Communication Breakdown

Aug. 1, 2005
With contractors renting in increasing numbers, competition to capture their rental business is fierce, even when times are good, as they are right now.

With contractors renting in increasing numbers, competition to capture their rental business is fierce, even when times are good, as they are right now. Some rental companies make concerted efforts to listen to their contractor customers to understand their needs and concerns, while others are more likely to take the loyalty of their customers for granted.

In preparation for this article, RER interviewed more than two dozen contractors from throughout the United States. We found their answers to be candid and straight to the point. While most of our interview subjects spoke of their great appreciation for the services rental companies offer, they were also quick to point out mistakes rental providers make.

The contractors, which ranged from small, independent contractors with a handful of staff to some of the largest construction firms in the country, each had their own story to tell and their own particular concerns. Yet a number of themes repeated themselves consistently.

What were the pet peeves contractors expressed? Failure on the part of rental companies to try hard enough to find a piece of equipment they need but the rental company didn't have; not delivering or picking equipment up off rent in a timely manner; inconsistency in the service offered at different branches of the same company; lack of effort to really understand the business of the contractor; equipment that is not well-maintained; failure to respect and recognize major customers that do large quantities of business with a particular rental company; not being up-to-date technologically; slow response in case of breakdown; double billing the customer; having to deal with multiple people from the same company; lack of knowledge about the equipment offered; nickel-and-dime excess charges and salesmen who promise more than their companies can deliver.

But there was one theme that almost every contractor mentioned. The one area that really upset them was lack of honesty and reliability, making promises and then not keeping them, and then not communicating when something goes wrong. As many contractors said, they can understand if a rental company can't obtain a particular piece in time. They can understand if a piece of equipment breaks down; as one contractor says, “Construction equipment has a hard life.” But the unforgivable is to promise a piece of equipment will be delivered and then not show up and not communicate. That's the unpardonable sin virtually every contractor referred to as cause for ceasing to do business with a company.

As Sean Saunders of FNF Construction says: “I'm OK with ‘No’. Nobody can do everything. But you'd better communicate with me.” And as John Tausher of Bamco, Middlesex, N.J., adds: “This is a planning business. I may have $300 an hour invested in guys sitting on a jobsite. I need to know that what I'm told is going to happen will happen.”

In the following pages, contractors from around the country tell what they like and what they don't like when it comes to service from rental companies. They make it clear that understanding and communicating with the customer is primary.

Do the hustle

Mike Archer's advice to rental companies: Never give up. A project superintendent for Oliphant Golf Course Construction, based in Waunakee, Wis., Archer wants rental companies to go above and beyond the call of duty, and above all, stresses the need for “service, service, service.”

Like any customer, Archer wants a company who will be good to him, and he wants to know that he's getting the best deal in town. One of his biggest complaints is that rental companies often just give up and that there are very few who will really take the time to make the call to see if they can find the piece of equipment the contractor needs.

“Nothing turns a contractor off more,” he says.

If a company is out of the equipment he needs, he doesn't want to make 10 more phone calls. “I want someone who'll say, ‘I don't have it, but I'll find someone who does,’” he says.

Oliphant Golf is a nationwide company, so Archer says it's important for him to find a rental company that can support him wherever he goes. While he deals with the local salesperson at the site, Archer stresses the importance of consistency with communication throughout the rental company, and the ability of the local contact to communicate easily with the national account salesperson.

Price is important to Archer, and if he feels he's not getting the best rates, that could push him to switch companies. Although he won't drop a company solely based on rates, he wouldn't hesitate if a company doesn't follow through on its word. If a rental center says a piece of equipment will be dropped off on a Monday and it shows up on a Thursday, that's a big problem. “I'll switch in a heartbeat,” he says.

Archer does business with two or three rental companies at a time, and will give up to 80 percent of his business to the company who steps up to the plate for him. “If they're good and they hustle, they're going to get business,” he says.

Although Archer knows what equipment he needs to get his job done, he does rely on the rental salesperson to clue him in on new equipment and advances in technology.
Erin Chapman

Cutting Edge Contractor

When you're a big player, you should be treated as such. That's the expectation of Sean Saunders, director of information systems and purchasing for Tempe, Ariz.-based FNF Construction, the largest highway-heavy construction contractor in Arizona.

