Getting machines out of your yard as much as possible is the name of the game in equipment rental, but hoping and wishing for higher utilization isn’t enough, it requires specific actions. Here are five tips to get your machines rented and your balance sheet in the black.
1. Get the word out!
You can’t rent equipment if no one knows you have it. Let existing and potential customers know what you have to offer through an effective promotional campaign. Traditional advertising methods, such as billboards, radio spots and print ads remain valuable, but to reach your target market today, it’s crucial to optimize your Google presence.
To do so, a Google My Business account can help your company show up in search results when customers look for you online. It’s free, which makes it an affordable marketing tool for small and big businesses alike. Keep in mind that even though you run a brick-and-mortar business, your customers and prospects are online, and that’s where they’ll start their search for your company and the equipment you carry.
Likewise, don’t discount the importance of social media. An informative and frequently updated Facebook page, for example, is an excellent tool to not only inform customers of your offerings, but also to create a cohesive community of supporters that will spread the message about your business through “word of mouth,” which these days translates to commenting on and sharing your news and content. To learn more about digital marketing, please check out our recent webinar with equipment rental digital marketing expert, David McBee.
2. Right-size it.
If your utilization rate is lower than you’d like – and experts say it should hover around the sweet spot of 65% – consider adjusting the size of your fleet. It’s good practice to consider each machine its own business. Start with its initial acquisition cost, then factor in the fuel and maintenance it requires to run, fixed costs such as insurance and storage, as well as depreciation and disposal. Crunch the numbers and compare your result to the income the unit generates. If the numbers are in the red, it might be necessary to offload that machine to get back to a profitable position.
Fortunately, today’s telematics systems can provide all the information you need to make the right decision. And don’t let the fear of a data deluge intimidate you. The reward for rolling up your sleeves and digging into the figures can be significant, and help is often available from your suppliers.
3. Reconsider your rates.
Sometimes it’s necessary to adjust what you’re charging customers for the use of your equipment. If utilization is low, the natural inclination might be to lower your rates to attract more business. It’s the law of supply and demand.
But guard against making a knee-jerk decision when it comes to rates. Once they go down, it’s difficult to bring them back up. Carefully consider what you’ll need to make up in volume to reach your desired profit margin with a lower rate.
4. Take good care.
It’s certainly no secret equipment that’s stuck in the shop can’t be out earning you money. Do what you can to avoid downtime by purchasing reliable products from suppliers you trust and who have a reputation for responsive customer service and fast turnaround for parts.
Once it’s in your fleet, include an equipment inspection with every rental. Doing a walk-around inspection with customers before a machine leaves the yard not only assures them the machine is in solid working order, it can also inspire renters to take better care of your equipment while they use it.
What’s more, regular inspections result in earlier detection of problems, often preventing the catastrophic failures that can lead to costly downtime.
5. Keep it up to date.
Every rental fleet includes those tried-and-true items that have been around since the beginning of time and keep on earning, despite the appearance of wear and tear. But let’s face it, customers are generally attracted to equipment that looks new and has the latest technology. To ensure your machines pass muster, rotate the fleet to encourage even wear, and be sure to phase out units when they begin to cost more than they’re worth to keep around. Meanwhile, keep your machines looking new by keeping them clean, touching up the paint periodically and maybe even spraying on some tire black. These simple things can go a long way toward making your fleet shine bright, which is its own inexpensive form of advertising.
Equipment utilization earns the income that keeps your business running. Fortunately, there are many variables that affect how often your machines are rented. Just don’t leave them up to chance. With these five tips, you can begin to take a strategic approach to ensuring renters consistently choose your equipment over the competition’s.
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