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Have You Got the Right Fit for Rental?

Written By Pam Gruebnau


Rental-specifc software is designed with a spectrum of business tools
tailored to this distinct area of your business - without it, you may be
short-changing your own operation.
While nearly 100 percent of construction equipment dealers
have rental feets, AEDs Rental 2006 survey found that
70 percent of dealers are not using software developed
specifcally for rental operations. Instead, they are trying to
manage their feets using dealership management software.
In sharp contrast, the same report also found 65 percent of all
rental companies and 100 percent of larger rental companies
do use rental-specifc software a business practice that rental
industry experts agree gives rental companies a signifcant
competitive advantage in equipment rental.
I fnd it amazing that so few construction equipment dealers
are using rental-specifc software, says rental expert and
consultant Dan Kaplan of Dan Kaplan Associates, former CEO
of Hertz Equipment Rental. Rental companies got where they
are today because they were able to use the data and services
that rental-specifc software provides. I feel strongly that
dealers cannot operate successful rental operations without
rental software. It will pay for itself in a very short time.
Rental software doesnt just manage your rental business it
tracks it, understands it, and provides you with the information
to improve your processes, expand your business, maximize
feet rentals and increase proftability.
If youre going to rent and rent effectively, you need to use
the same type of rent-to-rent software as a rental company,
said John Andersen, vice president and PFW evangelist at
PFW Systems, creators and publishers of IntelliDealer Rental
Counter software. Most dealers have basic rent-to-purchase
software as a part of their dealer management system, but to
succeed and thrive in the competitive world of equipment
rental, you need more than that; you need software that can
handle all the complexities of rent-to-rent.
Every rental contract, customer interaction, asset delivery or
return, or service adds to the knowledge base of your business.
Which equipment is the most popular, which costs the most to
run, and which generates the most revenue? Which customers
are your best sources of revenue and which generate the most
proft? And, most important, which customers are actually
costing you money? The rental-specifc software will also
track the level of customer service you are delivering. It also
identifes how long it takes to get from request to contract
and how long customers are kept waiting. Other tracked tasks
include how many keystrokes it takes to initiate a contract or
invoice and what your rental customer retention rate is.
Rental-specifc software should be mining and evaluating this
data and providing management and trend information specifc
to a rental operation.
Your rental software should help you differentiate your
service, improve your proftability and optimize your feet
so you can be successful in a very competitive industry,
said Nigel Miller, chief operating offcer, SYSTEMATIC, a
software frm that specializes in rental management.
Software Solutions
Several companies market rental-specifc software, each with
its own unique set of features and benefts. A combination
of some or all of the following features will allow you to
maximize ROI on your rental feet; uncover problems before
they become critical; reveal trends, patterns and correlations;
and track branch performance.
Complete tracking tools: Information-gathering tools can
help manage your rental feet and provide utilization statistics
by the hour, by the machine type, by the customer, by the
brand or by the manufacturer. These tools allow a dealership
to build an effcient, proftable feet by keeping accurate and
real-time data on the fnancing costs, maintenance costs, repair
frequencies and proftability of each unit in the rental feet.
Inventory control: Perpetual inventory management can
provide serial number control, meter calculations (component
breakdown predictions and preventive maintenance
scheduling), bar-coding, in-transit branch transfers, automated
red tag/green tag status, warranty charges and fexible
depreciation calculations.
Automated functions can then schedule routine maintenance,
maximize uptime and revenue, minimize staff time and protect
your equipment investment. Rental-specifc software will
also track inactive rental machines, missed rentals, inventory
transfers between branches, and item repair histories.
Rental counter automation: Automating your rental counter
with an easy-to-use graphical interface allows your rental
sales staff to convert quotations and reservations into rental
contracts with one keystroke. The display should detail the
availability of each unit in the rental feet, allowing your
staff to provide the customer with more accurate rental unit
availability and minimize the customers wait.
Other features may include credit-card processing, automatic
generation of work orders upon the return of rented
equipment, insurance and damage-waiver processing, and
applying a surcharge to the invoice for over-usage, based on

