What is the first thing a customer sees when walking through the front door of your rental business? If you answered, “The counter,” then you have some reorganizing to do in your showroom.
Chances are very good that if a customer immediately spots the counter upon walking through your front door, he or she will make a beeline to it — bypassing all the other rental merchandise and accessories you have taken the time to display.
Test yourself. Step outside the front door, and walk in just as your customers do day-in and day-out. What is it that they see? Is there a particular display that catches your attention? Have you noted an increase in sales for any of the items on that display? In other words, is it working? If not, it's time to change it. Customers may have already seen it so many times that they just breeze right past it by now.
The truth is, rental companies are changing the way they do business to stay competitive in the growing environment of one-stop shops and in an effort to add new revenue streams to the business. Home Depot and Lowe's home improvement stores are changing the landscape for everyone in the marketplace — offering tools, accessories, appliances, lawn and garden items, hardware and rental. If these retail giants aren't directly competing with you yet, just wait, they will eventually. Neither Home Depot nor Lowe's has shown any signs of slowing its growth. And some of the larger rental chains are reacting to this growth as well, taking stock of their own showroom layout and merchandising strategies.
“Lessons can be learned from marketing companies like Home Depot who are beginning to compete directly with local rental companies,” says Alex Shields, vice president, sales and marketing at MMD Equipment. Whereas customers used to go into a rental store, walk immediately to the counter and process their rental transaction, the entry of big box stores to the rental market has changed that. There's no longer a need to go to a different store to purchase supplies for a job. It's all right there. “Along with offering a truly awesome array of building materials and supplies, the big box stores do a superior job of advertising and merchandising,” adds Shields. “This includes organization and display of the merchandise, signage and sales support.”
The big rental companies have what industry consultant Dan Kaplan calls “image” facilities. They have the same color schemes, layouts and signage from branch to branch. “A lot of stores lack identity,” says Kaplan, owner of Morristown, N.J.-based Daniel Kaplan Associates. “What are they trying to portray themselves as? Who are they trying to appeal to? What is their customer base?”
Once a rental company answers a few questions about itself, it can begin the process of conveying that message to its customers through every aspect of its business. What better place to start than with the sign out front that identifies the name and nature of your business? Kaplan recommends using state-of-the-art signage that clearly identifies the store as a rental business. Pole signs are easy to read and identify from a distance.
Showrooms should be kept clean and dusted and have a fresh, crisp, up-to-date appearance. Floors should be in good condition and polished daily. Restrooms should be convenient to customers and well maintained. Businesses that take the time to present a polished image impress professionalism and a positive attitude about their business to customers, explains Mike Radich, president of Store Fixtures Unlimited, Gilbertsville, Pa.
“Having a clean, organized showroom promotes a professional brand image while silently suggesting product and services to the walk-in customer,” says Michael Disser, vice president of marketing for NES Rentals.
“I think as a whole, presentation is really everything,” says Shields. “Customer perception of the store is everything. A poor presentation will lose sales. A dusty showroom and yellowed, out-of-date literature does not present an image of being up-to-date and having top-notch products for sale.
“The retail customers' needs are changing, and the rental store will have to do business differently to provide for their needs. The stores have to find ways to keep their customers coming back to their location, and becoming a one-stop shop for solutions to their customers' problems.”
Small rental stores can benefit from finding additional revenue streams to help them maintain profit margins. “A very profitable area is the merchandising of supplies as well as the sale of new equipment,” says Shields. “The small store needs to be as close to a one-stop shop as possible to serve its customers. Indeed, several stores and store chains have exploited retail sales very effectively, but merchandising and marketing must be done properly for maximum effect to win and keep customers.”
How to display the right way
Good displays speak to customers even after they've left your store. That new generator display you put up front last week may not have sold your last customer a new genset today, but if the display was bold and eye-catching, the customer will remember he's seen generators at your store when the time comes for him to rent or purchase one.
