Heart of an IndependentSep 28, 2016
With a new focus on speed, safety and reliability and a new approach to sales,is redefining itself as a different kind of large rental company.
Asterios Satrazemis had a few things in mind after being hired as the new CEO of BlueLine Rental. One of the first tasks on his agenda was to call members of the company’s management team to get to know them. He also wanted to check in with Chris Carmolingo, former CEO of Trico Lift and now part of the BlueLine management team. So on a December 2015 day as his son smashed line drives in a batting cage while a pitching machine hurled fastballs at him, Satrazemis called Carmolingo, who, after working 25 years for Trico was a bit uncertain about the direction BlueLine Rental was going in and was weighing his options, including striking out on his own with a startup.
“Hi this is Asterios,” said the voice on the other end of the cell phone. “I’m going to be joining the team, don’t go anywhere!” Carmolingo decided he would meet with this guy with the unusual Greek name and hear what he had to say. When they did meet, Carmolingo was impressed with his ideas and what he felt would be a fresh approach to leadership and an emphasis on the things Carmolingo felt were important in running a successful equipment rental company.
“We spent some time together and he was the tipping point for me to really be excited about this company and the opportunities here,” says Carmolingo. “I call it ‘the bounce!’ It’s been a monumental change since Asterios joined the company.”
Satrazemis told Carmolingo that he was “trying to create an environment where you get the benefits of a large company but not the bureaucracy,” he says. “So it’s getting people at a market level who are running their businesses within enough structure to get the benefits of a large rental company but enough flexibility to adapt to the market.”
Satrazemis defines it as maintaining “the heart of an independent.”
“You can’t keep someone like Chris who was president of a company interested if they feel it’s all too cookie cutter and constrained,” he says. “The goal is to give people enough room to manage the market that’s in front of them versus always pushing the corporate agenda onto them.”
And that’s the philosophy bringing new life to BlueLine Rental.
Satrazemis made his pitch to key BlueLine executives and asked them to join him in what amounted to creating a new company. The next major task that confronted him was the realization that BlueLine Rental really had very little identity. It was the former Volvo Rents, but now that it had ceased to be Volvo Rents, what was it? What differentiated it from other national rental companies? And the question Asterios asked, along with ‘Who is BlueLine Rental?’ was ‘Why does the world need another national rental company? What can we offer that’s uniquely ours?’ ”
Satrazemis went on a quest to find these answers. He gathered all the branch managers, district managers, outside sales reps, sales managers and other key personnel for a gathering in Las Vegas. He asked the more than 600 people in attendance how many had been with BlueLine Rental for less than a year? About half raised their hands. The next question was how many had more than 10 years of experience in the equipment rental industry? Again about half or even more.
So, Satrazemis thought, it was the perfect opportunity to create a new culture. A high percentage of people already had significant rental experience, so they should already know the basics of operating a rental company. And with so many new to the company they could work together to create something new. Satrazemis has since been traveling to the company’s branches with the goal of visiting them all and talking to every person in the company one on one.
“On the one hand I was surprised at how many people were new to the company, but it was great to see the vast industry experience,” Asterios says. “And it allowed me to quickly see we can treat this as if it were a startup, because we’ve got so many new people, without preconceived notions about the business. We can basically start from the ground floor in terms of our selling methodology and our branding. So that’s what we’ve done. I thought ‘We’re going to use that as an advantage and blaze our path.’ ”
For Carmolingo the idea of the heart of an independent resonates. Having worked for an independent, Trico, he never envisioned being happy with a large rental company. “I like the approach we’ve taken,” Carmolingo says. “What is really different about BlueLine is that we’re taking an independent approach in each market and it’s working very well for us. Not just taking the cookie cutter approach and executing the same in every market — we look at each market intelligently relative to that market. Then we’ll grow in each market. We’ll create density using this approach versus trying to take it on a macro level and eat the elephant in one bite.”
Fast, safe and reliable
After extensive meetings with staff, including one on one, Satrazemis developed a three-word motto. “Fast. Safe. Reliable.” The company bought in to the idea that everything had to fall into the definition of those three simple words.
Starting with speed, obviously an important part of it is how quickly equipment is delivered to the customer and the speed of responding to customer needs. It also has to do with how quickly the company makes decisions, and the lessening of bureaucracy that slows down decision-making.
