Blog Post

Multiply your equipment revenue with these critical steps

Why make just enough from your equipment rental business when you can multiply your revenue tenfold?

I know this may sound difficult to some, but 10Xing your equipment rental revenue is not as difficult as you think. Most equipment rental companies could achieve this if they only followed the right strategies.

While there is no one-size-fits-all formula for growing equipment rental revenues, you can build upon the tried and tested tips in this guide to 10Xing your equipment rental revenue.

1. Scale your rental business

Work with domain experts to scale your operations and increase your revenue.

Collaboration lets you combine their industry knowledge with your business experience. They can help you understand your industry’s dynamics better, build relationships with key players, and leverage industry-specific know-how to plot the best approach to scale your operations.

Technology is another crucial factor for scaling.

Developing a reliable technology infrastructure increases your efficiency and reduces disruptions as you scale. It allows for easier data access and migration and streamlines your team’s collaboration internally and with third-party agencies.

What’s more, robust technology platforms have data and analytics features you can leverage to track and quantify the efficiency of your equipment rental business. By studying the data generated you can identify which parts of your processes aren’t bringing you meaningful results and which ones do.

2. Develop a culture of customer service

What does customer service have to do with equipment rental revenue? It’s the key piece of the puzzle to develop long-lasting relationships with your customers.

By making customer trust and rapport a central part of your company’s culture, you cultivate a team that’s genuinely interested in your customers’ welfare. This paves the way to higher levels of customer satisfaction, which leads to more loyal customers for your equipment rental business.

Bolster the customer-focused culture by leveraging the right technology to streamline your workflows, allowing you to deliver exceptional customer support.

Develop your tech stack and Enterprise Resource Planning (ERP) system from a long-term perspective. This helps you avoid adding unnecessary or duplicate tools that cost you more and hinder efforts to scale your business.

3. Build strategic partnerships

Unless you have every piece of equipment under the sun, from aerial, earthwork, to general construction, you can’t accommodate all of your customers’ equipment needs.

Cooperate with your competitors so you can help each other out. Partner with your competitors, assess what each company does well, and determine the best way to work together to establish a win-win situation for both your businesses.

Entering into Coopetition can also give you access to your competitors’ customer base.

Most customers stick with an equipment rental company because they trust the people, the process, and the services’ quality.

Partnering with competitors can earn you a bit of that customer trust since working with competitors can indicate how your competitor trusts you enough to partner with you.

This way, the next time your competitor doesn’t have the customer’s needs, your business could be their next choice.

4. Hire good blue-collar workers

Blue-collar workers know how your equipment works and understand the hassle your customers go through when the equipment breaks down. This allows them to empathize with your customers even more so than sales people who often do not have hands-on experience and knowledge with your equipment.

Empathy lets your blue-collar workers help with both their hearts and minds instead of merely going through the motions or the list of tasks to get things done.

When you have a team that’s genuinely interested in helping your customers, you can be sure your customers can feel their sincerity. This, in turn, makes them feel valued and important, which ultimately makes them want to stick with you and refer people your way.

5. Digitize your inspections

Recording your fleet’s condition is vital to protecting your assets and ensuring you don’t lose money in case of damages caused by the carrier and equipment misuse and abuse.

Recording your inspections also keeps you from handing off damaged or malfunctioning equipment to your customers, which could ruin your relationship and impact your revenue.

Record360 allows you to streamline your inspection process through digitization. The app lets you take high-resolution photos and videos to document your rental equipment’s actual condition, upload them to the cloud, and immediately inform your customer.

Doing so gives you irrefutable proof in case of disputes, eliminates arguments with your customers, and avoid paying for repairs for equipment damages you didn’t cause.

With the right technology, you’ll get a more granular view of your equipment’s condition and components before handing it off and after it comes back from the customer.

6. Bill customers for damages while preserving your relationship

Equipment wear and tear is inevitable. As long as you’re reasonable and fair about identifying damages and wear and tear, your customers are more likely to accept responsibility and pay for their part.