“You've told your customer a story that you have these things available for rent or for sale,” says Radich. “You want to get at least one of everything you have for rent or sale out onto the showroom. A picture stays with any astute businessperson. Visually seeing the products and services you have to offer is important.”
Lee Lightner, president of ABC Rental Center, Catonsville, Md., took a Yanmar ultra compact excavator that had been sitting idle back in the yard and moved it into the showroom so his homeowner customers could see that is was available. In no time, Lightner started getting calls for it and the item is now consistently out on rent. “If I had kept that thing back in the yard, I guarantee you I wouldn't have rented it,” Lightner says.
Create focal points of merchandise within your store. The idea is to draw the customers' attention to the items you want them to see. Give them something different to look at — possibly something they aren't accustomed to seeing in a rental store.
Vince Nett, CEO of Advantage Rental Center, Algonquin, Ill., makes a habit out of displaying unusual items in his showroom. Former displays include a high-wheeled mower, cider-press, battery-powered wheelbarrow and portable hot tub. “They are all great conversation starters,” says Nett. “These conversations put customers at ease and impress once again, ‘Is there anything you don't rent?’”
“These focal points can be reinforced by signage, dramatic use of color, lighting and cleverness of the displays,” says Bill Hoffer, marketing manager, MMD Equipment. “If the focal points are arranged well, they will combine to lead the customers past all of your merchandise, and also create a memorable impression of your store.”
If you are limited with space in your showroom, select the items you put on display thoughtfully. You know your customers best. If they are familiar with some of the common items you rent, then focus on displaying some items they may not know you rent. Re-examine your product mix and display new items in the showroom for maximum exposure. Measure the results of rentals and sales you have against those items so you can see what works and what doesn't.
“Even small items, like Chicago fittings to adapt air compressor pipe sizes, can be great profit boosters if the customer sees them in the showroom available for purchase,” says Lightner.
Set up displays so that customers can touch and feel the equipment to help them decide if it is the right tool or accessory for them, advises Steve Mowbray, vice president of rental services for Altorfer Rents, a Cat Rental Store with locations in East Peoria, Ill., and Bettendorf, Iowa. Customers should be able to ask and answer questions about the merchandise such as: Does the tape measure have easily legible markings? Is the hammer the right size for me? Will this tool fit into the toolbox in the back of my truck?
Radich explains that self-serve shelves are important because they not only make it easy for customers to find what they need quickly and help themselves to it, but they also free up your counter personnel to handle rental transactions behind the counter. “Secondly, your shelves don't get vacation pay or workers comp,” says Radich. “You don't have to pay them anything to work for you. They are a one-time investment that will quickly pay for themselves. It's an initial investment that will keep working for you.”
Partner with manufacturers and distributors to achieve your merchandising goals. Take advantage of their resources such as signage, shelving, racks and other display units to freshen up the look of your showroom. Contact the manufacturers of the tools and equipment you carry to find out if you can benefit from their merchandising expertise. These resources will work with you to build a partnering relationship to help ensure their success with top-notch equipment, finance packages, technical support, as well as marketing and merchandising support.
“Rental stores need to realize the days of being a one-dimensional general equipment rental store are rapidly disappearing,” says Shields. “The challenge will be to find other dimensions of business in which to compete. This is new ground for many small store operators.”
Bosch Tool Corp. also offers merchandising assistance to rental companies. “Rental has become synonymous with retail,” says Steven Holley, national account executive for the rental channel at Bosch. “The days of relying on sales based on equipment rental only are long gone.”
Generating new streams of revenue starts with presentation. Group like items together to make shopping easy for the customer. This strategy helps your displays become a silent salesperson. Purchasing one item often leads to the sale of another grouped in the same category. Items should ideally tell a story about their intended application. “Products can be grouped to relate to each other in some way, and ideally tell a story about their intended application,” says Hoffer. “This can be clarified with a graphic or photo backdrop; by appropriate literature also located on the display; or even by inferences drawn from a major tool included in the display.”
