At this moment at least a few owners of rental companies might wish they were in Brazil. So they could be lounging on the beach in Rio de Janeiro watching beautiful women in bathing suits? No doubt many would like that, but another reason is the infrastructure spending plan worth close to $900 million the government of Brazil is working on.
But you're not in Brazil, for either reason, so you have to make something out of what you have. Not many people here are expecting big changes in the economy this year, so you're going to have to deal with reality as it is in your marketplace. I'm happy to see a lot of effort and determination everywhere I go.
I was, however, somewhat concerned by a couple of rental centers I passed by recently. It wasn't so much that the yards were filled with idle equipment, which was not unexpected. Of greater concern was the general slovenly appearance I observed, with a lot of junky, broken-down-looking machines sitting right by the road where people driving by could see them. Sure, everybody has broken-down pieces, but it's not too hard to put them in the back where they aren't visible.
Also I noticed signs that looked like they hadn't been painted in years, dirty and windswept and one with letters missing. Of course companies are trying to cut costs, but that is one area you don't want to skimp on. Maintaining a nice appearance is important. Allowing your yard to fall into disarray makes customers and potential customers feel that you no longer care. Whether the thought is conscious or unconscious, it still affects people and the way they perceive your business.
When I mentioned this to one rental person recently, he laughed and said I was being naïve. All those customers care about is rental rates, he contended. If they get a cheap rate they won't care if my headquarters building is a trailer with a leaky roof, he said. I have no doubt there are customers who feel that way, but I still argue that you do everything in your power to maintain and even upgrade the appearance of your facilities. Not only will this give customers a more positive impression of your company, but it will affect the way your employees feel about the place they come to work every day. If it seems to them that nobody cares what the building looks like, they might not care enough about the kind of service they offer.
Obviously right now money is tight, you are cutting costs, you laid people off and you don't want to pour a bunch of money into your buildings. But it might take little more than a few buckets of paint and some time. And don't just re-paint your signs. Paint the buildings and paint the equipment as well while you're at it. At least give off the feeling that your equipment and your company is ready to come to work every day, and give your employees incentive to try harder to get whatever business they can bring in. Believe in yourselves, believe in your service, believe in what you can offer your customers, even if the phone isn't ringing as it should and all customers seem to care about is cheap rates. Give them reason to care about something more.
Take a look at Lucy Peterson's cover story about “diversification” — a recent trend in some other countries, especially the U.K., where construction companies have acquired rental companies to have their own in-house equipment provider. While there have been only a few instances of this type of model in North America, I'd like to see closer relationships between rental companies and contractors. I'd certainly like to see more rental companies look for exclusive sole-source provider relationships with contractors, even creating mini-yards with trailers at jobsites. A number of rental companies have used this technique to great effect and if done right can give your company an edge.
Another article in this issue that deserves some attention is our interviews with earthmoving manufacturers. Every one of the manufacturers we spoke to talked about the dramatic impact Tier-4 regulations are going to have on their business in the coming years, an impact that will transform the way equipment and engines are manufactured and will have significant effect on rental companies, the kinds of fuels you use, and the way equipment functions. We'll be offering you a lot more information about Tier 4 in the coming months, so stay tuned for that.
