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.
The winning strategy in equipment rental is simple
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.