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Niches, Lions and a Lift Named Lucille

Feb. 1, 2016
It’s not every day when somebody calls a rental center and says they want to rent “Lucille.”

It’s not every day when somebody calls a rental center and says they want to rent “Lucille.” At least not in an equipment rental center! But it happens at Fagan High Reach & Equipment in Newark, Calif., where atrium lifts and other aerials in the company’s fleet have names. 

What’s more important – and you can read about this in this month’s cover story beginning on page 16 – is that Fagan has an effective niche, a unique place in the market. John Wetherholt realized some years ago that to survive in a competitive marketplace such as Silicon Valley and the San Francisco Bay Area, where many larger, better-capitalized companies rent the standard aerial work platforms that had been his bread and butter for years, he had to consider a different way of doing things. 

Naming the machines is very cool but in the case of Fagan, it’s no gimmick. The company has carved out a unique place in the market, renting the kind of machines others weren’t interested in renting, and doing it effectively with great expertise and a level of service rarely seen in this industry. The Fagan staff really breaks the mold and is taking the industry in a new and welcome direction in my opinion. Ultimately the key is not just a question of what machines you rent but what problems you help the customer solve. 

In a way it reminds me of another East Bay “company” that attracted a lot of attention in the baseball world a few years back, the Oakland A’s. Some of you are familiar with the “Moneyball” phenomenon developed by Billy Beane. You may have seen the movie Moneyball or read the book, and many of you heard Beane speak at The Rental Show a few years back. Beane realized that the A’s could not compete for expensive free agents against the likes of the New York Yankees and other baseball teams with lucrative cable contracts. So he found something undervalued – players who could get on base consistently – and emphasizing that, built a winning team. Yes, I know it’s not working so well anymore but it did for a decade! 

The important thing was he found a way to do something others didn’t do and succeeded at it, and in the current ultra-competitive environment of the equipment rental business, many companies are looking to or should be looking to do that also. 

The Fagan team was willing to go out on a limb, re-shape the company and try something different, and it worked. I wouldn’t recommend that you try to duplicate their model specifically because it took a particular skillset to achieve it. What I do recommend, however, is not to try to succeed by trying to be just like everybody else only cheaper, but rather by finding an original niche and pursuing it. Think outside the box and be different! 

No doubt some of you are thinking, “No, we’re just going to do what we do and do it well,” and that’s fine. But I just want to encourage you as The Rental Show is coming up to keep your minds open for ways to improve your business. You might not need to completely change your business model. Maybe you just need to consider some different products that you hadn’t thought of before or look to differentiate by developing some value-added services. There are some great companies out there in this industry and I know there are some niches that haven’t been explored. 

It’s the same in any line of work, and I’m no different. We just have to challenge ourselves to be better and smarter all the time. 

At press time, China’s second largest equipment manufacturer Zoomlion made an unsolicited bid to acquire Terex, an offer that Terex initially rebuffed. However, Zoomlion offered to nearly double the value of the company. Terex, already in a process to merge with Finland’s Konecranes, had no choice but to talk with Zoomlion as its stock price soared on the news during a period when nobody’s stock price was soaring or anything close to it. 

It has been written that such a deal could be blocked by the Committee on Foreign Investment in the United States because of security concerns since Terex is also involved in equipment used in ports. 

It will be very interesting to watch this story unfold in this fast-changing news environment. By the time you receive this magazine, I’m sure much will have changed. I hope you regularly log on to RER’s website, rermag.com, for our daily news updates and read our free twice-weekly newsletter RER Reports as well.