RERMAG

SEVEN TIPS WORTH SHARPENING

All good advice bears repeating, or at least updating. RER editors recently culled through past articles to uncover tips about everything from electrical safety practices and open house strategies to training employees and going green by implementing environmentally friendly business practices. The results are some useful new ideas for rental businesses to consider.

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  1. Review electrical safety

    It shouldn't come as a shock that electrical tool safety is nothing new, but its importance is still as vital as it was 33 years ago. In a January 1975 RER article titled “How to Set Up (And Use) Your Own Electrical Service Center,” Fred Sotcher, founder and president of Sotcher Measurement wrote, “By taking the time to set up a checklist for each type of tool inventory, you can assure yourself of the greatest profit and a safer, happier customer.

    “Operator safety is of paramount importance, and safety is dependent upon both the operator and the tool,” Sotcher wrote. “A leakage current test and check of ground cord continuity should be done automatically prior to issuing any tool.”

    Indeed that advice still holds up today. According to a report by the Itasca, Ill.-based National Safety Council, OSHA's list of 10 Most Frequently Cited Violations of 2007 included Electrical Wiring at No. 7 with 3,192 total violations in the period from Oct. 1, 2006 to Sept. 30, 2007, and Electrical at No. 10 with 2,519 total violations.

    With nearly 6,000 electrical-related violations reported just last year alone, rental companies and their employees can regularly benefit from an update of some general electrical safety tips.

    The good news, according to Sotcher, who is now retired but still somewhat active in his former company Sotcher Measurement, now run by his son Marc, is that manufacturers offer better and safer electric tools to the industry than they did 30 years ago. The bad news, he says, is that the rental industry still has a relatively high accident rate with rented electrical tools, and liability problems for rental companies have become more acute and more extensive, the combination of which results in higher insurance rates.

    The solution for the rental company is as simple as committing to a more careful examination of electrical tools after each rental.

    “A rigid policy of testing every tool between rentals not only weeds out the defective ones, but provides you with the best defense you can have,” Sotcher wrote. “With such a policy you can prove that the tool was safe at the time of rental. The key is to be sure that you are making a reasonable investigation for safety.”

    There are a number of different electrical testing devices available that are designed for such a purpose. The most basic testing device, according to Sotcher, is a product engineered to test any electrical product for safety. It ensures that the user won't feel any electrical sensation when using the product.

    In addition, there are devices designed specifically to test the integrity of portable generators; products used to test extension cords and wiring; products to check the winding in a field motor; diagnostic products designed to maintain and check the safety of all the products in a rental inventory; and multi-meters, which are capable of measuring electrical phenomenon such as current and resistance.

    A hipot tester is a device designed to test the electrical insulation in a wired assembly. It works by putting a significantly higher-than-normal voltage across the insulated parts of the tool to verify it has a good enough barrier to protect the operator during use. Also, every rental store should have an AC leakage current tester to verify that the tool is electrically safe, Sotcher says. And the best time to conduct the test is after the tool comes back from a rental. At the same time, Sotcher recommends that the rental store do a careful visual inspection of the tool to check for damage and to ensure that guards, safety devices and all manufacturer's warning labels are intact.

    The biggest item to check for during the visual inspection, Sotcher says, and the one responsible for more fatalities than any other electrical condition in the tool, is the strain relief — the plastic device that captures the power cord as it exits the tool. If the strain relief becomes damaged or missing and the cord is pulled from the tool, it puts a strain on the electrical components inside the tool, creating a potentially dangerous electrical problem.

    “I've served as an expert witness in court in electrocution cases, and the strain relief is often overlooked during a visual inspection,” Sotcher says. A good step toward preventing accidents is for rental store managers and owners to hold regular safety meetings to heighten the awareness of electrical tool safety among employees.

    The last significant thing that a rental store needs to do for its own liability and the safety of its customers is to maintain a record-keeping system.

    “In the event of an electrical accident, you need to have some documentation that you did a check of the tool before you rent it to someone,” Sotcher says. “The most common way is a service tag attached to the equipment that includes the tests that are performed and the name and date of the person who did the test.”

