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 dealers 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 trade-off. Dealers 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-wracking for a rep to have to tell the customer they'll be receiving an invoice for damage when there is no real proof. Your sales and customer service teams want to be building relationships with your customers, not fighting with them over the damage.

Dealers don't need to make a trade-off between eating equipment rental damage costs and fighting with the customer.

We've seen the best heavy equipment rental operators realize that you don't have to decide between eating the cost and fighting with the customer. When you have good documentation, it builds a relationship of trust and accountability. Customers feel like they're being treated fairly because they know they're not going to get charged for damage 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 into a fight with the customer when they notify them of damage. Sharing clear "before" and "after" videos and pictures take 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 collect damage costs quickly and without conflict.

When damage occurs, the best rental operators 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 checkout.

2. 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 two to four hours of the equipment returning to the lot, ideally immediately after it's unloaded.

3. If equipment comes back damaged, notify the customer immediately.

This effectively manages the customer's expectations. Even if you don't have an estimate prepared, they can see that equipment damage has occurred and that they can expect an additional invoice for it. 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. How you have the conversation with the customer matters.

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 download a PDF inspection summary from the Record360 dashboard with images of the damage selected.

Jesse Buckingham is the CEO of Record360, an inspection management system that helps thousands of rental shops operate with confidence. Their simple tools help operators build relationships of trust and accountability with customers and increase damage collections. Prior to leading Record360, Jesse was a strategy consultant to Fortune 500 businesses with Bain & Company and worked with high-growth technology businesses. He earned his MBA from the Stanford Graduate School of Business, where he focused on technology strategy and entrepreneurship.

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