Dealer or Rental Company: Who Does It Best? CED Magazine, July 2006
Article Date: 07-01-2006
Copyright (C) 2006 Associated Equipment Distributors. All Rights Reserved.
Differences between renting from a rental company and a dealer only become an issue when they are important to the customer.
As rental becomes a more attractive option to customers, the line in the sand distinguishing rental companies and equipment dealers is blurring. Each organization is working hard to build the infrastructure and business model needed to offer a great customer experience.
Given the inherent differences when comparing an equipment dealership to a rental company, is one better suited to serve the needs of the customer?
Some differences are deal breakers, while others are subtle and can be overcome by an attentive and well-trained employee. If that employee is focused on building relationships, serving the needs of the customer and getting the rental, the differences begin to evaporate.
The critical thing to remember is that the differences between renting equipment from a rental company and a dealership only become an issue when they are important to the customer.
Determining what is important to the customer typically begins with the phone call. It's a function of the employee answering the phone doing a good job of listening and asking the right questions, such as: Have you rented from us before? How will you be using the equipment? How long will you need the equipment? Where is the jobsite?
These important qualifying questions allow the employee to learn more about the customer's needs and begin building a relationship. This is true on the phone and in person.
When a customer has a relationship with you, it's difficult for him to go elsewhere. He's relying on that rental equipment to get the job done and needs to rent with confidence from someone he trusts. That's true whether the customer's renting from a rental company or a dealer.
Putting It To The Test
We called several equipment dealers and rental companies posing as customers to compare the phone skills of the employees and found no significant difference between how our calls were handled. When our shopper said they might rent instead of buy or buy instead of rent, neither the rental companies nor the dealers were prepared to discuss the benefits of renting vs. buying or vice versa. Doing so would have presented a great opportunity to differentiate the company from the competition.
It's time to get your employees out of the order-taking mode and develop sales people focused on building relationships and solving the customer's needs. Let's look at some scenarios:
Many employees would respond saying they can't help the customer. They are in order-taking mode, and they turn away business. However, an employee focused on serving the customer would look at options: Can we deliver the skid-steer and mini-excavator now and deliver the material handler at a later time? Do we have a material handler at another location? Can we rent the material handler from someone and re-rent?
- A customer calls your dealership regarding a rental. They have worked with you in the past. They need a skid-steer, a mini-excavator, and a 40-foot telescopic boom material handler. They need them for a job starting in two days. You have the skid-steer and mini-excavator, but don't rent telescopic booms.
How would your employees handle this situation? Are they prepared to think outside of the box to save a customer from going to a competitor?
This is not your company's normal practice. What is your employee trained to do in this situation? At a minimum, will they talk to their manager about options?
- A customer calls regarding a long-term rental. As your employee is discussing the opportunity with the caller, your employee discovers the customer may want to purchase the equipment eventually.
How will your employee react? Will he let the rental get away? If you know your prices are competitive, this is a perfect time to educate the caller on the advantages of renting from your company.
- A customer calls for a price on a rental. When the caller hears the price, they comment that they can get it for less at a rental company.
Share the age of the equipment, your service commitment, guarantee of satisfaction - whatever your competitive advantages are - with the customer. Sure, price is important, but it's not the only factor in a rental decision.
Controlling Customer Experience
Developing a team of well-trained employees adept at delighting customers is a challenge. And with stiff competition and the growing number of options customers have when renting equipment, dealers and rental companies alike need to employ every advantage possible to make the customer's experience memorable.
If your employees understand their importance in the customer service cycle, they should be open to developing the following skills, creating a competitive advantage for your company:
Individual interaction with customers. Knowing how to conduct a quality interaction and how to go beyond renting a piece of equipment to build a relationship. When they take an interest in a project and get to know a customer, suggesting products or service that make a difference to the customer's productivity or bottom line will become second nature.
Qualifying customer needs. Asking the right questions can uncover the information needed to have specific product discussions. Rental representatives should never assume price is an issue. By spending time listening to a customer's situation, a representative may discover training or maintenance are more important.
Sharing competitive advantages. Employees should anticipate the customer will compare your company with the competition and know what makes your business superior. Likewise, rental reps should not assume having many machines is necessary to beat the competition. If you have the one piece of equipment a customer needs, the number of models you have is not an issue.
Make sure the customer knows about the services you can provide beyond equipment rental.
Responding to objections. If customer asks, "Why shouldn't I go to a competitor?" your employee should be able to win over the customer without simply offering a discount. Knowing the unique benefits your business has to offer, being able to communicate them in a concise manner and backing them up through the service you provide will be worth much more.
If it's true a time-starved customer is mainly looking for a reason to stop shopping, your frontline sales team has a golden opportunity to secure that customer's business from the first call or visit. Whether you're a dealer or rental company, win the business with an ability to listen, a thorough understanding of customer needs excellent product knowledge and the ability to close the sale.
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