Diversify, Survive and Prosper

Diversify, Survive and Prosper

Building a network around the state, diversifying during the recession, and growing into industrial markets have helped Pioneer live up to its name.

Nobody really knew they were coming. They started quietly in small towns around the state. Pioneer Equipment Rental & Supply grew with an almost guerilla-like strategy, working in the smaller markets such as Ponca City, Shawnee and Stillwater, towns where the major rental companies were less effective because they were located two or three hours away from their major facilities.

Pioneer developed relationships with local contractors, building a reputation for reliability and quick decision-making, willing to extend itself in service and accommodate customers by getting them what they needed. As they spread out and built more branches, Pioneer won more customers by being able to take care of contractors who worked in different parts of the state. Gradually Pioneer became an attractive option for local as well as out-of-state contractors who often did business in multiple Oklahoma locations.

It's been a bit more than a dozen years now, but clearly the dominant rental player in the oil- and energy-rich state of Oklahoma is Pioneer. Owners John Redwine and his father Larry might not have expected it, but that's the way it has evolved. After building a network of high-functioning profitable efficient rental centers in small towns, Pioneer established branches in the state's urban centers, Oklahoma City and Tulsa.

“We liked the smaller markets and we thought with multiple locations we could bring a lot more inventory to smaller markets than you could with single locations,” says John. “For instance, 120-foot booms, dozers, big excavators as well as homeowner-type equipment. We felt we could limit the competition from the national chains because we could offer the same products and be a lot closer. And because my dad had started in smaller towns, we knew what would rent and what the possibilities were and were comfortable there. A lot of contractors out of Oklahoma City and Tulsa traveled to work in the smaller markets and had accounts with us, so eventually we followed them into the larger cities to work on certain jobs.”

Long before the founding of Pioneer, rental was in the Redwine blood. Larry Redwine spent years in the business, having acquired a Time Rentals franchise back in 1976. Larry changed the name to U-Rent and operated the business until he sold it to RentX in 1996. John had always shown an interest in the rental business, working there during his teenage years.

Both John and Larry went to work for RentX, John as assistant area manager, where he helped start a couple of startup branches, hiring and training staff. In 1998, John left RentX and acquired a small independent rental business McGee's Rentals in Ponca City, calling it Pioneer. In 1999, Larry acquired a small rental company in Shawnee, Okla., and opened a Pioneer branch.

Over the next few years, John expanded to Lawton, Okla., and partnered with Larry on branches in Stillwater, Okla., and Denton, Texas. Larry opened branches in Chickasha and Newcastle, Okla. They worked together at times and bounced ideas off each other, but had seven separate companies between the two of them.

Eventually the need to have a united image for customers and the need to develop a financial structure led to a merger. Lending institutions, particularly, found the company structure confusing.

“We had it under every name, John Redwine dba, Pioneer Equipment Rental, some would be under a personal name, a business name, each others' business names,” says John. “It was an administrative nightmare with the different names we had. We could generally get credit for a $20,000 loan here, a $30,000 loan there, a $50,000 loan here, but we needed larger credit. Also customers that did business with different branches would receive different invoices.”

The separate companies merged in 2005 and began the process of developing a cohesive structure, working on developing processes to tie together the branches.

John and Larry work together in a complementary way, with John essentially acting as CEO running the business every day.

“I don't get involved in the day-to-day operations,” says Larry. “But on bigger decisions, we talk all the time. I get more involved on the sales end. We make a good pair; I have more experience and John has a lot of new ideas.”

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“When we open new branches, he heads that up as far as negotiating contracts for the property and things like that,” adds John. “That way I don't have to take my focus off of running the business.” Larry also specializes in overseeing the physical layout of new facilities, and supervised the build-out of more than one of the branches.

When the recession hit around 2007, diversity helped Pioneer — it did a certain amount of cash homeowner business, merchandise sales, it made an effort to move into new equipment sales becoming a Terex dealer, and it began to develop a presence in the industrial market. Having its fingers in many pies lessened Pioneer's dependence on the construction market.

The sale of merchandise is more of a complementary item but it helps Pioneer take care of the customer with a full offering. “I'd say we play in it rather than make a ton of money in it,” says John. “But it definitely serves the customer, and makes us more of a one-stop shop.”

John hired his cousin Mark, a former schoolteacher and coach, to help the company's efforts to sell new equipment. One of Mark's stronger attributes as a salesman, he feels, is lack of experience in sales. Customers, sensing that he's not just trying to sell them, seem to appreciate his sincerity.

“I love what I'm doing,” says Mark. “I'm not a salesman. I am in sales, but I'm not a salesman. I explain about the equipment, try to figure out if it's a good fit for them and if it's a good fit, we'll make it happen.”

The company also grew by being willing to make quick decisions and buy items their customers needed.

“If the customer wants a certain type of utility vehicle, if they want a Polaris, if they want a Kubota, if they want this option on it, we'll go make it happen,” says John.

“With larger equipment, such as bigger excavators and generators, there's a lot of that.”

