The Move From Rental to Full ServiceBy Mary Seaman
Article Date: 02-01-2005
Copyright(C) 2008 Associated Equipment Distributors. All Rights Reserved.
NationsRent has been changing to better serve its customers as a full-service supplier.
Once strictly a rental company, NationsRent has begun to transition into a full-service supplier with a strengthened focus on customer expectations.
In the past 18 months, the company has begun expanding their capabilities to offer new and used equipment, as well as technical assistance, repair services, and a broader array of merchandise. With five full quarters behind them, NationsRent is proving that with the proper execution of the full-service concept, outstanding results are possible.
To serve as a full-service supplier, NationsRent first compressed the operating structure down to four layers: store manager, district manager, regional vice president and CEO. The company also expanded from three regions to six in order to put more resources closer to the customers, enabling each of the regions to meet individual customer needs on a local level.
Second, NationsRent established the new executive leadership team to lead the corporate staff, regional vice presidents and more than 3,000 associates. Members of the new executive team include: Jeff Putman, CEO; Bryan Rich, co-chairman; Douglas Suliman, co-chairman; Thomas Hoyer, executive vice president and CFO; Joseph Izhakoff, executive vice president, general counsel and secretary; John D. Malone, executive vice president, administration; and Charles Snyder, executive vice president of fleet & asset management.
"We've assembled a senior leadership team with more than 200 years of collective experience in this specific sector," says Jeff Putman, CEO of NationsRent. "During its tenure, this leadership group has delivered outstanding financial performance, combined with prudent asset management. Now it is facilitating the company's transition to an industry-leading full-service supplier."
The new team has enabled the company to adapt its service package to the unique needs of individual customers on a local and regional basis.
"In addition to keeping members of the NationsRent team, we brought in people that had rental and dealership experience," says Putman. "It was necessary to bring people on board with a variety of backgrounds in order to reasonably and profitably provide whatever the customer wants."
The transition to full service enables the company to offer customers various ways of getting equipment. NationsRent worked with an outside consultant to create a sales management effectiveness program centered on the principal of listening to the customer and helping them be successful. All of the company's salespeople carry a "rent vs. buy analysis tool." They use it to determine what's best for the customer in terms of renting or buying the equipment based on how they will use the equipment.
The increased focus on the customer is already proving valuable. Customers began to show their support for the new full-service model through a large increase in sales last year.
"That confirms our perception of what the market is asking for," says Putman. "We think it's a credit to our store managers and sales staff that they are able to make the leap from a rental focus to a role where they are building relationships by satisfying individual customer rental, sales, service and merchandise needs."
The transition to full service will be complimented by the addition of OEM dealership appointments in selected locations throughout the United States.
"The dealership sales and service model fits nicely into those plans and would give us the opportunity to offer a full line of parts and service in certain markets," says Putman. "NationsRent is always on the lookout for quality lines to represent through our stores. We are not de-emphasizing the importance of rental, but we do believe that by increasing our customer touch points, we will become an even more important solutions provider."
According to the company, the it's fleet is about 48 months old, but that changes each month as the company adds new fleet assets. The value of its fleet is slightly less than $1 billion in terms of fleet first cost. For individual fleet assets, the company is slightly over 100,000, according to Charles Snyder, executive vice president of fleet & asset management.
"Our biggest challenge right now is that equipment delivery lead times for 2005 have continued to increase," says Snyder. "Last year, most equipment manufacturers experienced double-digit growth, and we anticipate that 2005 will be no different. We have accelerated our fleet orders to adjust for longer lead times and increased demand."
According to Snyder, in the second half of 2003 and throughout 2004, NationsRent experienced a dramatic rise in rental rates. Although it's difficult to predict what will happen to rates in 2005, Snyder says he doesn't expect to see the sharp increases in rates continue.
"We're going to do everything we can to lead the industry in bringing rates up to the level that they need to be in order to provide an adequate return on investment," says Snyder.
What's Ahead for NationsRent
NationsRent recently opened its 267th store, which includes 100 Lowe's Home Improvement locations.
"The competitive advantage of our NationsRent At Lowe's locations is that a customer can order anything NationsRent offers from the Lowe's store location," says Putman. "In addition, if the customer needs delivery or technical support, we are structured to respond appropriately."
Over the next year, NationsRent will continue to focus on exceeding customer expectations and expanding their product and service offerings. In an effort to support this shift, NationsRent has invested in the design and training of a new strategic selling process, supported by customized web-based software tools.
"NationsRent is no longer the story of a turnaround; it's about the art of the possible," says Putman.
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