That is why the before and after photo and video records are crucial to determine how much is damage and wear and tear.

Tracking and documenting everything can help you settle disputes properly and maintain a healthy relationship with your customers.

What’s next?

While this guide is incomplete, you can use the tips as a starting point to 10X your revenue. These tips are tried and tested to work, so if you put in the effort to implement them, you are bound to skyrocket your equipment rental revenue.

Interested in learning more about Record360? Schedule a demonstration today.

Renting assets such as heavy equipment and trucks come with significant risks. Any theft or damages to your rented assets can lead to expensive liabilities and hurt your bottom line big time.

That is why it’s crucial to have a solid rental contract in place to protect your business and manage risks, including equipment malfunctions leading to contractor lawsuits and contract breaches that leave you with hefty legal bills.

In this guide, we’ll cover several tips on making your equipment leasing and rental contract legally bulletproof and the terms and conditions you should build into your agreement.

1. Know your implied legal duties

Before getting into the nitty-gritty of what makes a solid leasing agreement, you’ll need to know your responsibilities as the lessor under the rental contract.

Duty to inspect

Check the equipment when you first get it from the manufacturer and when it comes back from the customer to ensure it’s safe and reasonably free of obvious defects.

Duty to instruct

Inform customers about the proper and safe use, storage, maintenance, transfer, repair (if required) of the equipment.

Duty to warn

Warn your customers of the potential dangers of expected misuse of the equipment, such as unloading an excavator from a flatbed without an appropriate ramp, which might cause it to fall and get damaged.

Most equipment manufacturers provide instructions and warnings on safe and proper machinery handling. Include a provision in your contract limiting your customers’ usage to the manufacturer’s intended use.

This way, you won’t be held liable if the equipment gets damaged because of the customer’s misuse of the machinery.

Also, include a contract requirement for customers to stop using the equipment in case of malfunctions and accidents and to notify you immediately to prevent further damage.

While all these can help protect your business from several potential legal issues, you can’t avoid all liabilities and might still get sued for anything that can go wrong.

Setting up legal protections through bulletproof contracts, having a good process of getting signatures, and establishing proper documentation is crucial to lower your legal costs in case of disputes.

The more comprehensive these legal protections are, the more likely you’ll discourage other parties from filing claims and lower the amount you have to pay in case of a settlement.

2. Increase legal protection through your equipment rental contract

A rental contract touches on many areas of leasing exposures, such as equipment damages, class action lawsuits, and personal injury claims. If your agreement doesn’t cover these risks, you leave your business open to a long list of potential liabilities.

That is why you need to ensure your contract includes all the necessary information and build terms and conditions, rights, and remedies into your leasing agreement to protect your business.

An excellent way to increase your legal protection through your rental contract is to have a Master Services Agreement (MSA) with your customers.

An MSA sets the terms for any additional rental contracts that you sign with your customers in the future.

This way, when you need to exchange or add new pieces of equipment to the contract or do multiple business arrangements with existing customers, you won’t need to create a revised agreement and get it signed every single time.

An MSA provides your business some umbrella protection if you don’t get a signature or don’t have a rental contract for some reason since the master lease will be the assumed terms of your equipment rental agreement.

Push for master agreements, particularly if you’re doing repeat business or leasing $50,000 to $200,000 worth of equipment as a first line of legal protection against potential expensive liabilities.

At a minimum, if you’re doing daily rental contracts with new customers, ensure your agreement includes a provision that says, “This contract and these contract terms will apply to all future rented items and agreements with the lessor,” but your safest bet is to go for an MSA.

Master agreements vs. Individual rental contracts

Daily rental contracts are single page front and back agreements commonly used for one-off rentals of one or a couple of equipment separately.

An MSA is a legal document that states the terms of the relationship between the lessor and lessee going forward. It contains the terms both parties agreed to, negotiated, and signed off on once.

So if your customer rents your equipment, your company sends a purchase order to your client and processes the release and delivery of the equipment. The customer then pays for the rental amount and accompanying fees according to the payment terms in the MSA.