“We do about $4 million a year in rental,” Saunders says. “So I expect personalized service. If I'm giving you $1 million a year in business, it's important to me that everybody in that rental company knows who I am and who FNF is. I need you to be responsible 24/7 in service and availability.”

Is it ego? Not at all, he says. “I don't have time,” Saunders simply says. “Now RSC, Sunstate, Empire, Hertz and others, they have my number programmed into their phones. I don't see why you can't have a telephone device that will identify who's calling. Sunstate installed a point-to-point communication system, so I just have to touch one button to talk with my rep.”

Saunders is an information technology specialist who believes IT should be used to enhance efficiency.

“I solve problems with automation,” Saunders says. “It amazes me that companies haven't embraced technology such as Blackberrys and pocket computers. Why not buy a wireless unit, mount it on a metal cable on the jobsite so that at 2 a.m. I can tell my rental company what I want and when I need it?”

Saunders says such technologies are inevitable in the construction industry. “Think back to 1975,” he says. “You didn't have pagers, faxes, mobile phones or the Internet, but you did business. Nobody wanted to adopt those technologies. Today you can't compete without those technologies.”

Saunders has utilized technology to make FNF more efficient. “I have a device on my belt that connects me with every system in our building 24/7,” he says. “In our company, people can look in real time and see their job expenses, immediately, not a month later. Going forward, people who communicate with me 24/7 and give me extra service will get our business.”

Saunders is proactive about developing systems, not just waiting for rental companies to create them. “I'm in charge of every invoice that comes into this system,” he says. “What's on rent, where it's on rent, what the billing cycle is, these are very important to me,” he says. “I'm developing a system here called Middleware. I can log on to this system, so the rental companies' systems — whether it's Hertz' Gold Account, United's UR-Data, RSC Online, Sunstate's Sunstats — integrate with a Web page we created. They sign in on a form with 10 pieces of information that I need. My signature is on file, I don't have to fill out a form every time, I agree to the terms of the rental contract and we do business.”

To Saunders, it's the big picture he's looking for. “If I know electronically that [another contractor] is giving up a tractor on the 14th, I can order it immediately for that day and it can come directly to me without having to be brought back in and then delivered to me.”

Saunders likes the fleet management approach being developed by RSC where they offer to buy a customer's equipment and charge them a monthly fee. “It's very appealing,” he says. “Do I want to keep track of every jackhammer and blade? I've got bigger fish to fry.”

Global positioning systems are a big attraction to Saunders, who says he'll do a lot of business with a company that “GPS-enables all fleet and gives me the ability to go on to a Web site and see where every piece of equipment is.”

Saunders counsels rental companies not to be intimidated by technological development. “People don't realize how easy and rudimentary these technologies are,” he says. “You can slap it together in three months, you can generate more extra business than you dreamed of. Don't hesitate because a computer might cost you a few hundred dollars.”

And when it comes down to daily service, Saunders is as traditional as most contractors. “I'm OK with ‘No,’” he says. “Nobody can do everything. But you better communicate with me. Do what you say you're going to do. I'm wasting my customer's time and money if equipment arrives late.”
Michael Roth

Wanted: Go-getters

The biggest mistakes Guy Gordon sees rental companies make are complacency and the failure to understand the urgency of contractor requests. Gordon, vice president of equipment at Ballwin, Mo.-based Fru-Con Construction, expects quality equipment, service and convenience from rental companies he works with so he's able to complete work on heavy industrial facilities and heavy civil projects, site development and landfills.

Gordon uses about three general rental companies on a regular basis, and two or three lifting and crane rental companies. Though he owns about 60 percent of his equipment and rents 40 percent, Gordon says there are many advantages to renting. “You don't have to get into the risk side of owning,” he says. He also likes the flexibility rental offers — the ability to switch out different size machines and the ability to rent equipment for the short-term. Reduced freight costs are another advantage, and renting can also help with cash flow and financial conditions, he says.

Some — but not all — rental companies really do make an effort to understand the business of the renter. “Typically the ones with nationwide representatives that meet with us regularly tend to understand the business better,” Gordon says. “They take the time to understand the business better than the managers at remote locations.”

Companies with a nationwide presence should have consistent service at all of their locations. Responsiveness, Gordon says, depends on the company, location and sales representative. “One of the things I notice is that each company has strong sales locations and weak sales locations,” he says. “I don't think there's one that's consistent throughout.”

