose everything and have to start all over, that is where the majority of our late people are in life right now (and if they aren't, you still want to light a fire under them but let it burn a little at a time). Lest I digress, again, this is how I handle it and as I said, we have had no one in default, two months in a row.
Step one: Week One, call everyone on your list, be nice, Hi, this is so and so from so and so and wanted to remind you that your payment is past due on your unit, in two days I'll have to overlock and I don't want to do that, please call me so we can make arrangements.
Week Two: Be a little more stern but still nice, This is so and so from so and so and I need you to call me as soon as possible so we can make arrangements for your past due payment on your unit. This is very important, I don't want to see you lose your things. I want to help.
Week three: Stern, This is so and so from so and so, I'm concerned I haven't heard from you, you are on overlock and in two days we are cutting your lock and you will be considered in default, when this happens we have no choice but to place your unit on the auction list and call it in to the paper. Please call now to avoid this from happening, I do not want to see you lose your things.
This has taken a CONSISTENT effort on my part for 8 months. I have also posted some of our terms and conditions out where people can see them and I ask my new tenants to read these and their lease prior to signing. I answer their questions if they have any at that point. Many are not clear when they move in how strict we are and that we actually will auction their items. I have lost potential customers this way but I see that as weeding out the bad from the good. I WANT good paying customers. I understand bad things happen and I have worked with those customers as well. Many of them have become some of my best paying customers because they are so grateful I worked with them.
Let's learn to reward good behavior more often. If collections are below a certain percentage, give a bonus. Work with customers weekly. Let's operate our storage businesses with ethics and good business practices. I think that makes much more sense than the alternative, don't you?
Michelle Armstrong
Manager
Star Storage
816-765-7300
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