With this, you won’t need to renegotiate the contract terms and conditions for each equipment or revise your existing contract since customers are reaffirming the master agreement every time they rent your machinery.

This eliminates a key bottleneck of the transaction process for both you and your customers while ensuring your business has the legal protection measures in place through your rental contract.

A vital aspect of this process is documenting the condition of the equipment when you released it, when it arrived at the job site, and when it’s returned to you as this provides evidence of the charges to your customer.

The better you document the in and out process of your equipment, the more evidence you have, and the more likely you’ll get paid and have solid evidence in case of a dispute.

3. Use the right technology to obtain authorized contract signatures

Getting signatures on your agreement terms can be challenging with the endless back and forth that comes with paper contracts. You’ll also need to make sure the person signing the contract is authorized to sign on behalf of the company or lessee.

Use verification technology including geolocation, time stamps, signatory Internet Protocol (IP) addresses, Public Key Infrastructure (PKI), and digital signature apps to help validate contract e-signatures and signatories easily and in real-time.

With this technology, you get your legal documents to someone you’re sure has the authority to sign, maybe the company owner or president, and ensure the signature is valid and will hold up in court.

Building all this technology into your process makes obtaining and verifying signatures more reliable and efficient than pen and ink rental agreements.

4. Implement a Damage Waiver policy

When you sell damage waivers, you’re essentially selling a waiver of your claims to collect physical damage to your equipment when it comes back from a renter. This usually comes in an additional 10% or 15% of your rental fee.

Damage waivers allow you to offset your company’s long-term costs associated with equipment repairs and replacements with the percentage you get from your damage waiver sales.

However, you need to implement it properly and review your current damage waiver program to resolve potential disputes and avoid lawsuits by considering these tips.

• Include a separate line item for the Damage Waiver fee charge on the front of your equipment rental contract.
• Add a statement that says, “Damage Waiver is optional” on both the front and back portion of your rental contract. This shows customers that they can opt out of and not pay for the waiver.
• Include a Damage Waiver provision on the back portion of your rental contract or in a separate addendum. Use simple language and as little legal jargon as possible so customers understand the terms easily.
• Use print large enough for customers to read and include language in your rental contract that states, “A larger-font version of these Damage Waiver terms and conditions is available on request.”
• Provide a separate Damage Waiver guide or Addendum to customers who purchase the waiver to ensure they understand its terms, policies, and coverage.
• Train your counter employees on the value of Damage Waivers and ensure they can communicate the savings on costs and time the waiver provides your customers.

Implementing a Damage Waiver policy can get tricky, but as long as you know how best to administer your program, you’ll gain its benefits, offer its value to your customers, and avoid lawsuits.

Additionally, check with your insurance company first for coverage, or you could be in for a terrible surprise when you end up with badly damaged equipment and your insurance policy doesn’t cover it.

Make your contracts legally effective now

Creating a solid rental contract helps you protect and legally represent your business effectively from equipment leasing risks.

It also makes your equipment rental processes more efficient since all the terms and conditions are clear-cut from the get-go, preparing you for legal issues, lowering your legal fees, and reducing lawsuits.

Interested in learning more about Record360? Schedule a demonstration today.

We’ve worked with hundreds of equipment rental operators across the country and the most successful operators we’ve seen follow a simple winning strategy. Three core pillars matter most: 1) maintain quality assets at reasonable prices; 2) develop loyal customer relationships and 3) hire great talent.

 

 

1) Maintain quality assets

The best operators maintain high quality and good looking assets at reasonable prices. The way your fleet looks matters more to customers than it should. They notice scratched paint jobs, dirty equipment and dings. These issues might seem cosmetic. But your customers assume that if the asset appears poorly maintained, then the asset quality is poor. Over time, your brand will become associated with low quality assets, which will drive away your most valuable customers.

