Have You Got the Right Fit for Rental? Written By Pam Gruebnau
Article Date: 08-01-2007
Copyright (C) 2007 Associated Equipment Distributors. All Rights Reserved.
Rental-specific software is designed with a spectrum of business tools tailored to this distinct area of your business - without it, you may be short-changing your own operation.
While nearly 100 percent of construction equipment dealers have rental fleets, AED’s Rental 2006 survey found that 70 percent of dealers are not using software developed specifically for rental operations. Instead, they are trying to manage their fleets using dealership management software.
In sharp contrast, the same report also found 65 percent of all rental companies and 100 percent of larger rental companies do use rental-specific software –a business practice that rental industry experts agree gives rental companies a significant competitive advantage in equipment rental.
“I find it amazing that so few construction equipment dealers are using rental-specific software,” says rental expert and consultant Dan Kaplan of Dan Kaplan Associates, former CEO of Hertz Equipment Rental. “Rental companies got where they are today because they were able to use the data and services that rental-specific software provides. I feel strongly that dealers cannot operate successful rental operations without rental software. It will pay for itself in a very short time.”
Rental software doesn’t just manage your rental business – it tracks it, understands it, and provides you with the information to improve your processes, expand your business, maximize fleet rentals and increase profitability.
“If you’re going to rent and rent effectively, you need to use the same type of rent-to-rent software as a rental company,” said John Andersen, vice president and PFW evangelist at PFW Systems, creators and publishers of IntelliDealer Rental Counter software. “Most dealers have basic rent-to-purchase software as a part of their dealer management system, but to succeed and thrive in the competitive world of equipment rental, you need more than that; you need software that can handle all the complexities of rent-to-rent.”
Every rental contract, customer interaction, asset delivery or return, or service adds to the knowledge base of your business. Which equipment is the most popular, which costs the most to run, and which generates the most revenue? Which customers are your best sources of revenue and which generate the most profit? And, most important, which customers are actually costing you money? The rental-specific software will also track the level of customer service you are delivering. It also identifies how long it takes to get from request to contract and how long customers are kept waiting. Other tracked tasks include how many keystrokes it takes to initiate a contract or invoice and what your rental customer retention rate is.
Rental-specific software should be mining and evaluating this data and providing management and trend information specific to a rental operation.
“Your rental software should help you differentiate your service, improve your profitability and optimize your fleet so you can be successful in a very competitive industry,” said Nigel Miller, chief operating officer, SYSTEMATIC, a software firm that specializes in rental management.
Several companies market rental-specific software, each with its own unique set of features and benefits. A combination of some or all of the following features will allow you to maximize ROI on your rental fleet; uncover problems before they become critical; reveal trends, patterns and correlations; and track branch performance.
Tomorrow’s Technology Today
- Complete tracking tools: Information-gathering tools can help manage your rental fleet and provide utilization statistics by the hour, by the machine type, by the customer, by the brand or by the manufacturer. These tools allow a dealership to build an efficient, profitable fleet by keeping accurate and real-time data on the financing costs, maintenance costs, repair frequencies and profitability of each unit in the rental fleet.
- Inventory control: Perpetual inventory management can provide serial number control, meter calculations (component breakdown predictions and preventive maintenance scheduling), bar-coding, in-transit branch transfers, automated red tag/green tag status, warranty charges and flexible depreciation calculations.
Automated functions can then schedule routine maintenance, maximize uptime and revenue, minimize staff time and protect your equipment investment. Rental-specific software will also track inactive rental machines, missed rentals, inventory transfers between branches, and item repair histories.
- Rental counter automation: Automating your rental counter with an easy-to-use graphical interface allows your rental sales staff to convert quotations and reservations into rental contracts with one keystroke. The display should detail the availability of each unit in the rental fleet, allowing your staff to provide the customer with more accurate rental unit availability and minimize the customer’s wait.
Other features may include credit-card processing, automatic generation of work orders upon the return of rented equipment, insurance and damage-waiver processing, and applying a surcharge to the invoice for over-usage, based on machine hour meter readings. And some software will create inventory reservations months or even years into the future.
- Flexible pricing: Flexibility in all aspects of rental fleet pricing, such as “frequent renter” discounts, multiple rate books, group rates, and quantity breaks, will maximize revenue generation and improve customer satisfaction.
- Varied rental duration: The ability to efficiently rent for virtually any span of time – including hourly, half-day, daily, weekly or monthly – allows you to quickly and easily customize a rental for each customer.
n Optimized billing: One of the most common complaints of equipment users is the slow, confusing and inaccurate billing they receive on equipment rentals. Fully automated billing provides the ability to quickly and easily calculate optimized billing rates to keep costs down for customers and improve customer retention, while increasing profits for dealers.
- Automated contract generation: Fully automated contract generation is more efficient and accurate. Databases can immediately complete the contract with all necessary customer information.
- Rental-specific financial reporting: Financial reporting components should provide on-demand, real-time access to – and control of – financial resources, allowing you to view reports on accounts receivables, aging, rental assets sold, inventory valuation, reservations, and overbooked product categories.
The system should also forecast cash requirements; support multiple currencies and exchange rates; display detailed invoice histories; control credit limits by type of sale; and analyze flat and percentage discounts.
- Customer relationship management (CRM): Immediate access to customer information makes it possible for your entire staff to know your customers better, which helps them serve your customers better and provide personalized solutions. Rental software customer-relationship management features provide automatic access to pertinent customer information, such as customer profile, outstanding accounts receivables, contact information, invoice history, parts purchases, equipment and rental information, and customer preferences. Reports on inactive customers and customer payment histories may also be available.
- Total integration: The software should easily integrate with the dealership’s fixed-asset systems, service systems (work-order requests, preventive maintenance schedules, etc.), dispatch systems (trucking, deliveries, etc.), accounting systems and customer data systems. Ideally, the software will include a flexible reporting system that automatically shows you key performance indicators and trend analyses.
- Dashboard report: A rental software dashboard provides instant, easy-to-understand graphic access to information that allows managers to monitor key factors in real time. “The most successful rental companies use management dashboards to gauge the health of their businesses. A dashboard provides access to real-time, up-to-the-minute data and displays it in an intuitive, graphical way, giving rental managers the information they need to make intelligent and immediate business decisions,” said Don Whitbeck, CEO of SYSTEMATIC. “With this intelligent technology, you can customize the software to extract the metrics you want – profitability, utilization, average value per contract, etc. – to help move your business forward.”
Several current and emerging technologies, including RFID or bar-coded customer loyalty cards, thumb-print scanners, and RFID or GPS tracking of rental equipment, are presenting opportunities to combine with rental software to provide innovative business solutions, ground-breaking competitive advantages and additional revenue opportunities.
“With these technologies, your customers are recognized on contact, the moment they call or walk into a store,” said Miller. “The RFID or caller ID technology recognizes them and primes your rental contract with all their pertinent information, getting you to a completed contract that much faster.
“Rental equipment enabled with RFID and GPS technology can easily be monitored both in your yard and at the customer’s sites with little or no effort. The technology should dramatically reduce fraud and theft, instantly identifying when equipment changes sites or is heading away from you when it should be returning,” Miller added.
Whether you use a simple “off-the-shelf” rental software package or rental software with all the bells and whistles, rental industry experts agree that rental-specific software is the only way to manage an effective and profitable rental business.
“To maximize profits, dealers need to stop viewing rentals as a secondary part of their businesses and start viewing rent-to-rent as a process that is just as integral to their success as equipment sales or parts and service,” said Andersen.
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