“Grouping tools with accessories builds momentum and works for both contractor and homeowner customers,” says Holley.
Lightner's ABC Rental Center partnered with MMD Equipment in December to implement showroom merchandising on generators and submersible pumps. Lightner realized that his company was losing money on potential sales opportunities. As a result, sales of generators have tripled and the initial display of pumps sold out in the first two weeks.
“The MMD program, for example, includes display racking, signage, consumer literature with racking, and advertising materials,” explains Shields. “We also help customers evaluate their showroom displays and product mixes. All of this comes together as a selling system. In other words, we have programs to attract end users, get the store message out to them, and sell the products effectively when the customer enters the store. We look at it as a partner-style relationship with our customers.”
Shift with the seasons
Once you get your showroom working for you, keep it fresh.
“The biggest mistake I've seen is when a showroom isn't changed on a frequent basis,” says Disser. “Customers will simply walk past a display they've seen dozens of times before — they're being trained to look away.”
Place new equipment lines and accessories in high traffic areas. Let customers know your fleet and inventory are constantly evolving. Perhaps a new display will encourage them to ask about a related product they've been wanting to rent or buy.
Keep seasonality in mind when building new displays as well. It won't do you much good to display lawn and garden equipment in the winter months and it won't boost sales to spotlight your snow throwers in July. Plan a rotation of displays based on the equipment available in your fleet and the season changes in your region. Also, consider your customer base. Who are you trying to appeal to? What do your contractor customers specialize in?
“We dominantly display accessories and seasonal in the showroom,” says Disser. “It's similar to the check-out lanes at grocery stores. You may not have come to the store to purchase any of those items but seeing an item, such as a ladder or diamond blade, may stimulate a purchase.”
Keep traffic flowing
Once customers have made it around your new displays they'll be ready to hit the counter. Though the counter is better situated near the back of the store, it shouldn't feel like walking through a maze to get there. A logical pathway though neat, clean displays should lead customers to the rental counter.
“It may be an old trick that everyone has heard, but it still bears repeating,” says Advantage Rental Center's Nett. “The counter is in the back of the showroom to expose people to as many of our rental items as possible. I've never found rental businesses to have many ‘impulse’ purchases, but I want customers to remember the diversity of the items that we offer.”
As customers are shopping, aisles should be free from obstacles and wide enough for two people to shop comfortably side by side or to pass one another. There should also be enough space between aisles to examine the products after they are removed from the shelves.
To take best advantage of your merchandising and showroom displays, consider designing the traffic pattern to lead customers from the front door past your most popular or profitable items to get to your counter. “A planned ‘treasure hunt’ type of layout helps deliver maximum product exposure,” says Hoffer. “Don't hesitate to evaluate and experiment with your traffic plan from time to time. Take note of your sales performance after making changes and build on your successes.”
And since it is the main hub of activity for the rental center, use counter space for merchandising opportunities as well. The counter is an ideal place to post information, consumer literature and promotions. The counter personnel are conveniently stationed there to answer any questions about these items that might arise.
Impulse items are also well placed at or near the rental counter. It is most likely the last point of contact the customer will have in your showroom before walking out the door, which makes it a good place to reinforce your store brand. Use overhead space to display signage and convey your message.
Be careful to ensure that space behind the counter is arranged efficiently as well. Can counter personnel handle computer terminals, phones, printers and credit card machines without getting in each other's way? “I find many stores have not put a lot of thought into efficiency,” says Nett. “We all need to do more, with less staff. If you can save a number of footsteps on each transaction, it will equate to faster customer service and less fatigued employees.”
Lightner reasons that customers are shopping and justifying additional purchases while standing in line at the counter. For example, if a customer stops to consider a display of submersible pumps in the showroom, he can be mulling over the additional purchase while he waits in line to complete his rental transaction. Better yet, if you include prices on your displayed merchandise, customers can consider the full impact of the purchase on their bottom line or wallet. The guesswork of rationalizing a certain expense is eliminated when prices are fully disclosed.
