Staff Incentives: Fueling Growth in Your Self Storage Business
Michael Hagbeck
CEO and Founder of Forge Self Storage Solutions
If you’re on a hot streak and growing your business, your old ways of rewarding staff may not be fit for purpose. When you grow to around 50 people on your team, it may be time to build a fresh incentive program. You need to reward those who can turn enquiries into signed contracts with new customers. A good plan keeps everyone motivated and helps your business thrive. A bad plan could mean apathy or worse - defections of your best people to competitors or other industries
You need to look at key metrics and bonuses for different roles and consider different plans that fit properties at different stages, from properties filling up or those that are stable. You have to think deeply about the distinct roles of middle managers, call centre staff, and asset managers. Adjust these to your needs, but start simple to keep things fair and clear.
Front Line Staff: The Crucial First Point of Contact
Frontline staff handle enquiries and close deals. Their bonuses should focus on what they control. You also need to keep in mind that metrics change based on your property's stage of development.
Gotta Catch ‘Em All!: New Properties
The name of the game is to ramp up revenue growth by boosting occupancy. The main metric is occupancy growth, which should make up 70% of the bonus. Focus on steady monthly gains, not just a yearly budget. This keeps staff motivated even after a slow month. Take your yearly target and divide it by 12. Each month, the staff have to hit that goal to earn the bonus. If they beat the target, they can carry the extra sales forward to count towards next month’s goal. If they miss, they can reset at zero and try again next month. Strong conversion rates help here, but don't use conversion as a direct metric. That could lead to staff hiding enquiries to fake better numbers.
The rental rate is the next most important factor and should be 15% of the bonus. Management should set a base price floor and then staff earn extra for selling at higher rates.
Regarding debtors, this factor should be 10% of the bonus evaluation. Reward staff for keeping overdue payments low - under 4% of customers more than 30 days late. If most pay by credit card, aim for under 1% and drop this weight to 5%.
Quality rounds out the weightings at 5%. Use a simple audit checklist for all staff. The operations manager should complete this checklist monthly. Scores over 90% earn the full points for this category.
For Stable Properties
You can use the above guide with some slight modifications. Combine the occupancy and rental rate into one revenue growth metric, which totals 85% of the bonus. This pushes for rate hikes while keeping units full. Keep debtors at 10% and quality at 5%.
Bonus Details
The bonus is one month's base pay, paid quarterly (i.e. up to four months' bonus a year). The metrics should be tied to each staff member’s own property, so they are only evaluated on what they can control.
You can create different tiers for fairness so staff stay engaged even in tough months. Top marks and full achievement at 100% can earn the full bonus. At 85% achievement, they get 85% of the bonus. At 70% achievement, it's 70% of the bonus. Test these tiers to find what works best for your company.
Middle Management: Operations
The head of operations gets the same bonus setup as front-line staff—one month's pay, paid quarterly, and tiered the same way. But their metrics roll up results from all properties they oversee.
If they handle expenses, you could choose to add a cost-control KPI. This keeps things balanced between revenue and spending.
Middle Management: Marketing
Marketing staff focus on bringing in enquiries that match revenue goals. Ideally, you should tie bonuses to budgets, not just raw numbers.
For example, if your budget dictates 100 sq m of new occupancy and average units are 10 sqm, aim for 10 new customers. At a 20% conversion rate, you need 50 enquiries.
It’s best not to use conversion rates for their KPIs— once the enquiry is received by the front-line staff, it’s out of their hands. Unfortunately, there doesn’t seem to be a universally reliable metric for tracking the quality of leads as they come in and if those leads result in higher-paying customers.
The bonus is one month's base pay, paid quarterly, and tiered as above.
Call Centre: Handling Leads Smoothly
Call centre teams may support sales from afar but are crucial to your success. Their metrics focus on speed and quality.
Start with availability, which should have a heavy weighting in your scheme. “Availability” is the time operators spend on calls, not admin. Good procedures help to minimise the amount of time your staff spend on paperwork. Keep this in mind and protect your call centre staff from over-zealous bureaucrats!
The next metric to track is the average pick-up time, which should also receive a heavy weighting. A quick pick-up and an ability to quickly answer questions builds trust with prospective clients.
If call centre staff handle email or text, add response time for those, with a medium weight.
Conversion to bookings or appointments should also receive a high rating. Track what they own (i.e. their own calls and time) versus property-level wins.
Finally, general support (i.e. supporting the team) should have a low weight. It can be a simple ‘1 to 10’ ranking based on the operations manager's feedback about how well they help sites.
Again, you can follow the model of a bonus of one month's base pay, paid quarterly.
Asset Management: Keeping Things Running
Asset managers ensure facilities stay reliable. Their work prevents lost income.
The top metric is unit downtime. “Downtime” refers to when any critical feature is unavailable. This could be security or access control systems not working, elevators unavailable, malfunctioning air conditioning units or other factors; essentially, any time storage units are unavailable for rent. Weight it heavily for your asset managers. If they minimise empty time on storage units, then they earn money.
Service and visual elements get a medium weight. This covers payment systems in the office not working, dented or discoloured partitioning, badly scratched elevator walls, broken windows or broken dock levellers. If you don’t deliver on these elements, clients who notice will be unhappy, thinking that whilst they are paying rent, the operator is not holding up their end of the bargain by properly maintaining the property. It’s a truism that unhappy customers talk about your business 10 times more than happy ones. You could lose the business and your good reputation, costing you customers!
It may not seem urgent from day to day, but planned maintenance is crucial and linking it to your bonus structure can ensure it isn’t neglected. Ensure that your asset managers do scheduled maintenance on time and on budget to avoid trouble down the road.
Sometimes, the unexpected does happen and managers have to show their worth by leaping into action to manage a crisis. For unplanned recovery, aim for quick fixes with a medium weight.
If your asset managers are responsible for handling fit-out projects for new units, you can add on-time and on-budget performance with a medium weight.
So, to reiterate: Prioritise unit downtime first, then on-time performance.
The time frame on the bonus here is a little different, given the nature of the work.The bonus should be two to three months' base pay (but do check local norms) and paid annually.
Final Tips for Success
Start with these basics and tweak as you go. Track results monthly to stay on course. Clear rules and fair tiers keep everyone engaged. A strong incentive program turns growth challenges into wins for your team and your self storage business.
For more resources, visit the Self Storage Association Asia at www.selfstorageasia.org. Share your stories—we'd love to hear how these ideas work for you!
Michael Hagbeck is the CEO and Founder of Forge Self Storage Solutions. He is one of the most experienced operators in the Asia-Pacific self storage industry, with 20+ years of experience and an extensive network of relationships. Since 2007, he has founded and served as CEO at four successful self storage companies across multiple markets, including Singapore, Malaysia, Korea, Hong Kong, Mainland China, Japan, Australia and Thailand and is now exploring Indonesia. He is a founding Director of the Self Storage Association of Asia, the region’s largest self storage industry body with 75+ member companies.