“The amount of time our branch managers and our district managers spend doing anything that’s related to bureaucracy in this organization is very minimal,” says Satrazemis. “I put a premium on them being out with customers. I don’t want them at their desk, I don’t want them on the computer, I want them in the truck, in front of customers and with our salespeople. The speed of getting to the customer and reacting to the customer is where we’re putting a premium. Our activity level, how much time we are spending with the customer, how many meetings we are having with the customer, is just skyrocketing.
“As a sales person and as a sales manager, we’re measuring how much time you are spending out in front of the customer. Because we’re asking them to log that info in Salesforce.com, which is a fantastic tool that we use. We’re tracking every month and it continues to grow.”
That customer face time is one of the ways the new BlueLine measures speed. “The amount of time that you spend in front of the customer means we should be the first to the customer and we’re going to be the one the customer thinks about more than anybody else,” says Satrazemis. “In addition to the mentality of speed to the customer, we’re proactively managing our equipment, how much of it is available, how much of it isn’t available, so that we can have speed to actually close contracts. And we’re spending more than ever this year to build up our equipment fleet.”
Speed also involves answering the phone quickly. The new BlueLine policy is that if the phone rings it should be answered before it rings three times. The company now has an integrated phone system throughout the entire business. If a customer calls a branch and the phone rings three times the call is immediately rolled over to the Field Support Center.
“If the call goes to the Field Support Center, those people are fully trained Inside Sales Reps with full access to our system,” Satrazemis says. “Unless the caller has a specific market question that somebody at the central office would be challenged to answer, they have complete access to our inventory. The Field Support Center can take orders and assist customers like anyone at any of our rental counters can.”
In addition to not losing potential business, the Field Support Center has made more than three times the revenue this year than last year’s call center operations.
Safety in the forefront
Moving to safety, the first thing one sees when one walks into a BlueLine Rental branch is a display with safety vests, hard hats, protective eye-ware and toe protectors for those who don’t come equipped with steel-toed boots. If there are hazardous materials on site, the branch includes descriptions on how to clean them up and how to contain a spill. The first point discussed is where are the evacuation points in case of fire or other emergency.
“I like to really focus on safety,” says Chad Shaw, manager of BlueLine’s Humble, Texas, store, one of five branches it operates in the Houston area. “I come from a transportation background, in trucking, so I know the drivers are more susceptible to incidents than anybody. So I really like to talk to drivers, tell them to look out for tripping hazards on their trucks, on top of the decks, such as chains as they are walking back and forth. I talk to them on a daily basis; I always say ‘Be safe.’ I want them to keep it on the forefront of their minds.”
Every branch has a safety meeting at 6:30 on Friday morning, discussing a wide range of safety-related issues.
“When it comes to safety, I’ve tried to bring my experience fromto BlueLine. At Aggreko when you’re working with it is even more critical that safety is front of mind. It’s a different level of focus that I’ve tried to bring to BlueLine,” says Satrazemis. “That’s why we put the safety boards in our branches here. It puts safety at the top level.”
Satrazemis says he wants BlueLine to be the safest of the large general rental companies in the rental industry and sees no reason why that goal cannot be achieved.
“We’ve seen a significant reduction in the incidents in our organization,” he says. “We have a lot more people going home safe. This year we’ve had less than a third the number of the incidents that we had in the organization before. And all of that comes down to leadership, keeping it front and visible. And we track it on a regular basis, every incident that happens comes to me directly as well as the managers of the team. So that’s been a big improvement and something that I expect will continue to go in the right direction for us.”
Reliability to the customer
Being safe and fast are important but they must go hand in hand with reliability. Obviously the essence of rental is providing the equipment the customer needs when it wants it. Asterios says BlueLine has one of the youngest fleets in the industry, with average fleet age significantly less than industry average.
“We leverage the vendors as partners,” Satrazemis says. “And they are really resonating with that. We’ve got all the major brands that you expect from a general rental company, but we have a handful that we’ve really locked in with and created some special relationships. We’re getting great things from these partners on training, on maintenance and warranty. Rob Blackadar, who is our vice president of operations, doesn’t go to look for the cheapest. It’s a partnership. It’s not just a procurement exercise.