“If the price isn't readily available, then they don't know how much it will be. They can't begin to process their possible ROI on the item,” said Lightner. “They may not even ask the price when they get up to the counter and the sale is lost.”
Have appeal. Build relationships.
Besides having a clean, well-organized showroom, good signage and outstanding displays, there are additional ways to stand out among your competitors. Altorfer's Mowbray suggests trying some things that are different.
Mowbray suggests, for example, placing a TV near the counter so that customers can watch news, weather or sports while spending idle time waiting. The television can also be a good conversation starter and a way to get to know some more background about your customers such as which football and baseball teams they root for, or where their kids go to school or play little league.
Make sure that the counter is placed at a level that allows customers to lean on it and that stools are placed in front of it so customers can take a seat while they wait. Offer coffee and popcorn throughout the day. Customers will come to associate your store with such refreshments. Provide free ice in the summer months so that customers can come in and fill up their cooler prior to heading out to the jobsite.
Perhaps most importantly, get to know your customers. What are their first names? What is their business specialty? Is there anything you can offer them that you don't already provide? Lightner notes that his philosophy is to build relationships with customers and concentrate on keeping the ones in front of you coming back.
Hire people that your customers will enjoy doing business with. A positive, can-do attitude at the counter goes a long way with customers. Require employees to maintain a neat, clean-shaven appearance and to wear a company uniform. Looking professional communicates to customers that you take your business and its fleet seriously.
“You can't believe how often I consult for a company and have to tell them their employee needs to shave every day,” says Kaplan.
Train employees to do whatever it takes to satisfy a customer's needs, even if it means sending them to the competition. “Offer to make phone calls for them to find the item they are looking for,” says Mowbray. “Offer to have it ordered and sent to you overnight. It's people that make the difference.”
Advertising and marketing
Now that you have a great showroom you want to drive some traffic in to see what your company has to offer. Start with the basics — the Yellow Pages. Experiment with different sizes and styles of ads. Track the results with unique phone numbers to find out what is most effective in your area.
“Don't be afraid to experiment,” says Nett. “Regardless of what your yellow pages salesman says, you will not be bankrupt next year at this time if you reduce the size of your ad. In this day and age, there is so much more media available. Trim your yellow page budget and experiment with that money on other mediums.”
Cable television is flooded with home improvement channels and individual do-it-yourself series. Call your local cable company and inquire about different rates. Advertise regularly in the local newspaper. Readers will remember seeing your ad and when the time comes to pay you a visit they can refer to the newspaper to find the ad. ABC Rental Center's Lightner learned the hard way that advertising regularly in his local weekly paper was more effective than doing so only periodically.
“You have to make a commitment to what you do to make it work,” he says.
Try a direct mail campaign to your homeowner customers. Invite them in to your store for an open house. Offer small giveaways of items that promote your company. Mowbray, for example, has sent mailers to customers offering a free hat, T-shirt or CAT racing car. These items are more personal than dollar off coupons and customers promote your company for you when they wear them around.
“The idea is to get the customer into your store,” explains Mowbray. “Offer them something personal that will last and will give you exposure.”
Cross-promote your company on everything. Include your phone number and Web site on all mailers, literature and equipment decals. Make it easy for these materials to do the hard work for you. “Have your counter people mention it on every phone call,” says Nett. “Your Web site really is your 24/7 silent salesman. The best part is, he never asks for a raise, is sick or quits during the busy season.”
Consider some unconventional advertising avenues such as grocery cart ads, billboards, little league team sponsorships and distributor partnerships. Nett once arranged to sell Pepsi-Cola in his store's parking lot for a dollar less a case than Wal-Mart. Of course, customers had to go into the store to pay at the counter, exposing them to many of the products and services available.
“It takes great resolve and focus to come up with an advertising budget,” says Nett. “Plan for some new things, make some new ads, try some new mediums and then implement it.”
For more tips on successful showroom design and layout, visit rermag.com.