The Revenue Boosting Power of Automating Self-Storage Collections
The self-storage industry has long been a reliably lucrative venture, known for thriving during good times and bad. While that remains true, operators are finding themselves navigating a challenging operating environment for the first time in a long while.
Rates and occupancy growth remained muted during what is traditionally the busy season. The usual summer spike in demand did not materialize, and online search volume for self-storage related terms shows a noticeable decline compared to the previous year. The reduction in demand is largely connected to the slow down in home sales and migration within the United States.
It’s a harsh reality, but operators that adapt to the changing market dynamics can ensure their continued growth. With demand on the wane and street rates declining, operators must be more creative when it comes to generating revenue growth.
This leads to two main ways that operators can boost revenue during lean times: increasing efficiency and maximizing revenue per tenant. In this blog post we will discuss one strategy that accomplishes both of these: automating the collection process.
The Dilemma of Late Payments: A Common Hurdle for Operators
One of the most pressing challenges operators face is the increasing amount of time spent chasing down late payments. This task, often laden with inefficiencies and expenses, diverts precious resources away from revenue growth opportunities.
By implementing an automated approach to collections, operators can centralize the process and eliminate tedious workflows. Automation has shown to reduce delinquency. At the same time, employees and managers can spend time on more productive work.
Let’s take a closer look at how Storable helps operators achieve success through automating collections.
1. Reduce Delinquency Rate
One of the primary concerns for operators is the delinquency rate, which can significantly impact revenue. In the case of Storable, our solution simplifies the process of collecting payments with a two-tap payment system. This streamlined approach has proven to collect up to four times more delinquent revenue and decrease the number of units going to auction by up to 63%.
2. Automate Time-Consuming Workflows
Operators often find themselves bogged down by manual communications and the time-consuming process of collecting payments. Storable offers a lifeline in this regard, saving operators an average of four to seven hours a week. With automated communications and easy enrollment in auto-pay, operators get paid a remarkable 35% faster. This means more time can be allocated to growth strategies, rather than chasing late payments by implementing automated collections.
3. Utilize Multiple Channels
Tenants may fall behind on payments for various reasons. Some forget, while others might struggle financially. Oftentimes all they need is a persistent reminder. A multi-channel approach consisting of phone, text, email, and mail is the best way to keep your business top of mind. This consistent communication ensures that your facilities are at the forefront when tenants acquire the funds necessary to make a payment. By making it easier for tenants to pay, they are less likely to fall behind.
4. Drive Auto-Pay Enrollment
When making a delinquent payment, customers are encouraged to enroll in auto-pay to avoid future issues. The auto-pay prompts provided by Storable lead to an average of 10 new auto-pay enrollments per month per location. This not only helps in securing regular payments but also leads to increased tenant retention. Customers with auto-pay tend to stay, on average, four to six months longer than those without, and they are less sensitive to price increases.
Conclusion: Overcoming Challenges and Seizing Opportunities
In an ever-changing self-storage market, operators must adapt to new realities. Average rental rates, occupancy rates, and online search volume may be declining, but operators have the power to mitigate these challenges by maximizing efficiency and revenue per tenant. Storable offers a comprehensive solution, reducing delinquency rates, automating time-consuming workflows, and increasing tenant retention.
To learn more about automating and streamlining your collection process with Collections Manager Pro, please click here.