“In our business, we only own the equipment for a very short period of its useful life. The manufacturer’s brand is on it for the entire life of that piece of equipment, but our brand is only on it for a short period. It behooves us for the period of time that both our brands are on that machine to work together because if there’s a failure, or a breakdown, both our brands are affected.”
BlueLine strives to develop into a more reliable company with better trained mechanics and sales people that have access to the right maintenance information and diagnostic capabilities. The BlueLine staff is working closely with suppliers to develop training programs to enhance the capabilities of BlueLine’s technical staff.
BlueLine is in the beginning phases of developing a multi-step program, beginning with outfitting drivers and delivery vehicles with black boxes, dispatch systems, and everything being paperless so customers can sign on an a tablet. All trucks will be wifi-enabled, making the trucks mobile hot spots. The company is doing the same with its road mechanics as well as inside shops so all technicians will be outfitted with tablets and be essentially paperless. BlueLine is developing with vendors a new telematics process that Satrazemis says will go beyond anything currently being done in the rental industry.
“Once the program is fully launched, I expect us to be an organization that will be able to monitor every piece of equipment that we have remotely,” he says. “We’ll be able to see where every piece of equipment is at any particular time, track the on-time delivery, track breakdowns remotely. And that program is probably one of our biggest investments.”
Reliability to the customer is important, as is communication in case of a problem.
“Most people don’t like conflict; it’s human nature,” says Satrazemis. “Most people don’t want to pick up the phone and have that discussion where you’re going to have to tell somebody, ‘We screwed up, that delivery isn’t going to be there on time.’ So they find every reason not to make that phone call. And we talk so much about communication and trying to build that. We want to run to a problem, not away from the problem. And customers will reward you for it.”
Selling the BlueLine way
Asterios has brought a different approach to the sale of rental services which he likes to call “Selling the BlueLine Way”, which involves a lot more listening than it does talking and focusing on establishing a relationship rather than emphasizing the features of the machines the company has available.
“Selling rental is completely different from selling equipment, or selling cups or any other product,” Satrazemis says. “Selling the BlueLine way is all about engaging with customers in a way to gain understanding of their pain and challenges. By doing so you can then craft a solution to potentially help them. It’s a paradigm shift in the way that most salespeople sell. Most sales people sell the benefits or the equipment itself. They sell you what the thing is. ‘I’ve got this shinyand it can do this,’ or ‘I’ve got this many boomlifts.’ So what we’re trying to do is train our team to not sell the equipment or rent the equipment. It’s more ‘Let me spend time with the customer, let me try to understand the challenges he or she faces.’ Because when a customer rents a piece of equipment he’s not renting because he wants to rent a piece of equipment, he’s renting because he needs to get something done. It’s changing that discussion and being more proactive. In our industry today we have far too many salespeople who are order takers.
“If I walk into an office to get a customer to rent something, no matter what kind of fantastic deal I offer, unless he needs to rent something that day, there’s nothing I can do to get him to rent. Would you go rent a car if you didn’t need to because somebody was offering a discount? If I’m selling equipment or cups or paper or any item, the customer might not need it that day, but he might buy because he knows he’ll need it eventually and I just gave him a good deal. But he won’t rent equipment unless he needs it right then. So all I can do is establish a relationship so he thinks of me when he does need to rent something.”
Asterios says the key is asking the customer a lot of questions. “Some salespeople will do what I call a drive-by sell where you drive by, drop off your business card and line card and say ‘If you need anything call me.’ That’s not a sales call. With us it’s trying to get the team to ask a lot more questions and talk a lot less. If they do that effectively, long-term, customers will remember us more than anyone else.”
Ultimately the key to Selling the BlueLine way is listening. “It’s all about diagnosing the customer’s biggest challenges and figuring out that you have a solution that you can provide them to help them overcome those challenges. It’s not selling the bells and whistles of your equipment. Now if the customer wants to know about those features, you have to be well versed to explain it to them. But when you start talking to a customer and asking them questions, you learn so much about them and what challenges they face and then you can come back with ‘Let me see if I can help you with that challenge.’ ”
One of the strengths of BlueLine is the relationship its local people have with the customers. “It’s so important to know the people,” Carmolingo says. “There is so much more sophistication in the industry relative to when I started. As far as operations, it’s changed so much. But people haven’t changed. Relationships with the local community and customers are always going to be the foundation.”