To keep Gordon's business, it's important that a rental company keep high quality, well maintained or better yet — new — equipment to decrease downtime on the jobsite. And in the instance that equipment breaks down, responsiveness is key. “We've switched out equipment at a jobsite due to poor service,” Gordon says.

While online access to rental information isn't yet everyone's top priority, it is important to Gordon, but it's got to be a value-added service to make it worthwhile. “It has to be fairly easy to use and it has to be informative,” he says. “It has to be something us managers can use in order for us to go in and look at it.”
Erin Chapman

Go-To Guy

Relationships are key to the business dynamic between contractors and rental companies.

“Star is our go-to company, much because of the relationship I have with Bob,” says A.J. Smith, president of Everett, Wash.-based Advanced Construction, of his longtime working relationship with Seattle-based Star Rentals and its CEO Bob Kendall. “I've known Bob ever since he started at Star and even before with his previous company.”

The relationship is important, not because Smith and Kendall go bowling on Wednesday or frequent the same bar or church, but because of a business-related understanding that makes it easier for the two men to do business together and to understand the needs of one another's companies.

Smith gives an example of what sometimes happens when that relationship is lacking. “I was rehabbing a pool on a very tight timeframe and I bought an Edco machine from [another rental company],” he recalls. “The on-off switch fell off and I went to the local branch [of that company] and they didn't have one. I asked the branch manager if they could take a switch off another machine and he said ‘no.’ We're paying hourly for labor and I was losing money because I had guys sitting around. They should take that step to take care of the customer. So I went to the local Star branch, 15 minutes away, and they took a switch off another machine to help me out. It all boils down to personalities.”

Smith also likes Star because it is a family-owned company.

“They have a lot of flexibility that the corporate-owned companies don't have,” says Smith. “For example, in billing. We specialize in public works contracting and sometimes we have cash-flow problems because somebody doesn't pay us when they said they would. I just drop a dime to Bob and tell him I can't pay until next week because I haven't been paid yet and he says ‘no problem.’ A lot of the bigger companies will put you on credit hold. There is no flexibility. They have their policies and they have to do it that way.”

Star's small-company flexibility also helps Smith when he wants to buy a piece of equipment he's been renting. “On public works jobs, sometimes [customers] don't spend enough time on plans and specs and budgets. So if a three-month job turns out to be an eight-month job, they allow us to apply the rent toward the purchase after we're a ways into the project when we realize it's going to last longer than expected and that's great.”

Smith, who was in the bridge construction business for 20 years before starting his own company several years ago, says he doesn't usually find the same flexibility with larger companies when it comes to rental-purchase agreements.

Because of Advanced contracts on public works projects, safety and safety documentation is always a critical factor.

“Not only is getting it on time important, but getting equipment maintained to the standard that is required to perform on the project,” he says. “Star, for example, has all the safety bells and whistles. On state projects, OSHA and WISHA [Washington Industrial Safety and Health Act, the state equivalent to OSHA] inspects for safety compliance. So it is really important that the equipment is kept up on standards, and that all the stickers are on, in English.”

Smith says Star Rentals is strong in this area. And if there's an issue, he knows who to call to get it taken care of.
Michael Roth

Beyond the Call

J.R. Williams, director of purchasing at Denier Electric in Cincinnati, expects a rental equipment company to offer a good rate and get product to the jobsite quickly. He also wants the equipment ready to perform — but that's not all.

“We expect a whole other level of service,” Williams says.

Denier Electric has been a commercial electrical contractor for 50 years. Williams says the company generates $30 million to $40 million in sales volume per year. The company specializes in commercial electrical work and voice data cabling and has branches in Cincinnati and Columbus, Ohio.

Denier rents primarily from NationsRent, but uses other rental companies occasionally. Williams says NationsRent's employees pick up the phone quickly, get the equipment out quickly and will move and store scissorlifts Denier owns as well. Williams appreciates these extras and says they enhance the partnership between the two companies.

Familiarity is also important. If there is a problem with a piece of rental equipment, they call the repair department at NationsRent, where they're on a first name basis.

“We deal with the people who work [with the equipment] every day,” Williams says. “We don't have problems with Nations — maybe because of the commitment and bond between the two companies. A give-and-take partnership is most important.”