    Maintaining a consistent record-keeping system is the key, according to Sotcher, but this kind of vigilance provides very good liability protection and also encourages employees to do the electrical inspection on a regular basis because his or her name on the tag leaves no question of accountability.

    “Such a system ensures that the tools in the rental center are safer in the first place,” Sotcher says. “No tool goes back in inventory without being inspected. If that's not followed religiously, then you've put a big chink in your armor of liability protection.”

  2. Host an open house

    A rental center open house brings to mind polished waxed floors, shiny new equipment and new owners and store managers who are energized and ready to take their new customers by storm, right? Well that's one scenario where an open house can be a smart marketing and business initiative, but a rental store doesn't have to be newly opened to throw a party for its customers and build a strong reputation for itself.

    For instance, Park Ridge, N.J.-based Hertz Equipment Rental Corp., which added 24 general rental locations in 2006 as part of its planned expansion in that area of its rental business, spent much of 2007 hosting grand re-opening events for its customers. HERC took the opportunity to showcase each facility's showroom and newly expanded product line, and also organized vendor demonstrations with literature on-hand.

    To satisfy customer appetites, HERC offered free catered barbecue lunches and promotional giveaways, held ribbon-cutting ceremonies attended by corporate HERC management as well as local dignitaries and politicians, and often invited a local radio station to broadcast live from the event.

    Pendleton, Ore.-based West's Rentals and Sales celebrated its 20th birthday last June with an open house, serving coffee and donuts in the morning and a hamburger barbecue in the afternoon.

    Halton Rental, a Caterpillar dealer for Northwest Oregon and Southwest Washington with headquarters in Portland, Ore., celebrated the opening of its sixth facility in East Portland last year with an open house event. The company offered tours of the rental store, its used parts area and the location's machining and fabrication shop.

Kiely Equipment Co. and Astec Underground North Atlantic, both headquartered in Long Branch, N.J., teamed up last August to host their first annual joint open house event. Current and potential customers of both companies, as well as vendors, were invited to attend.

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“We are very pleased with the success of our two companies and wanted to celebrate with those who have helped make our current accomplishments possible,” said John Kiely, president of both Astec Underground north Atlantic and Kiely Equipment.

Open House TIPS

The companies displayed a wide variety of equipment at the event and served a barbecue dinner. Promotional items such as hats and T-shirts were given to guests, and a business card raffle was held.

Port Orange, Fla.-based Thompson Pump is another company who sees the benefit in hosting open house events — for a variety of situations. In 2005 the company hosted an open house at its newly relocated Kansas City, Kan., branch, which serves Kansas, Missouri, Iowa and Nebraska, as well as distributors throughout the entire Midwest region. More recently, the company hosted an open house at its newly established branch in Pooler, Ga., near Savannah. Beyond the free barbecue lunch and facility tours at these events, the company also offered customers the opportunity to win a free one-week pump rental.

And “an opportunity” is exactly how Thompson Pumps marketing coordinator and technical writer Kirsten Peterson looks at open house events. For Thompson, open houses offer personal face-to-face interaction with customers and the opportunity to explain the company's products and applications in more depth. Additionally, open houses give Thompson Pump employees the opportunity to compile customer demographics and analytics for their own knowledge and use.

While there are many reasons to host an open house to promote the business and services of a rental company, be sure to offer substance beyond the free barbecue lunch and custom logo drink koozie. According to Peterson, the rental business always comes back to personal relationships, and an open house is an ideal opportunity to further develop and solidify those relationships.

Asheville, N.C.-based Volvo Rents often hosts open house events when a new franchise business opens. Nick Mavrick, vice president of marketing for Volvo Rents, suggests that it's not the number of people who show up to the event, but the duration of time they spend talking to and getting to know the owners of the new business. Create an environment where customers can relax and will want to stick around visiting with the owners as well as each other, he suggests. In addition, consider going above and beyond what's expected by serving really good food such as steaks for example.

“An open house, if it's done right, is a celebration between the customers and the business owner,” Mavrick says. “It's an opportunity to really thank your customers.”

