Efficient operations improve profitability for rental businesses
As a rental business, you have to deliver on your customers’ expectations for good digital customer experiences, but you also need to have good systems to be competitive on operations. As a general manager, you are constantly working towards good profitability and enabling your employees to do more efficient work. To achieve this, it is important to review workflows and create effective routines. In a market where resource utilisation is so critical, parameters such as time savings, cost reductions and ongoing oversight are essential. In this article, we share experiences on how to create an efficient rental business from a digital perspective, and what it means for profitability.
“THE RENTAL INDUSTRY: The operating margins in the rental of machinery and equipment are on the decline, which indicates that competition is intensified”.
– Torgeir Reve, lecture The Rental Conference 2020 under the auspices of the Norwegian Rental Association.
How to operate efficiently and what it means for profitability
Utilization, inventory management, lead times and workflow are important parameters for rental companies. Digitizing manual processes is a key factor for this. Choosing a good rental system and rental program for your business can give you a competitive advantage. The technology and different standards are changing very quickly these days. New technological standards have turned upside down on many industries in the past. Therefore, choose a system that follows developments and is based on modern principles for it systems, for example, that it can be easily integrated against other systems. As accounting, service modules, GPS tracking, self-service solutions, credit check solutions and so-called Single Sign On standards.
For many rental companies, the income is a combination of rental days and services such as transport, assembly, crew handling and number of operating hours. A rental program that collects this data and provides a complete order and invoice basis creates an effective operating model. As a software provider, we are also seeing a growth in so-called self-service solutions. With a self-service service, the tenant can retrieve and return what they have rented with “digital keys” at any time of the day. This is especially for rental companies within trailers and smaller machines and tools. Self-service solutions provide a higher utilisation rate and is a competitive advantage to others that have to handle their opening hours.
What expectations do your customers have for online ordering?
Both as corporate employees and as private individuals, we expect to be able to make bookings and leases whenever it suits us with our schedule, at any time of the day. A good digital customer experience is therefore an important criterion. Easy bookings should be quick and efficiently, at the same time the rental service should offer good guidance on choosing the right type of products for the task you are going to perform. Whether the assignment is a construction project, an event, or the choice of the right sports equipment, you should easily get a recommendation, see the availability and be able to place an order. In addition, teaching how to use the equipment you are renting is important both to ensure that you as a customer are satisfied and to avoid damage to the equipment. Here we recommend simple instructional videos rather than heavy user manuals (which no one reads.. :-). A simple link to the instructional video in the order confirmation is often all it takes. In the example below, we have highlighted how the European Rental Association works with digitisation and gains in this.
A good rental program also gives you great data on your customers and opportunities to promote news and offers to them. As a rental system, this data is often associated with other CRM customer follow-up systems (e.g. Mailchimp to newsletters or SuperOffice or Zendesk to several follow-up activities). An article on marketing for rental companies can be found here.
How to have good inventory management?
Inventory tracking and availability are key factors for good profitability. Keep track of where the inventory is located. Track everything from machines to tools. This allows you to have a full overview of everything in your warehouse, so that when the customer is going to rent the product, you know what you have available and where it is located.
Have full control over condition to the inventory. Does it need maintenance? After a product has been leased, it is important to have digital tools and easily do a routine check to check if the product is in the same good condition. Many rental programs also give you reminders when your equipment should have service.
Employees in rental companies are much out in the workplace and little behind the desk. That’s why it’s important to access critical information on portable devices like tablets and mobile. Therefore you should choose a system that gives you the ability to have full control of your business and do simple tasks from your phone.
Streamline all document management
Digitize all signatures, business agreements, contracts, and receipts. This makes it more available when you need it and help saving time.
Pricing structure and profitability
Pricing has a lot to do with utilisation and profitability. Use a system that allows you to have a flexible price engine, enter your varied prices based on season and discount agreements, different contract types, etc. It should be easy to adjust the price to increase sales. There should not be complicated and take a lot of unnecessary time to create sales reports, overview dashboard, customer and sales data. There are several systems that do this automatically for you and will provide you with insightful information. Read more about it here.
Technology gives you opportunities, but it’s the exploitation that makes the difference.
With access to this in a well integrated rental system, you will be able to increase the productivity and profitability of your business. The technology has come a long way in many areas, but still rental as a business model is often characterized by many manual processes. There are many opportunities to create good customer experiences and efficiency using technology and data. Ultimately, it’s how your rental company takes advantage of these opportunities that makes the difference. Sharefox’s technology platform is now used in a variety of industries and with the Sharefox rental program you have the opportunity to create a more efficient rental operation.