Williams says he would be interested in Internet services if they were available. For now, NationsRent faxes the company a report once a week of equipment they have out on rent.

“We can't afford to have equipment sitting,” Williams says. “These reports are critical.”

Williams says he is always looking for the lowest rate and after picking a partner, usually won't rent from anyone else. He would leave a rental company over a breakdown in communication, bad rates, lack of flexibility or bad equipment that had a history of breaking down.
Chris Crawford

Just One Call

To Arnie Levin, it's all about the equipment.

Levin, vice president of West St. Louis Glass, has been doing business with rental companies for more than 20 years and rents large aerial equipment. To him, quality and availability of equipment is everything, along with the service that goes along with it.

“When I need a 40- or 80-foot lift and I call up a rental company, I need to deal with people who have it,” says Levin. “I don't want to have to go hunting around. I like dealing with one person.”

Levin recalls that when he first began renting aerial work platforms 20 years ago, he rented from a company that had a large inventory and if that company didn't have what he needed, they would re-rent from somebody else to save him the trouble. When that company stopped supplying him consistently, Levin discontinued his account with them. His current primary provider, St. Louis-based Midwest Aerials & Equipment, is consistently able to provide him with the machines he needs in a timely manner.

“I'm not unreasonable,” Levin says. “I'm in business myself and I know you can't satisfy a customer 100 percent of the time. If I call at 4 p.m. and say ‘I need an 80-footer at 7 a.m.’, I understand there are delays and it may not be possible every time.” But for Levin, coming through a high percentage of the time is good enough.

Levin also knows enough about equipment to know that it breaks down, but he expects his supplier to provide good equipment so that breakdowns are rare rather than chronic.

“If they have excessive breakdowns, they don't have good enough equipment, it's that simple,” he says. “If there is a breakdown, I expect them to be there in a reasonable amount of time and get me running again quickly.”

Levin's company specializes in providing glass on high-rise commercial buildings and although it owns five units, he still rents about 50 percent of the machines he needs.
Michael Roth

Keep Your Word

Like most contractors, Jason Lindley, superintendent at Associated Brigham Contractors in Brigham City, Utah, expects good running equipment, good customer service and fair prices. But more important to Lindley is rental companies sticking to their word.

Lindley changed rental companies once because he found out he was getting gouged on prices.

“My project manager ordered the equipment and after I researched prices, I realized the rental company was charging double what they should have been,” Lindley says. “I found if they think you're not checking prices, [rental companies] will jack the prices up a little.” That's not a problem with Associated Brigham's current rental providers.

On the customer service front, Lindley says sales reps should be knowledgeable about every piece of equipment they rent.

“If I need to dig a 25-foot-deep hole, [a rental rep] should know everything about a piece of equipment that will do the job — like carrying capabilities and digging depth,” Lindley says.

Associated Brigham, which does industrial concrete work, foundations and footings and specializes in the steel mill industry, rents about half of the equipment it uses. Lindley explains that the downside of owning is hauling the equipment. For example, if you're going to be onsite for three to four weeks and need 20 pieces of equipment — Lindley says that you wouldn't be able to justify transportation costs for a month's work. He'd rather rent.
Chris Crawford

Right Place, Right Time

As a purchasing manager for Midstate Mechanical, a mechanical contractor in Phoenix, Bob Lawson expects the obvious from his rental companies: equipment that works.

“Once we request a piece of equipment, we expect it to be on site, on time and in working order,” he says.

Equipment that's in working order and delivered on time is important because broken or late equipment means work is not getting accomplished. Another seemingly obvious request from the contractor: correct invoices and accurate numbers. While it seems like a no-brainer, it's a hassle contractors have to deal with, and while it may get fixed with a simple phone call, it's probably a phone call the contractor would prefer not to make.

Rates are also important to Lawson, although cheaper isn't always better. “We're looking for a competitive price, but not necessarily the cheapest.”

Lawson realizes that customer service may come with a price tag. “Obviously we'd like cheaper rates, but you can't always do that,” he says. “You've always got to pay for service.”

Honesty and integrity will also go a long way in a contractor's book. Lawson's big complaint: “Saying they can get you a piece of equipment on site and it doesn't happen.” It's understandable if a rental company can't meet a contractor request 100 percent of the time. But Lawson advises to be up front about it because contractors want to feel confident that the equipment will be at the jobsite, on time and in working order.