  1. Implement dispatching software

    In a 1975 issue of RER, Don O'Neal, owner of A-1 Rental Service, Fort Worth, Texas, who later became president of NationsRent, discusses how two-way radios eliminate a lot of unnecessary trips, making them a useful tool for rental companies. While a two-way radio was considered advanced technology in 1975, today's modern dispatch systems are far more sophisticated and offer far greater benefits.

    One company that offers dispatching logistics software, Ontario, Calif.-based Dispatching Solutions, stands by the principle that rental companies should be focused on providing more value to their clients — whether it be better service or any number of factors that differentiate it from the competition — not on moving people and equipment around.

    An effective dispatching solution that can really propel a rental company to the current era of technology and the positive business impact it can have is one that combines GPS technology with actual equipment loads and service jobs in the field. For example, does a GPS map that shows the location of the closest service technician to a jobsite even matter if the service tech doesn't have the right equipment on the truck, the right training to do the job or the right parts to do the job?

    “There are simply too many details for overloaded dispatchers/schedulers to keep in their brains to make the best decisions when the customer is on the phone,” says Doug Mitchell, vice president of business development for Dispatching Solutions. “They need a solution that simplifies the process and lets them know the consequences of their actions in real, monetary terms.”

    The DSI solution is designed to use very specific data points that are collected on each specific load, equipment type and driver to allow one-click access to decision-making information for dispatchers.

    “We have a find-nearest-truck function in our system that considers current direction, time left on duty before overtime, truck capabilities, driver capabilities and truck capacity,” says Mitchell. “This provides for true one-click decision making since the normal ‘who's-closet-on-the-map’ decision may be a huge waste of time and money.”

    Tony Nicoletti, national sales manager for San Francisco-based DPL America, offers another example of how dispatching technology can benefit rental companies. For instance, if a piece of equipment is called off-rent and set to be picked up, instead of bringing it all the way back to the rental yard for processing and maintenance it can be picked up by the nearest technician, then re-routed to the next jobsite for maintenance checks and delivery.

    “Customers see efficiency gains through service,” says Nicoletti. “Particularly on equipment — whether it's done in the field or whether it's done when it gets back to the yard.”

    Today's dispatching software easily trumps an old two-way radio.

  2. Train employees

    Advancing an employee's knowledge of work practices and equipment training is a part of most every rental company's to-do list nowadays and continues to be an important trend in sustaining the rental industry. However, that common practice wasn't always seen as a great priority.

    In an October 1993 RER article titled “Inside Job: Rental Centers Train Their Own to Compete,” Aaron Smith, then-managing editor of RER wrote, “In an atmosphere of fierce competition and often diminishing profits, many successful rental centers are making time to make better employees.

    “Employee training is grabbing the industry's attention, and for good reason,” Smith wrote. “The bottom line has never been more directly linked to the performance and efficiency of the work force. As a result, informal trial-and-error approaches to worker training are being supplanted by formal, step-by-step programs and more sophisticated techniques.”

    Smith also went on to say that “they can't just wing it in the '90s,” and rental companies know they can't just wing it today either.

    Bob Kendall, president of Seattle, Wash.-based Star Rentals, says that the company has gone from not having any formal training two decades ago to now having specific training for all job descriptions.

    “Formal training is the best way to standardize on every process that takes place every single day in any rental operation,” says Kendall. “It brings efficiency, continuity and consistency to everything that you do.”

Star Rentals, No. 31 on the RER 100, has recently embarked on a leadership and mentoring training program that will span 18 months and involve 26 key managers. The company also launched its Star University training program. “Every employee from drivers, mechanics, sales coordinators, etc. now experiences a far more expanded orientation period than before.”

Midwest Aerials & Equipment, St. Louis, Mo., also holds safety as a high priority. The company “takes the time up front before an employee starts their assigned job,” says Dan Martino, director of operations for Midwest Aerials & Equipment.

All of the training is completed first, then the documentation and sign offs are done before the employee sets foot on any piece of equipment. “No training, no equipment,” Martino says.

Both Midwest Aerials & Equipment, No. 77 on the RER 100, and Star Rentals prefer on-the-job training that is enhanced by a classroom curriculum.