machine hour meter readings. And some software will create


inventory reservations months or even years into the future.
Flexible pricing: Flexibility in all aspects of rental feet
pricing, such as frequent renter discounts, multiple rate
books, group rates, and quantity breaks, will maximize
revenue generation and improve customer satisfaction.
Varied rental duration: The ability to effciently rent for
virtually any span of time including hourly, half-day,
daily, weekly or monthly allows you to quickly and easily
customize a rental for each customer.
n Optimized billing: One of the most common complaints of
equipment users is the slow, confusing and inaccurate billing
they receive on equipment rentals. Fully automated billing
provides the ability to quickly and easily calculate optimized
billing rates to keep costs down for customers and improve
customer retention, while increasing profts for dealers.
Automated contract generation: Fully automated contract
generation is more effcient and accurate. Databases can
immediately complete the contract with all necessary customer
information.
Rental-specifc fnancial reporting: Financial reporting
components should provide on-demand, real-time access to
and control of fnancial resources, allowing you to view
reports on accounts receivables, aging, rental assets sold,
inventory valuation, reservations, and overbooked product
categories.
The system should also forecast cash requirements; support
multiple currencies and exchange rates; display detailed
invoice histories; control credit limits by type of sale; and
analyze fat and percentage discounts.
Customer relationship management (CRM): Immediate
access to customer information makes it possible for your
entire staff to know your customers better, which helps
them serve your customers better and provide personalized
solutions. Rental software customer-relationship management
features provide automatic access to pertinent customer
information, such as customer profle, outstanding accounts
receivables, contact information, invoice history, parts
purchases, equipment and rental information, and customer
preferences. Reports on inactive customers and customer
payment histories may also be available.
Total integration: The software should easily integrate
with the dealerships fxed-asset systems, service systems
(work-order requests, preventive maintenance schedules,
etc.), dispatch systems (trucking, deliveries, etc.), accounting
systems and customer data systems. Ideally, the software will
include a fexible reporting system that automatically shows
you key performance indicators and trend analyses.
Dashboard report: A rental software dashboard provides
instant, easy-to-understand graphic access to information
that allows managers to monitor key factors in real time.
The most successful rental companies use management
dashboards to gauge the health of their businesses. A
dashboard provides access to real-time, up-to-the-minute data
and displays it in an intuitive, graphical way, giving rental
managers the information they need to make intelligent and
immediate business decisions, said Don Whitbeck, CEO
of SYSTEMATIC. With this intelligent technology, you

can customize the software to extract the metrics you want


proftability, utilization, average value per contract, etc. to
help move your business forward.
Tomorrows Technology Today
Several current and emerging technologies, including RFID
or bar-coded customer loyalty cards, thumb-print scanners,
and RFID or GPS tracking of rental equipment, are presenting
opportunities to combine with rental software to provide
innovative business solutions, ground-breaking competitive
advantages and additional revenue opportunities.
With these technologies, your customers are recognized
on contact, the moment they call or walk into a store,
said Miller. The RFID or caller ID technology recognizes
them and primes your rental contract with all their pertinent
information, getting you to a completed contract that much
faster.
Rental equipment enabled with RFID and GPS technology
can easily be monitored both in your yard and at the
customers sites with little or no effort. The technology should
dramatically reduce fraud and theft, instantly identifying when
equipment changes sites or is heading away from you when it
should be returning, Miller added.
Whether you use a simple off-the-shelf rental software
package or rental software with all the bells and whistles,
rental industry experts agree that rental-specifc software is the
only way to manage an effective and proftable rental business.
To maximize profts, dealers need to stop viewing rentals as
a secondary part of their businesses and start viewing rent-
to-rent as a process that is just as integral to their success as
equipment sales or parts and service, said Andersen.
As published in Construction Equipment Distribution
CED posted article.