Lawson is one of those on the high-tech side of the split who places high importance on the use of the Internet. With about 80 percent of his equipment being rented, he likes to be able to go online with his primary rental company, Sunstate Equipment, and find out exactly which pieces of equipment he's got on site, the rates, and history of equipment used. “It's quite helpful actually,” he says.

Customer service is important to contractors, and without good customer service, it is difficult to stay with a company, and this includes salesmen's equipment knowledge. “It's very important that they have knowledge to make recommendations,” Lawson says.
Erin Chapman

A Hard Life

For Sukut Construction, when a piece of equipment goes down on the job, tens or hundreds of thousands of dollars may be at stake. A contractor that rents primarily Caterpillar earthmoving equipment such as water trucks, loaders, excavators, scrapers and more, for work on large subdivisions, mass grading, landslide stabilization, golf courses and resorts, highways and roads, landfills, flood and storm water systems, and public works, can face hourly costs on a project well into the tens of thousands of dollars, if not more. So when a piece of rented equipment breaks down on the job, the profits of a job may be at risk. Sukut Construction owns more than 200 pieces of equipment, but on any given day is usually renting 75 to 100 pieces a day. Consistent performance is the essence to everything Sukut does.

“Construction equipment does have a hard life,” says Sukut's general superintendent Tim Smith. “We know equipment breaks down, so how quickly they respond in a breakdown is critical, as is having reliable updated, relatively new equipment.”

Smith does consider price, but it's not the primary factor. “Most of the rental companies that we deal with, their prices are pretty competitive, they're all within a few dollars of each other. It's who has it, and who has equipment that will stay together on the job. We like larger companies generally because they usually have more inventory and ability to respond when problems occur.”

Although Sukut uses a number of rental companies, one of its favorites is Escondido, Calif.-based equipment specialist Red Mountain Machinery for its large fleet, its mechanical expertise and concentration on the heavy equipment area.

Despite the size of Sukut's operation, Smith leans more heavily on personal telephone communication, although he'll occasionally “jump on a Web site and search around for availability, to see if a company carries a certain model or type of equipment.” He points out that many companies don't update their Web sites accurately, which makes it “a waste of time” to visit their sites.

Sukut, based in Santa Ana, Calif., was ranked the No.1 landfill contractor in the United States by Engineering News-Record.
— Michael Roth

Don't Sweat the Small Stuff

Jim Hoessle, director of operations at The Great Lakes Construction Co. in Hinkley, Ohio, wants rental companies to think bigger about the whole contract versus worrying about charging for little problems.

Hoessle doesn't like finding tiny charges on his bill, especially because his company rents so much. He doesn't like rental companies charging extra to add two gallons of fuel, or adding a charge for a missing key or a scratch on a machine. Flexibility in the contractor-rental company relationship is very important to him. Sometimes it might be best to let something slide if doing so might generate more business from a current client. Hoessle says he wouldn't be interested in Internet billing from rental companies because he likes to have a hard copy of the bill in hand to analyze charges.

Great Lakes Construction is a heavy civil contractor. Bridgework accounts for the majority of its business — tearing down and reconstructing or building new bridges. The company also does foundation work, concrete work and shore line work. Approximately 30 percent of the machinery Great Lakes uses is rented, but that percentage changes every day.

Great Lakes rents from about six rental companies in Ohio. Hoessle really appreciates dealing with a single contact — one sales rep at each rental company. The sales rep and contractor build familiarity and trust, which Hoessle considers the most important aspect of their relationship. From that relationship and trust come negotiation on price, ease of renting and good communication of what's needed and what's available.

Hoessle says a common mistake for a salesperson is making a promise they can't keep. For example, saying equipment will be ready on Friday, and it doesn't arrive or it shows up broken.

“I just want a rental company to make it easy,” Hoessle says. “If I call a rep and I need some equipment, I need it fast and functional. That service is huge.”
Chris Crawford

No Double Billing

If Adrian Figer, budget manager for Peabody General Contracting in south Texas, has to pay $7,000 a month for an excavator, “it better be worth it.” Or they won't be doing business with Peabody for long.