For rental centers in 1993, “the will to train [was] limited by obstacles like time and money,” wrote Smith. And while training employees was seen as a cost to rental companies, it is now seen as one that pays off in the long run by strengthening an employee's wealth within the company and reducing on-the-job accidents.

  • Go green

    While it may not be easy being green, it is definitely the right thing to do. And you can't go anywhere without seeing some sort of ‘green’ encouraging reminder such as a recycling bin next to a trash can or re-useable grocery bags at the supermarket. The trend of cleaning up the environment has entered every aspect of daily life and it is not going away anytime soon.

    “Everyone is talking about green business practices today,” says Kevin Groman senior vice president, general counsel and corporate secretary for RSC Equipment Rental, Scottsdale, Ariz. “But you need substance to have creditability.” What the mainstream of rental considers green, RSC, No. 3 on the RER 100, has already implemented as best practices for its business. And the company has invested heavily in the technology and processes to facilitate the reduction of raw materials to do business and reduce fuel consumption to improve efficiencies.

    The concept of going green has obviously been around for many years, and RER previously covered environmental topics in its Green Themes columns by Michael Roth, RER editor. In the March 1993 RER article titled “The Power of Green Marketing,” Roth wrote that “amendments to the Clean Air Act passed in 1990, will require manufacturers to label all products that contain ozone-depleting chemicals (ODCs) by May 15 of [1993],” and that “manufacturers are taking whatever steps they can to eliminate ODCs from their own manufacturing processes.” Today government agencies, such as the EPA, are continuing to make strides to clean up the environment through regulations on engine emissions that are designed to improve air quality.

    “The rental industry has a huge opportunity with the current focus on air quality,” says Groman. “A well-maintained diesel engine can last literally for decades. But many construction equipment engines manufactured today emit up to 50-percent fewer emissions than comparable models sold in 2000. With the high cost of equipment replacement, there's a big incentive for contractors to rent new equipment rather than buy and have to replace their own equipment. It can be very expensive for a contractor to replace the diesel engines in their heavy construction equipment. Renting new equipment proves to be a better option that offsets the bottom line.”

    Keeping up with the latest emissions regulations is not only necessary by law, but it keeps companies competitive for attracting business. By adopting environmentally friendly processes as best practices, rental companies provide ways to pass on the savings to customers and to run better businesses.

    “Rental is a young industry where there are a lot of possibilities for innovation, which is the only way we can differentiate ourselves from our competition,” says Groman. “To achieve success we need to execute very well on the service commitment, but also come up with new, innovative ways of providing value in terms of reliability, availability, safety, timeliness, convenience, etc., that all translates into a lower total cost for the customer. With the added component of establishing green practices to better serve our customer — the possibilities are endless.”

    Most people in general want to do the right thing. Green practices make sense from both an environmental and economical standpoint.

  • Better the community

    Giving back to the community and being a stand-up citizen are not only things to strive for in daily life, but in business as well. Taking an active part in bettering the community around you is a good business practice because it strengthens public image and also improves the quality of life of those less fortunate.

    In the February 1993 RER article titled “100 Ideas to Help Improve Your Rental Center,” by Christopher Fletcher, Michael Roth and Marc Birenbaum, all of RER, tip No. 19 is to keep active in the community. The article suggested that “rental centers always need to promote the rental concept and, like any other business, keep their names visible” in a positive way. The writers went on to say that “rental centers can promote community goodwill by donating the use of equipment for a project, such as a local school cleanup.”

    According to J.C. Mas, chairman of Miami, Fla.-based Neff Rental, “Neff has always felt it important to become an active and contributing corporate citizen to the communities it operates in. We feel that by participating and giving back to the community, we are helping to nurture and build our end markets and those who make up our highly regarded customer base.”

    One way in particular that Neff Rentals contributes to the community is through organizing a charity event that raises funds for ALS research in South Florida where the company is headquartered.

    “This event brings together our vendors, customers and even competitors in a great industry and community to try and eradicate a horrible disease,” says Mas. “Our work in organizing this event has helped endow a chair at the University of Miami for continued work on ALS research.”

