Customer disputes come with the territory in business, and rental operations can be more prone than most. A rental transaction isn’t finalized until the customer no longer needs the product or service. This small but notable shift in leverage adds complexity to customer complaints.
Resolving a rental dispute comes at a cost. It takes time, effort and money; three resources that would be better used to operate your business. The goal is to resolve the dispute as cost effectively as possible while preserving the customer relationship.
One survey of small and mid-sized companies estimates that the cost of unresolved disputes equated to 2.8 percent of annual revenue—and the smaller the business, the higher the percentage. Costs typically derive from poor productivity, impaired cash flow, damaged relationships and monetary concessions.
Even a 1-percent loss in revenue should be incentive enough to make sure your employees are using a fair, fast and effective resolution process. Fortunately, your rental management system can produce the factual information you need to address most customer disputes.
One issue, different details
If you’re the person who typically deals with customer complaints, certain situations stick in your mind. It could be that particularly abrasive customer, that “return” left outside the bay on a holiday, that pump brought back without a hose. While the scenarios change, the nature of most disputes is the same: someone wants to pay you less than you think they should.
Some of the more common rental transaction disputes have to do with rate details, late returns, ancillary items and maintenance responsibilities. In all of these cases, documentation perseveres. By signing the contract, the customer has acknowledged the rates, terms, overtime charges and any maintenance responsibilities. The system eliminates human error in performing the calculations. No-charge items that accompany the rental item are itemized to serve as a return checklist.
Beyond these basic but important protections, there are many more answers to dispute resolution residing in your rentals system. Here are some examples:
Called off-rent: When a customer calls an item off-rent, typically a code is generated by the software and transmitted to the customer as proof. This is a safeguard against unverified claims that an item was called off-rent on a past date. If your rental system has a customer portal associated with it, an item can be called off-rent online and a code generated on the spot.
Damaged equipment: There are two considerations here: damage prevention and recovery. Because a rental system automatically prints safety and warning messages on a contract (assuming you’ve entered them into the database), the customer is given guidance specific to each type of equipment rented.
The contract can also specify repercussions — financial or otherwise — if damage occurs, and it documents whether damage waiver applies. If your system is capable of archiving images, digital photos of the damage can be stored in the permanent record for insurance claims and repair costing.
Equipment hours of use: Hours of use is a common way to manage metered rental assets. Telematics — the long-distance transmission of computerized information — can be used to transmit meter readings back to the rental system in real time, where the data is used to calculate rent and schedule maintenance. Telematics are also useful in determining whether a customer is continuing to use a machine after it was called off-rent. It gives you “eyes on assets” when they’re out of the yard.
Equipment location: If you haven’t heard of a geo-fence yet, you will. This virtual barrier is fast becoming a popular benefit of telematics for rental operators. It electronically defines boundaries when a customer rents a piece of tracked equipment. A text message or email alert is sent to the rental operator when the “fenced” rental equipment enters or exits the boundaries.
A less automated, but still effective, method of keeping an eye on equipment is to use an Internet portal intended for that purpose. The portal shows the current status and location of tracked equipment, and whether it has moved beyond a boundary.
Find a middle ground
With today’s mobile applications, commitments are often signed miles away from the rental location, but the rental system is still the engine behind even the most remote transaction. The ease of data transmission — from telematics and web dashboards to online portals and electronic signature capture — means that rental activity is more documented than ever before.
If the data indicates an unwarranted complaint, technically you’ve won the battle, but it’s a short-lived victory. The important thing is, where do you go from there? If the dispute is a simple misunderstanding, a few minutes of friendly dialogue, contract in hand, may be all it takes. If the dispute is more serious, it may make sense to bend the rules a bit. This will ultimately cost you less than losing the customer or being forever bad-mouthed.
Your data should never be used as a club to beat the customer into submission. Consider offering a concession so that you can move forward together on a good footing. It could be a waiver of interest on past due bills, a “weather discount” or a permanent adjustment to the customer’s account — almost any gesture, however small, will have the desired result.
For example, say that a customer frequently returns equipment one or two hours late because of the nature of his work schedule. Rather than have him repeatedly balk at overtime charges, you can assign an automatic grace period to his account for all rentals on all days of the week, or just certain days and/or times of day. Computers can be very good at this kind of proactive resolution, particularly if your software gives you multiple ways to customize the account relationship.
Impartial, expeditious, accurate and well documented are qualities that are synonymous with effective dispute resolution. Looked at another way, they describe the value of bringing technology into the process.
J.J. Shea is general manager of Solutions by Computer, Springfield, Mass.