“For refineries, a lot of times they want half-ton pickups,” adds Larry. “We even bought school buses, which they rent to take people in and out of the plant.” The buses are still often rented for turnarounds and other events.

“We work on budgets, but on capital expenditures, we don't lock ourselves in to an exact amount,” says John. “We like to buy for the customer when it's a longer term rental, but usually we try to get the item bought before we even finish the conversation. Sign on the contract and hope it works out. Usually it does, and that way we grow the fleet.”

from firecrackers to rental

John Redwine has five brothers and sisters, but was the only one to get into the rental business. He had an entrepreneurial bent and a feel for the rental business.

“I had my own firecracker stand when I was 15,” John says. “It didn't work out so well, there were a lot of hot days, and it was difficult to keep fireworks out there. Everybody was driving to the cheerleaders' firecracker stand and I was standing out there by myself.”

John recalls various other business ventures including selling pigs and brush-hogging when he was in high school. “I got like $22 an hour which was a bunch of money back then, but it was hot. After 20 hours I was really thinking I made serious money until my dad handed me the rental bill and made me pay him for the rental of the tractor,” he laughs. “He said ‘We'd have had it rented if you wouldn't have had it’ so I had to pay him. But that was a good lesson too. At least he gave me a discount.”

John studied business and accounting in college and while attending classes at MidAmerica Nazarene University, in Olathe, Kan., took notice of Center Rentals, which had a branch in the city. Center, a Denver-based rental company that was acquired in the late '90s, was one of the most evolved rental companies of its era in terms of operations and systems, and Redwine observed and studied its methods.

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find the best practice

One of the keys to Pioneer's growth was John's ability to attract good people, developing good managers from within the system and recruiting from outside.

One of the major hires was David Manning, the company's general manager since 2006.

Manning, son of former ARA president and highly respected rental business owner Hotch Manning, has an impressive industry resume in his own right. Manning worked from 1986 through 1997 for his dad's A-1 Rentals, a multi-location rental company based in Las Cruces, N.M. Manning started as a driver, was a branch manager, worked in accounting and did just about everything for A-1.

After A-1 was acquired by RentX, Manning worked for that company for a couple of years as area manager, which is where he got to know John Redwine. Manning went on to work for Sunstate Equipment for seven years, the Phoenix-based multi-state rental company, one of the rental industry's most admired companies for its systems and efficiencies. Manning served as metro operations manager of the Dallas/Ft. Worth metroplex area for Sunstate from 1999 through 2006.

Manning's primary role with Pioneer is to support the branch managers and the efforts of the branches. “One thing that we try to instill in all our people is that we don't want to be outserviced,” says Manning. “Basically everybody in the rental business is renting the same equipment to sometimes the same people. The only thing that can set you apart is your people and the way you service your customers. In every meeting that we have, we talk about how we can improve the end product that we provide our customers.”

On the day RER visited Pioneer, Manning was working with industrial accounts manager Mark Denny “trying to streamline our flow through the shop so we can get the equipment off the jobsite, off the truck, through the shop, back on the ready line and to the customer in the most efficient productive way. I believe that works, trying to run off the ready line, not off the service line.”

Manning got his education in the concept during his time at Sunstate, with its ‘The Plane is Leaving’ slogan learned from Southwest Airlines. “If you can turn it faster, then maybe instead of using three planes to cover a route, maybe you can cover it with two and save that money for something else,” he explains.

Pioneer's philosophy is always that systems are a process, a never-ending quest to improve and find the best way to do things. “We try to take best practices and we're fortunate enough to have people that come from different backgrounds, such as myself and Mark and some of our other managers. All of our managers have certain things that they're good at so you take those things, put them all together, discuss them around this table, come up with our best practice,” he says. That becomes the way of doing things until they come up with something better.

Much of Manning's role is to take these best practices and make sure they are done the same way at all the branches. “We look at each process from the way we write a contract to the way we answer the phone, just try to constantly streamline that and make it better,” says Manning. “And make it more consistent so with 11 locations if you call Ponca City or if you call Stillwater or you call Denton, Texas, you get the same treatment. You're talking to Pioneer Equipment Rental, you're not talking to a certain branch. You're going to get treated the same way with the same quality of service, the same quality of equipment at all our locations. We want it to be a seamless transaction for the customer.”

Manning is a systems implementer but it is his ability to listen and bring people together that makes things work. “When we talk about maintenance issues we always bring in our regional service managers and some senior techs,” Manning says. “It would be easy for me as a manager to say ‘This is the way we're going to do that’ but I don't turn wrenches every day so maybe what I think is the best way is maybe not the best way. Once we discuss and figure out [and people say] ‘That does work, but here's what I found is a better way’ you take all of that and 10 people are smarter than five, you take all that and weigh it in. Then we come to an agreement.”

Traveling between the branches as much as he does — and Manning put more than 50,000 miles on his red Pioneer truck in the past year — Manning works hard at instilling brand identification in the whole company, a vision that individual workers and branches are part of something larger.