At the same time, you need to maintain quality, and the perception of quality, at reasonable prices. You can’t always have the newest fleet. If your fleet age is too young, your fleet costs will be too high. Similarly, if your equipment is always getting damaged and you can’t collect on that damage, your unrecoverable maintenance costs will be too high. The key is to maintain good looking, quality assets at reasonable prices.

2) Build loyal customer relationships

You must build loyal relationships with customers to win. It’s always easier to expand an existing customer relationship than it is to develop a new one. You’ve already won your customer’s trust. You already know how to work with them. Your sales and service teams are already calling on them. Both you and your customer have already made the investment to put the groundwork in place. 

As a result, the highest return on your team’s time will be from expanding your share of wallet with your best customers. Expanding your existing customer base relies on building relationships of trust and accountability so both you and your customer are confident investing further in the relationship.

3) Hire great talent

Hiring and cultivating great talent is critical to outperforming in equipment rental. Hiring and retaining talent is becoming increasingly important given the shortage of skilled technicians, but the principle applies to all functions.

To hire and retain the best talent, you need to build a strong culture that attracts the best talent and you need to build processes and provide tools that make it easier for your employees to be productive so they can flourish in their roles.

Traditional inspection processes threaten operator’s ability to win

Traditional inspections processes threaten the rental operators ability to execute a winning rental strategy. In the old world, equipment rental inspections were done with cumbersome processes and technology like pen and paper, carbon copies forms or using digital cameras and SD cards to upload to shared drives. These poor processes result in poor condition documentation, which makes it hard to charge customers when damage occurs without threatening the relationship you’ve built with them.

Poor documentation directly impacts the three pillars of a winning rental strategy. Equipment damage hurts your equipment quality and brand and increases your fleet costs which compresses margins. Charging customers for damage without good documentation erodes trust and can lead to fights with customers which harms the relationship. Forcing your employees to use clunky processes to do inspection is frustrating for your hard won talent.

Inspection management software is transforming rental

The best operators are transforming their equipment inspection process by implementing modern inspection management software like Record360. Modern inspection management software is cloud-based, includes high quality photo and video, and provides condition records that are easily searchable and shareable. It’s helping the strongest operators execute a winning rental strategy.

First, they’re able to maintain quality assets and a brand they’re proud of.  Renters who identify new damage through careful inspections can more easily charge customers for the damage. There’s simply less to argue about. Using these chargebacks to repair the equipment keeps the fleet in quality condition.

Secondly, they’re able to build customer relationships based on trust and accountability. Sending rental inspections to your customers using a platform like Record360 builds confidence with your customers that you won’t charge them for damage they don’t cause. They’ll feel like they’re treated fairly and trust is built. It also incentives your customer to take care of the equipment because they know they’ll be charged if damage does occur.

Finally, they’re able to provide their hard won employees with simple and easy to use inspection tools that make their jobs easier. Clunky software or hard-to-manage paper processes will frustrate your most valuable employees. Simple, easy-to-use rental inspection platforms make them more productive and eliminate outdated processes.

Inspection management software can increase damage collections by $100K+ per year

A great example of inspection management software supporting a winning rental strategy is the incredible rental growth story of Komatsu West.

Komatsu West has 11 locations and has grown their rental revenue from $5M to $60M – an astonishing achievement. Implementing Record360 helped them on that journey. By using Record360, they’ve not only been able to keep their machines in better condition, but they’ve also been able to increase their damage chargebacks by over $100k per year. Their rapid rental growth can also be attributed to a loyal customer base that knows they’ll be treated fairly and will never being charged for damage they didn’t cause. On top of this, their employees love the simplicity of documenting a rental with a simple checklist and video on an iPad or iPhone. 

According to Joel Cook, the EVP of Mining, Construction and Rental Sales, “Record360 has saved us hundreds of thousands of dollars. It was very easy to implement, everybody was excited to have it, and I never heard any complaints from employees.”

If you’d like to hear the full story, check out our full interview with Joel Cook here.

