Blog Post

5 tips to increase fleet utilization

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.

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

How to make your rental contracts legally bulletproof

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.

Winning rental businesses are transforming their business with inspection management software

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.

How to design the perfect inspection process for equipment rental operators

A step by step guide for equipment rental operators to implement inspection management software into their check-in / check-out process

One of the biggest fears equipment rental operators have when implementing inspection software is figuring out how it will impact their existing processes. They understand that damage is an issue. They know the software will increase damage collections. But they worry about how to implement the change. Who should do the inspections? The technicians or the drivers? Where should we do inspections? In the yard or at the job site? Should we inspect only on check-out, check-in, or both?

At Record360, we’ve helped thousands of rental locations transform their inspection process. From this work we’ve developed a strong perspective on what works and what doesn’t. This guide contains those learnings. It will help heavy equipment rental operators develop the perfect inspection process that will get adopted quickly and drive immediate results.

Operators should follow two principles when upgrading their inspection process

Equipment rental operators should follow two principles when implementing inspection software:

  1. Simplicity drives consistency, and consistency is key. To get the benefit of inspection software, you need to follow the same process for every rental, every time. To get consistency in process, the process needs to be simple so it’s easy to understand and easy to adopt.
  2. You want to upgrade your process, not overhaul it. It’s easier for your team to make adjustments to their process and behavior than it is to do something completely new. This means mirroring your existing inspection process closely so the new process is intuitive and fits into your existing workflow easily.

When is it better to have drivers do inspections?

Equipment rental operators have two options for doing inspections:

  • Option 1: Drivers can do inspections when they drop off at the job site
  • Option 2: The service team can do inspections before the equipment leaves the yard

Having drivers do inspections has some advantages. If you have your own drivers for the majority of rentals, your drivers will pick up inspection software quickly because they’re used to getting signatures at the job site. They love the ease of using a simple mobile app to take photos and videos after they’ve unloaded the equipment. It helps protect the driver from arguing the equipment arrived at the job site damaged, was dropped at the wrong location, or was damaged in transit

However, if you use third party drivers, or customers frequently pick up equipment, Option 1 is harder to implement:

  • It’s harder to get third party drivers to follow the process. They’re more interested in dropping the equipment off, attempting to get a signature, and getting out of there quickly.
  • When the delivery of equipment varies from your own drivers to third-party haulers or customer pickups, it’s harder to enforce a consistent process.

For most equipment rental operators, having your service team do inspections is best

For most equipment rental operators, it’s better to have your service team to do inspections as they prepare the equipment for rent. It’s much easier to drive consistency in your process, which is critical for protecting your assets and increasing your damage collections.

  • Service technicians already follow a rental ready process, so it’s easy to incorporate inspection software into that workflow
  • Every asset goes through the same process, so you make sure nothing gets missed
  • Service technicians naturally want to use a simple mobile app because it helps them do away with clunky paper forms or digital cameras and shared drives

What is the perfect inspection process?

The inspection process outlined below incorporates the best practices and learnings from helping thousands of rental shops upgrade their processes. This process is consistent, simple and mirrors existing workflows for most operators closely. If you follow this process on every rental, operators can expect dramatic increases in their damage collections within months.

Equipment Check-Out

  • Customer makes a reservation
  • Rental coordinator instructs yard team to prepare the asset for rental
  • Yard team / shop team uses Record360 to follow a consistent inspection checklist and take photos and videos
  • Rental coordinator adds the specific equipment to the contract
  • Drivers picks up and drops the equipment at the customer

Equipment Check-In

  • Driver drops the equipment back in a specific area of the yard
  • Yard team unloads the equipment and immediately performs an inspection with Record360
  • If no damage is present, equipment is washed and prepared for next rental
  • If damage is present, an email trigger from the mobile app sends an alert & inspection summary to the rental coordinator
  • Rental coordinator immediately sends inspection summary to the customer to notify them of damage
  • Service department prepares repair estimate for damage
  • Rental coordinator closes contract and invoices the customer for damage
  • Service department repairs the equipment

Rental operators that follow this process operate with confidence because they know they have good documentation to rely on in the event damage occurs.

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

How to double damage collections while strengthening your customer relationships

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

Many rental operators think that equipment damage is just ‘a 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 real 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’re not going to get charged they didn’t cause. Documentation also creates an incentive for 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 video 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 the 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.