    Neff Rentals, No. 8 on the RER 100, not only looks out for the surrounding community but also the community of its employees. “On a more individual basis, we work with our team members when they are faced with difficult situations in their lives to assure that they have support from the Neff family in their times of need,” says Mas.

    The rental community as a whole also looks out for each other. When Hurricane Katrina struck the Gulf Coast in 2005, countless manufacturers and rental companies sent help in the way of financial aid, as well as equipment and manpower to help the people of the Gulf Coast region get back on their feet and clear away the destruction caused by that natural disaster.

    Neff Rentals is thinking of future generations in its community efforts. “In addition to all of the community activities we are involved in, we also make it a priority to work on developing young men and women into the future leaders of our industry,” says Mas. “We allocate a significant amount of time and resources into training leadership skills which are, in our opinion, inclusive of becoming a contributing member to our society.”

    Giving back to the community is not completely selfless, because the positive impact of donating time and money can give your business an added bonus with future and current customers. “When you are perceived as a pillar of your community that helps address its needs, you will have the added benefit of having that community think of you when they are looking to meet their equipment needs,” says Mas.

  • Buy and sell online

    The advent of the Internet and computer technology has not only brought a wealth of shared information, but has completely transformed the way rental businesses are run. In the past, if a rental company needed to unload a piece of equipment that was past its prime, the equipment would either be sold to a customer or taken to a local or regional live auction. The Internet in all its glory has allowed companies to design another option — the online auction.

    IronPlanet is one such online auction company. “IronPlanet's online auctions continue to gain significant traction in the rental industry and have become an effective fleet disposition tool, allowing rental companies to sell equipment quicker with better price realizations,” says Felix Rodriguez, national accounts manager of IronPlanet.

    The last decade has given way to a dramatic change in customer perception in regard to the level of trust afforded to purchasing anything online. This includes the level of trust given to online auctions. Buyers and sellers view the Internet as a powerful source of information where they can find virtually anything, including used equipment. But rental companies need to make sure that the online auction company they are doing business with is a reputable one.

    Auction bidders that feel more comfortable checking out the goods before purchasing a piece of equipment online can do so with Ritchie Bros. Auctioneers online bidding service called rbauctionBid-Live, located at www.rbauction.com. “[Clients] can go to the [physical] auction site, examine the equipment before the auction, go back to their office or store, and take 10 minutes out of their schedule on auction day to bid on the item,” says Denis Prevost, vice president - national accounts division for Ritchie Bros. “It's a very convenient way to purchase equipment, and because we're a global company, they have access to equipment that is being sold at any of our 37 auction sites around the world.”

    Both Ritchie Bros. and IronPlanet offer key elements of service to buyers and sellers to garner a trusted reputation.

    Ritchie Bros. offers sellers the chance to refurbish equipment before auction day to increase the resale value of the machine, thanks to the company's permanent auction sites. “Many rental companies are finding that a small investment in refurbishing will significantly increase the amount of money an item sells for on auction day,” says Prevost.

    IronPlanet provides detailed inspection reports to interested buyers for free, including selected wear-related measurements and oil/fluid samples for lab analysis, when appropriate. The company also offers Ironclad Assurance, which guarantees that equipment is in the condition listed.

    Online equipment auctions are geared towards making the process of buying and selling easy on both participating parties. Because the online auctions are held more frequently, they represent a perpetual fleet management tool for rental companies, giving them far greater control of the fleet disposition process. The auctions also afford the ability to reach beyond the local/regional buyers and take advantage of the global marketplace.

  • Homeowner Business

    With the new-housing market in a current slump, rental companies may look for homeowners seeking to remodel as a good source of business. Although there aren't many new trends in marketing to the homeowner renter, national, regional and local rental companies that suddenly want to reach out to homeowners during this construction downturn are having to compete with the familiar brand of Home Depot rental centers that get a portion of the business.

    Mark Clawson, president and CEO of Diamond Rental, Salt Lake City, says that it is important to make the experience of coming into your store a welcoming and pleasant one for homeowners.

    “It is sometimes hard to put yourself on the other side of the counter,” says Clawson. “Customer service is most of the game, having the equipment they need in good order, is the other part.”