“If they send a 300 excavator with 5,000 hours for the same price as I can get a brand new one for, I'm not satisfied with that,” says Figer, who prefers to rent from Caterpillar dealer Holt Rental Services.

And there's no reason why the equipment shouldn't look good, he adds. “We like nice-looking equipment on the job, it makes us look better.”

A relationship is also important to Figer. “I like dealing with one person, I don't want to deal with 10 different people from a company.”

While there are many reasons for concentrated communications, Figer has a major pet peeve that he has experienced from several rental companies — double billing.

“We like straightforward billing,” Figer says. “Clear and easy to understand. We get double bills from many rental companies. They bill the office and the office may not know it's off rent. It might get lost in the system. So they keep billing and you might pay four or five times over.”

Not only does Figer appreciate what he calls exceptional service from Holt, recently Holt began thrilling his workers with air-conditioned skid-steer loaders, a strong boon to productivity in the scorching Texas summers.
Michael Roth

This Time It's Personal

Availability of equipment and quick delivery are the two most important factors in a rental company, according to Denny Burton, owner and president of DL Burton, a general engineering contractor based in Ramona, Calif. “If they give quality equipment in a timely fashion, we'll go back to them,” Burton says.

About 75 percent of the equipment Burton needs is rented and he uses about four to six rental companies on a daily basis to supply all of the equipment to fit his needs. With such a great need for equipment, renting is beneficial because it cuts down on maintenance costs and repair bills for the company.

One of the biggest mistakes Burton sees rental companies make is the failure to get equipment to the customer on time and a failure to pick up the equipment once it's called off rent. Burton says he also sees a lot of billing mistakes, and accuracy in this area should be very important to rental companies.

Burton would like to see lower rates all around, but general service and quality of equipment are of greater importance to him. “If a company would send out an inferior quality of equipment we'd change pretty quick,” he says.

And with the boom of Internet use and online reservation and renting systems, Burton says that some Internet availability is useful to him as a convenience. His pet peeve regarding new technology: automated phone systems that route customers around, making them press one for this, two for that. “I prefer personal contact,” he says.
Erin Chapman

No Room For Storage

To Eddie Wrenn, owner of Gulf State Electrical, Fairhope, Ala., there are a lot of advantages to renting machines he doesn't use every day, such as scissorlifts, boomlifts, forklifts, backhoes and trenchers. But to electrical contractor Wrenn, a frequent customer of Volvo Rents, who owns most of the electrical tools he uses all the time, one of the primary reasons for renting is the cost of storage and maintenance.

“Storage and maintenance are big drawbacks for a small company,” Wrenn says. “On one job recently I needed 12 scissorlifts. I don't have facilities to store so many machines, so I have to rent. Having to do all the upkeep would be very expensive for me. If it weren't for rental companies, I couldn't do business.”

While Wrenn is dependent on rental companies and appreciates their services, he has little patience when they are slow when it comes to repairing and replacing equipment that breaks down on the job. Or with late delivery.

“If you say you'll get me a scissorlift at 7 o'clock and you don't get it there, then I have a bunch of workers standing around and it's double-costing me,” Wrenn says. “If you pay $10 a day less for the rental but you don't get it on time and it's in poor condition, it costs you more.”
Michael Roth

Deliver on Your Promises

The worst thing a rental company can do to Jerry Dalrymple, president of McLaughlin Engineering in Temecula, Calif., is to promise something it can't deliver.

“Some sales people promise too much,” says Dalrymple, whose company owns more than 50 major pieces of construction equipment but still rents a substantial amount. “It's usually less experienced sales people from companies that have high turnover.

“They're trying to get your business and they'll tell you they can get you things they can't deliver. If you don't have it, tell me the truth, or offer to help me find it, but don't make me a promise and then go make 40 phone calls, because I'm very well-connected and I've probably already made those calls.”

McLaughlin Engineering does earthmoving work in subdivisions, road work and site development on mining projects.

Although Dalrymple is not too involved in electronic communication with rental companies, he sees it as something beneficial in the future.

“I can see where it would be a useful tool to access your account,” he says. “Maybe our person didn't write down what day a piece of equipment started on the job, so if I could go online to be able to access my account information, that would be a great service. Now I'll call a salesperson, but if I can go online and look at my open accounts, that might save a step.”
Michael Roth