Investing in inspection management software is key to executing a winning strategy

Equipment rental inspections are evolving. The strongest operators are investing in modern inspection software like Record360 to execute a winning strategy. Times have changed in rental, and those that are adapting are winning.

Interested in learning more about Record360? Schedule a demonstration today.

Stomaching equipment rental damage doesn’t need to be a ‘cost of doing business’

Many rental operators think equipment damage is just ‘the cost of doing business’. They rely heavily on their best customers for revenue, and they want to build long-term relationships. When equipment comes back damaged, some operators think they can’t or shouldn’t be charging for equipment damage because it will jeopardize the relationship and push the business away.

This is a false tradeoff. Operators think this way because, historically, they’ve never had good enough equipment condition documentation to have a non-confrontational conversation with a customer about damage. When you don’t have good documentation, telling a customer they’re being charged for damage naturally causes tension and frustration. Customers will say: “How do you know it wasn’t like that when you gave it to me? Where’s the proof that it wasn’t damaged on the truck?”.

Having conversations about equipment damage without documentation is also tough on your team. It’s nerve-racking for a rep to have to tell the customer they’ll be receiving an invoice for damage when they have no actual proof. Your sales and customer service want to be building relationships with your customers, not fighting with them over damage.

Operators don’t need to make a tradeoff between eating equipment rental damage costs or fighting with the customer

The best heavy equipment rental operators we’ve seen realize that you don’t have to decide between eating the cost or fighting with the customer. When you have good documentation, it builds a relationship of trust and accountability with your customer. Customers feel like they’re being treated fairly because they know they won’t get charged for something they didn’t cause. Documentation also incentivizes the customer to take better care of the asset because they know they’ll be held accountable if damage does occur.

Good documentation also gives your team peace of mind that they’re not about to enter a fight with the customer when they notify them of damage. Sharing clear before and after videos and pictures takes the heat out of the conversation. When customers see clear evidence of the damage they will generally pay without protest. Even if you decide not to charge for the damage, you’re now able to tell the customer directly that you haven’t charged them for it, which helps you build credits in your relationship with them.

Heavy equipment rental operators should follow best practices to rapidly collect on damage without conflict

When damage occurs, the best rental operators we’ve seen follow clear best practices to get paid quickly for damage and avoid confrontation with customers.

Damage doesn’t need to be a ‘cost of doing business’

1. The customer should always receive a copy of the inspection report when the equipment is checked out.

This sets the expectation that you care about damage and encourages them to take good care of the equipment. It also builds trust because they know they’re not going to be charged for pre-existing damage. The best way to implement this is to have Record360 automatically send an inspection summary to the customer on check-out.

2. You should inspect equipment immediately when it gets back in your yard

If you wait too long to do your check-in inspection, customers will argue that the damage occurred on your lot, not theirs. Build a practice of doing inspections within 2-4 hrs of the equipment returning to the lot, ideally immediately after it’s unloaded.

3. If equipment comes back damaged, you should notify the customer immediately.

This manages expectations with the customer well. Even if you don’t have an estimate prepared, they can see that equipment damage has occurred, and they expect an additional invoice for damage.

The best way to do this is by having an alert for new damage in your check-in inspection that notifies the rental coordinator so they can send the inspection summary to the customer immediately.

4. It matters how you have a conversation with the customer.

You don’t want to poke customers in the eye about equipment damage. Frame the conversation gently – “You might not be aware this happened, but it looks like the equipment was damaged. No worries. Our team is preparing an estimate for repairs that will be sent along with your final invoice.”

5. When you send the invoice for damage, include the inspection summary.

This gives the customer confidence you’re not unfairly charging them – they have a clear record of damage attached to the invoice so they know what they’re paying for.

The best way to do this is to download a PDF inspection summary from the Record360 dashboard with images of the damage selected.

From dents to ripped-off doors, rental damage doesn’t have to be a cost of doing business. With consistent documentation, you can more easily charge customers for damage and build trust with them in the process.

Interested in learning more about Record360? Schedule a demonstration today.