    In a July 1993 RER article titled “Lending a Hand: 36 Tips to Improve Your Homeowner Business,” written by Michael Roth, Ken Jorgenson, Michelle Nolin and Christopher Fletcher, the first 10 tips all relate to customer service.

    In tip No. 6: “Understand your customers' motivations,” the writers say that it can help if you understand some of the reasons people take on DIY projects. “According to Ray Sturgess, then-director human resources for Mississauga, Ont.-based Stephenson's Rent-All, ‘there are five essential reasons homeowners rent equipment: utility; saving time or money; protection and security; pride and prestige; and pleasure. Understanding these processes helps personnel to know how to satisfy the customer's needs.’”

    Diamond Rental, No. 74 on the RER 100, also wants to maintain a presence in the “homeowner mind” with direct mail and advertising.

    In tip No. 18: “Direct mail can return more than a coupon,” of the 1993 article, the writers discuss how direct mail let the public know businesses were still operating and allowed homeowners to save a few bucks too. “Chuck Durand of Durand's Rent-All in Rochester, N.Y., says his company has benefited from sending direct-mail postcards to targeted zip codes, offering a $5 discount on any rental of $25 or more,” the article said.

    As for the future of homeowner rentals, Clawson says that every market evolves. “Homeowners can't get mid-size equipment at a home center, sometimes they can't get very good service either. They can't get a friendly face at a contractor-focused national center, but they can find all of those things at our company.”

  • Computer Technology

    Is it any wonder that as soon as you get used to the latest computer technology, a new and improved version software program is announced? While most rental companies either have their own IT departments or outsource computer technology, there are still decisions to be made about when is the right time to upgrade and what is to be done with old computer equipment.

    “Just as a customer or contractor would outsource their equipment rental needs to a specialist at an equipment rental company, we do the same thing [with computer software],” says Nick Mavrick, vice president of marketing for Volvo Rents. “In fiscal '08, we'll be replacing our rental management system with a system that we license from RentalResult and that will be our rental management system.”

    Because Volvo Rents is a subsidiary of Volvo Group, the infrastructure, in terms of systems, backup, leased data lines and servers, is housed with Volvo Information Technology (IT). This specialist department is able to continually keep the storage, data storage and security on the cutting edge.

    “That model works because you can separate the software from the infrastructure, which I highly would recommend,” says Mavrick. “When you are able to separate the two, you can do continuous software improvements as you see fit.”

    Once a computer has run its course and is no longer entirely up-to-date but still in working order, there are a couple ways to make sure it doesn't just end up in a landfill. “After we've erased the data from the hardware, we do offer to sell [computers] to our employees at highly discounted prices,” says Mavrick. Rental companies can also donate computers to various charity organizations because even though the hardware may not be useful in a business sense anymore, it can still be a viable piece of equipment for education or personal use to someone in the community.

  • For more tips visit www.rermag.com.

    The following tips are reprinted in part from “Anatomy of an Open House,” written by then-RER managing editor Christopher Fletcher for the February 1992 issue of RER. Fletcher profiled his visit to the grand opening event held at Taylor Rental Center in Carlisle, Pa. Business partners Chuck Carlson and Matt Waters described the keys they found to hosting a successful open house.

    • Plan ahead. The operators of Taylor Rental began coming up with ideas three months before the event. “That might not have been enough time, it seemed,” says Waters. “Things started to snowball the last week before the grand opening. Luckily, we were organized ahead of time.”

    • Set goals. There should be a purpose for the open house, according to Carlson. “In our case, obviously, it was to introduce customers to a new business,” he says. “But we had to look at what we wanted to accomplish. Should we try to get everyone off the street or just certain key accounts? There probably wouldn't be much benefit from targeting just homeowners.”

    • Print and send out invitations. And make sure they go out in a timely fashion.

    • Promote the event. Carlson and Waters advertised on the radio and in a weekly newspaper.

    • Don't skimp. “Plan as nice an event as possible,” Carlson says. “It will pay off in the end.”

    Waters agrees, adding: “Even after our grand opening, people were talking about it. … people who weren't even there. They'd say, ‘Hey, I heard you had quite a get-together over there.’”

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