ViewPoint: What do you believe is the biggest technology concern for the self-storage industry?

Posted by msmessenger on Aug 1, 2016 12:00:00 AM

Question: What do you believe is the biggest technology concern for the self-storage industry?

Korey Hanson – Director of Operations Professional Self Storage Management, LLC

Korey Hanson
Director of Operations
Professional Self Storage Management, LLC

One of the biggest issues I see in today’s self-storage industry with regards to technology is that there is still a large gap between what I call the “have” and the “have nots”. The “haves” are those operators who have embraced technology and have interactive websites that offer reservations and real-time rentals, allow tenants to pay their rent and manage their accounts online, and are using new innovative products such as self-service kiosks and automated locking systems. They utilize sophisticated web-based property management software as well as other automated programs for revenue and task management, collections, and lien processes. The “have nots” are the operators out there who do not have websites at all or have static websites that do nothing more than provide basic information and a few photos of their facilities. They are those who still do not use any type of management software and rely on hand written ledger systems for tracking rentals and deposits. They have chosen to not bring any form of technology into their business. While these operators still have successful, revenue generating businesses, it is surprising to me that more of them haven’t come around given that it is 2016 and there are so many options in technology out there—most being fairly low cost. As our industry continues to see consolidation and more sophisticated operators entering the secondary and tertiary markets, those who are on the “have” side of the line are sure to see greater profits and more success. And those who are not should have some real concerns about staying competitive and relevant in the future.

Lance Watkins – CEO StoreLocal

Lance Watkins

In my opinion, it is the rights to your data.

You need access to your data in order to build a platform of other services and components that all work together; having a management software that gives you open access to their API is great, but that’s not enough. As an owner, you want irrevocable access, and that isn’t usually what you get. You can’t invest a lot of money and time in building a platform when you can have data access rights taken away from you at a moment’s notice.

The problem is with the contract between most property management software companies and their customers, one that gives your provider the right to revoke access to the API (and your data) at any given time.

It’s the same as me giving you piece of property on which to build a storage facility, but I don’t give you the title or the rights to the property. Would you put all your resources into building a first-class facility on property that could be taken away from you at any time, at my sole discretion? Of course not!

The same goes for innovative vendors hoping to sell their technology to self-storage owners. They don’t want to spend a fortune developing technology to work with a company’s property management software only to find out their access might be revoked once they’ve invested a small fortune in developing a product around it. Because of this, owners miss out on a lot of valuable, innovative technology.

Brian Caster – President and CEO Caster Properties

Brian Caster
President and CEO
Caster Properties

Our single greatest technology concern is the lack of a truly scalable, functional property management platform that can seamlessly and reliably meet all our software needs. We need something that can handle everything from property management to call center integration to our data crunching business analysis needs to website functionality and the ever growing list of customer facing applications such as the ability to offer online rentals, online account access for payments or address changes, and even the ability to interface with a kiosk. Currently there is no one player that can solve all our issues. This leaves us trying to mesh together and then manage the three or four or more vendors currently required to meet our needs. The result is that we find ourselves trying to manage our technology rather than having the technology help us manage our business. Today, more than ever, we are faced with rapidly changing consumer behavior and expectations. When consumers adopt a new technology, the expectation is that everyone adopts it immediately. Remember the shift from Yellow Pages to Google search? Those who adapted quickly reaped the rewards, while those who resisted were left behind. We need the ability to adapt quickly and efficiently. We’re already seeing the next leap with social media, aps, and voice search. Without a scalable software platform in place we will never be able to truly meet the expectations of the consumer as their demands change. Our property management technology needs to keep pace with consumer technology, and we are painfully many generations back. Without that platform in place, we won’t be prepared for “life after Google”. As an industry, we need to recognize this need and innovate the next generation of technology.

Noah Springer – Vice President, Asset and Third-Party Management Extra Space Storage

Noah Springer
Vice President, Asset and Third-Party Management
Extra Space Storage

Extra Space’s biggest technology concern for 2016 is also our biggest opportunity. While ensuing security and compliance are always one of the highest priorities, Extra Space’s mobile applications are our biggest focus and largest revenue opportunities.

The smartphone that everyone carries in their pockets is more powerful than the supercomputers that once filled entire rooms a few decades ago. The watch on my wrist can control more functions than James Bond ever had, including unlocking the front door at my house, telling me what restaurants I like nearby, and analyzing how well I slept—not to mention answering my phone and telling time. Our storage customers are using their mobile phones to search for self-storage on their phones more than computers, call centers, tablets, or any other medium.

Currently, Extra Space’s customers are using their smartphones 80 percent of the time to investigate their storage purchasing decision. While many storage owners believe that simply having a mobile friendly website is sufficient, this strategy is not nearly what it needs to be in order to compete with new competition or more sophisticated operators.

Where Extra Space is focused in 2016 is on the mobile customer experience. This will consist of testing multiple views, colors, pictures, fonts, and other aspects to best understand what resonates best with our potential customers. Without testing what best resonates with our customers it is impossible to know what our mobile experience should look like. Even asking our customers what they want isn’t sufficient because many times they don’t know; by testing, making seemingly small changes, and increasing customer engagement it allows us to have higher reservations and rentals.

Dane Elefante – VP of Operations Platinum Storage Group

Dane Elefante
VP of Operations
Platinum Storage Group

Platinum believes that the rising risks and costs associated with Software as a Service (SaaS) have been unquantified and must be watched very carefully as we move into the future. The adoption of cloud-based applications has exploded in the last few years. These web applications have made it so that businesses can pay as they go for access to software and programs that are hosted on servers owned by the provider of these services. This differs sharply from the past when companies owned licenses to their own software and hosted programs on their own computers and servers. Businesses have quickly implemented SaaS as the ultimate solution, praising their low upfront costs, scalability, ease of use, and lack of long-term commitment. However, when looking beyond the savings and convenience afforded by the emergence of SaaS options, there are both long- and short-term consequences—some speculative and others which have been taking shape over the last few years. To start, security is a major concern. Over the last few years, major security breaches at large retailers, government agencies, and health insurance companies resulted in the exposure of their users’ data. To name a few, Target, the U.S Voter Database, and Anthem have all been targets of major breaches, resulting in the release of sensitive customer data to the Internet and raising the question of whether the SaaS providers or the companies that use them are financially responsible for these breaches. Secondly, the core infrastructure of many businesses now rely on SaaS software, meaning their bottom line is subject to year-over-year price increases by SaaS providers. Third, the question of ownership of proprietary business data gets called into question when relying on a third party to host your business operating or client data. In many instances, the company providing these services believes that they control your data and can use it to benefit their own bottom line by selling the data to third parties. Lastly, you cannot completely control who from the SaaS company can access your data or provide access to your employees. Ultimately, the use of SaaS calls into question the necessity of control over expenses, security, and business data for all companies that utilize these services.