“We want them to be proud of their location for sure, but we also want them to realize this is bigger than just them,” Manning says. “What you do 300 miles away from here matters. That customer is travelling, especially nowadays. We've got customers from every state in the nation probably working in Oklahoma. And they may be in Ponca City this month and in Durant, Okla., next month, four hours away. Well, if they had a bad experience here, they're probably not going to deal with the shop there. We pass that along. We ask the customer, ‘Where are you going next? Hey we got a branch there.’ Five years ago we were seven stores, now we're 11.”

The growing company's cohesion and interdependence, as customers increasingly worked with Pioneer on a statewide level, enabled the company to expand by opening two branches during the recession even as most rental companies were contracting.

“We were not geniuses by any means, but we had processes in place,” Manning says. With the company not over-fleeted but having equipment it could move with trained people ready to step in and build it, “we were able to take advantage of that and get in at the right time, and those became profitable branches in a lot less than the normal ramp-up time. People will tell you, ‘you're not going to be profitable in the first year.’ Well both of those branches were profitable probably in the first six months.”

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not to be outserviced

When it comes to service, Pioneer puts a lot of emphasis on the performance and capability of its service technicians. The company has more than 30 service technicians, and regularly sends mechanics to training schools provided by manufacturers as well as having manufacturers conduct training for Pioneer mechanics on site or in local vocational training facilities. “We want to have the most current-trained technicians,” says John.

The company has more than one mobile service truck per location and area service managers that oversee several locations and lend their hand where necessary. It has developed several experts who specialize in particular areas such as a boom expert, a hydraulics expert and a transmission expert.

“For example, in one case recently, one transmission would have cost us $4,500 to fix if we had sent it out and we'd have had to send it away for six weeks,” says Don Heidlage, Pioneer area service manager, who was the first employee hired by Redwine when he founded the company in 1998. “Instead, we were able to fix it in a week and it only cost us $1,000.”

Pioneer also believes in training its people in a variety of areas. “We brought in trainers to talk to our sales coordinators and outside salesmen,” Redwine says. “We brought in an expert who is well known in the rental industry and did a session on customer service. We trained our drivers as well with sales training. I always tell drivers you're kind of like an outside salesman out there; you're the face of the company.”

missing links

With a dozen outside salesmen, Pioneer has always seen the importance of using outside sales staff to market the company and develop the market. Sales efforts have proven especially important in recent years as the company responded to the recession by growing its presence in Oklahoma's burgeoning industrial market, which has been fueled by developments in the oil industry as well as wind and solar energy and other industries. One of the state's largest refineries, the Conoco Phillips refinery, is located right across the street from Pioneer's Ponca City headquarters.

To beef up the company's industrial efforts, Pioneer recently hired a man who had previously operated an onsite rental department in that very refinery, Mark Denny, as industrial accounts manager. Denny, who has years of experience in the world of refineries as well as waste management and environmental industries, has been helping to grow customer relationships, especially with industrial facilities.

One of the first things Denny looked at was Pioneer's overall level of communication with its customers. He felt it necessary to examine what he considers the “missing links” in communications that sometimes define customer service. As one who often has been on the other side of the rental experience — as a customer — Denny says, “I can look back on some jobs and I have some vivid images right now where maybe they delivered but I didn't know if they clearly understood that I was going to be done that evening or maybe I thought I understood the pricing but then when I looked at the invoice they didn't clearly elaborate the damage waivers and various other things. So all this goes to the table with me and I thought there needs to be no surprises. They need to clearly understand.”

Denny is a big believer in following up with customers, making sure they were satisfied with the service. “I read a quote from one of the sales experts that said of the people that leave your business, about 96 percent just go away quietly,” Denny says. “They don't come in and say, ‘I'm upset with you, I'm going to do business elsewhere and here's why.’ They just go away.” However, Denny points out, of the 4 percent that communicate a reason, if you immediately resolve the issue on the customer's behalf, you'll probably keep him.

“Then they're going to tell, not seven people, [which, experts say, is the number of people disgruntled customers tell about their negative experience] they're going to tell 12 people that ‘I had a problem with him and as soon as I brought it up to him, he corrected that immediately.’” So Denny looks for every opportunity to communicate with customers to see if they are satisfied with Pioneer's services.

Working in the industrial arena as much as he does, Denny emphasizes developing partnering relationships with customers so that they see the Pioneer staff as part of their internal team.

“I like to get to know them and what matters to them,” says Denny. “I like for them to feel like I care about what they're doing and that comes about by asking them, ‘What are you working on today, what's your project?’”

Denny tells of a recent experience where the power went out at the Conoco Phillips refinery after some high winds and Denny, knowing the potential consequences, left his home and went to the site. “Any time you lose power in a place like that, there's some operators trying to keep explosions from happening and the lost production is very costly.” Denny showed up not to try to sell or rent a piece of equipment but to see what he could do to get power and communications back up.

“They knew I was there with this attitude of what can we do to get going, not to sell them something,” Denny says. “I think that's what we need to strive for with all of our customers.”

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