The clustering effect
BlueLine Rental is interested in growth, but not for its own sake. It has no particular goals or plans to become the biggest player on every block, but feels it can do best by developing strong share in particular market areas where it has strength. Satrazemis says the company will probably have added about 10 new startup branches by year’s end and will continue in that direction next year by focusing on areas where it is already strong. At the same time, it has closed a few branches that were on their own in a particular market without support.
The theory behind the growth pattern is basically clustering. BlueLine operates with shared, floating fleet. A machine doesn’t have to belong to a particular branch, but can be rented from any branch as needed. It’s unlikely that a single rental location in a market will always have equipment on hand to fill every customer need, but when several stores are in the same area, their inventory can complement one another’s. The ability to draw from several rental centers gives BlueLine strength in those markets. But an isolated store has no backup to help it when it runs low or runs out of a particular category of equipment.
The clustering model is enabling BlueLine to prosper in a number of areas without feeling that it has to be in every market at once.
“When I go out and see market clusters with a number of branches within a reasonable radius, you can see the strength and the quality of operations,” says Asterios. “You can see why they are more profitable and growing faster. So we’ve been building on those clusters. We’ll open about 10 new locations this year. None of those new locations however are putting us into places where we’re not. All of them are building out our market clusters.”
Satrazemis says his vision for about the first two years will be to focus on building up the clusters and then beginning around 2018 looking to expand into different markets.
“I’m asking the regional leaders to come back to me with proposals,” he says. “Where do you think you have a good clustering, where do you think you need to add a distribution point, where do you need more people or more equipment because you’ve got a solid cluster. It’s not always about a distribution point, sometimes it’s just supply. The team comes back to me with a lot, they put together their pitches and we narrow them down to what we think the best opportunities are and those are the locations we’ve opened.”
The clusters serve a tactical purpose, Satrazemis explains. With BlueLine Rental evolving from Volvo Rents, which grew out of franchise operations, some of those franchises were essentially on their own in a particular region or state.
“What I’m trying to do is ensure we are building a network that can truly support our customers in a way that they need to be supported,” he says. “When you have one location it’s very hard to have everything that a customer would potentially need. So we want to be in a market where we could have three, four or five locations so a customer can always get what they need when they call.”
Aerial and specialization
Many of the large national rental companies establish specialty divisions in several areas. While BlueLine essentially sees itself as a general rental company, it will take advantage of expertise in certain areas to establish specialty divisions. Because one of its last major acquisitions wasrental specialist Trico Lift, Satrazemis could see that it makes sense for the company to establish a specialty aerial division. With the leadership of former Trico Lift CEO Carmolingo, and Rob Hepler, a veteran of four decades in the aerial rental business, the company had a wide range of aerial inventory, branches with strong reputations in aerial, and a lot of staff with the kind of in-depth knowledge necessary to provide expert assistance.
The company is establishing a BlueLine Aerial division and is already beginning to brand several locations that were part of the former Trico Lift as BlueLine Aerial, as well as a few greenfield starts. The company continued to operate the branches as Trico for a couple of years, leveraging the three decades or more of that name, but is now making the transition to the BlueLine Aerial brand.
BlueLine’s venture into aerial specialization appears to be contrary to industry trends.
“I really see less of a focus on aerial specialty but more aerial being integrated into general rental,” says Carmolingo. “I’d say that’s an industry trend. That’s part of the reason why we want to look to go in the opposite direction and fill that void in some of the major markets.”
BlueLine is considering other areas for specialization, but, at least in the foreseeable future, power rentals is not likely to be one of them despite Satrazemis’ years of experience doing just that with Aggreko. Satrazemis saw the exceptional degree of knowledge and expertise that went into what Aggreko did and knows BlueLine does not have that level of concentration in that highly specialized area. However, the company is considering a few specialty areas down the road.
For now, being in every specialty area or being the biggest are not the priority. More important is being fast, safe and reliable and maintaining the heart of an independent.
For more information about Asterios and Blueline Rental visit: www.bluelinerental.com.