The horrible recession that hopefully we're beginning to climb out of may go down in the history of the rental industry as one of missed opportunities. While rental people were more likely to mourn the lack of opportunity, when the phone wasn't ringing and regular rental customers lacked work, it was also a time when rental companies might have increased their long-term market share by showing contractors the value of their services.
True, a lot of contractors never called or responded to the efforts of rental company account reps because they didn't have much work. That much is pretty obvious, especially during a period when rental rates — when compared with cost of equipment — probably reached historic lows. But recessions also, historically, are good opportunities to increase rental penetration because construction companies were also faced with severe financial pressures and were reluctant to risk significant capital expenditures. Therefore they should have increased rental as a percentage of equipment used.
But, at least from everything I've heard, this did not occur and rental companies may have missed some great opportunities to broaden their penetration. If you take a look at our cover story on United Rentals this month, you'll get a couple of clues as to why this didn't take place.
In a survey of rental customers — both United Rentals' own customers and customers of its competition — one of the main qualities rental companies said they wanted from rental companies was reliable on-time delivery, and the responses of those surveyed clearly indicated they were not getting it. Respondents told United Rentals they would typically ask for 7 a.m. delivery — not just of United but of whoever their rental provider was — because they figured if they asked for it to be delivered before 7, they'd get it by noon, which is when they really needed it.
I was unpleasantly surprised to hear this response, which didn't come from just one customer. That speaks to a pretty poor record of reliability. We all know how annoying it is when we book a visit from a plumber or a service technician from our local cable television provider, or phone company, or gas company, and the best they can tell us is “between 7 a.m. and 1 p.m.” Personally, that amazes me when I get that kind of time estimation. Yes, I understand that they can't definitively say how long each service call on the schedule will take, but is that the best they can do? Can't they say “you're third on the list, we expect it will be between 9 and 10” rather than an obnoxious six-hour window?
Apparently the rental industry isn't doing a whole lot better than that. What many of those survey respondents said was they can accept that time quotes can be inexact. They understand traffic can be a factor, especially in a big city, and that certain drop-offs might take more time than others. Is it so difficult to say “between 10 and 10:30” and then if you're running late, give them a call and tell them “we're running a bit behind schedule, we think we'll arrive shortly after 11?” Most customers won't mind that as much as they mind not knowing when you'll really show up, or that they have to tell you they want it five hours before they really need it.
Lack of punctuality in service calls; lack of prompt delivery and pickup, and the communication that could lessen the impact; lack of security of supply; inconsistent rate structures; slow response to breakdowns — all of these are signs of a lack of professionalism. While our industry is significantly more professional than it was 10 or 15 years ago, we still have a long way to go for many potential customers to really trust our services. We need better technology, better information systems, far greater consistency of performance.
And rental companies need to keep accurate records of their performance. United Rentals is one of a number of companies that measures itself on how much time it takes to get a machine back up and running after a breakdown, or how close to on-time its deliveries are, how quickly it picks up a machine that is reported off-rent, and other areas.
By keeping these records you accomplish several things. First of all, you can show your customers what your performance is and the fact that you're charting those metrics is an indication you are striving for constant improvement. Second, use those metrics to analyze your own performance. You may be as good as you think you are, but then again you may not be and here's your chance to analyze why.
Anything less is a missed opportunity.