Case Study: Boosting Revenues With Software Subscriptions
- This Banyan Hills Technologies customer started in the access control business more than four decades ago. In the years since then, it has grown into the world-wide leader in access control and security solutions for the self-storage industry. The company’s products are used in more than 36,000 locations spread across 30 countries.
The company’s success had always been derived from delivering high levels of customer satisfaction. The company knows the self-storage industry better than anyone and has been able to anticipate the needs of its customers when it brings new innovations to market. With its deep understanding of the challenges its customers faced, the company and its private equity owners recognized the need to move to cloud-based software solutions to help its self-storage customers remain profitable and grow.
For the private equity firm, the business objective was to increase this portfolio company’s EBITDA and its value through the subscription fees that would be paid by the company’s customers for use of the software. The endeavor eventually led to a successful exit.
Here are some of the items that spurred the company to bring a cloud-based solution to its customers:
- Owners of self-storage facilities were handcuffed to software that resided on a local, on-premise computer.
- Managing and controlling devices at the storage facilities was limited to when an operator was physically on-site to access the system.
- On-site tenants needing help could only be assisted when the facility manager was on property and had access to the system.
- Remote management was limited to when the managers were at the facility, which was typically during standard operating hours
- Operators needed data to drive systems outside of the property management system. Call centers, kiosks and websites are all dependent on data.
- Data integrity and real-time access were growing concerns. Incongruent systems that were not built in such a way that the exchanged data was foolproof and timely tended to complicate everything within the system.
Compounding these challenges was the fact that many of the customers operated multiple self-storage properties. Medium-sized operations comprised anywhere from three and 10 properties. A few owners operated as many as 100 properties. This added up to a lot of extra travel time running from one property to another to do things like software updates and dealing with alarms and digital notifications triggered by actions that needed immediate attention.
The Solution: Expand, Automate and Grow through Unattended Self-Storage
Self-storage owners needed a way to move operations to the cloud, giving them remote management capabilities and the ability to support multiple properties. The private equity firm brought in Banyan Hills Technologies to partner with the portfolio company and create a cloud-based software solution that would deliver centralized access control and management across all properties and systems.
The software now provides those facility owners with the ability to bring all of their operations and monitoring of software, devices and local network systems into a single cloud-based application. On one screen, owners can view all of their vital business information not just for a single property but for their entire portfolio of operations.
The cloud-based software solution provided several benefits for the facility owners:
Generates revenue – Using the software solution means generating more revenue by leveraging Internet of Things functionality to kick off marketing campaigns for potential customers.
Reduces costs – Self-storage facility owners can reduce labor costs by using the software solution. The software can perform many of the tasks the previously required the help of a manager or other staff member.
Enables automation – The software solution can automate a whole host of tasks that normally would require manual input. For example, if a door is left open for more than 30 seconds, the software system can kick off a series of notifications to managers prodding them to go check the door and close it so that the facility does not waste money on energy costs.
Enhances security – Using the software solution can help enhance security by keeping track of people entering and exiting the facility.
Leverages data – This is where the software solution shines. Facility owners can use all types of data to analyze their business and find ways to cut costs and improve revenues. To help with the analysis, the software solution comes with customizable dashboards, configurable key performance metrics and role-base permissions for different users.
In addition to the above benefits, IoT-connected devices are able to communicate with other devices setting off a campaign that can have a tremendous impact on operations. The use cases are truly unlimited and these ‘Internet of Things automations’ will certainly help facility owners reach new levels of productivity and customer satisfaction.
Moreover, facility owners can optionally receive even more value through the software solution’s marketplace module. This functionality allows users to enable integration with other property systems such as Ecobee, Nest and Wizer.
The introduction of the cloud-based software has been a boon to self-storage facility operators. It has allowed them to scale their businesses more quickly, to improve operational efficiency and to introduce more automation. Furthermore, multi-site facilities can move forward with more aggressive growth strategies through the implementation of unattended technology models. Having a strong technology ecosystem and a centralized view make autonomous business models closer than ever before.
The ROI for the new technology is being measured through cost savings and through revenue increases. The cost savings take the form of lowered energy expenses (many owners have already expressed a desire to monitor their HVAC systems and receive alerts if outside doors are left ajar). In addition, the cloud software could reduce the need for human employees to do things like walk the property several times a day. Instead, those same employees will be available to help tenants who want to rent a property or who may simply have a question about how to do something. In all likelihood, the improved customer experience will lead to improved revenues.
Now that the cloud-based software has been introduced, the ground has been prepped for even more innovation coming to the self-storage industry. Enabling multi-site facilities to fully realize an unattended business model with seamless integration of disparate systems represents the next wave of customer empowerment for this Banyan customer.
And, even though the private equity firm has since sold the portfolio company, the partnership with Banyan continues even with the new owners. As a valued solution provider, the new owners have requested Banyan to help drive innovation in other projects.