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Recently, Michael Roth, Editor in Chief, RER Magazine, invited Alert President Rob Ross to participate in a round-table discussion with selected rental software executives. The full article will be published in the July 2013 issue of RER Magazine. Here is the full text of Rob’s answers to Michael’s questions (in blue italics).

What is new technologically with your company’s software? What are the newest features and benefits you’d like to share?

The mobile revolution continues to drive trends in our industry, from the use of tablets and smart phones, to ‘paperless’ systems for document-handling and signature capture, to transportation and equipment tracking efficiencies.

Alert’s latest innovations reflect the demand for even more mobile and paperless solutions. Alert has been growing its portfolio of Mobile Apps, including last year’s (2012) RER Innovative Product Award Winner, Mobile Inventory Manager, which offers the ability to conduct a (paperless) physical inventory of assets using smart phones or tablets.

In a previous annual revision, we made a fundamental technology change: We changed the way we store, log, and deliver all rental documents to .pdf format. This change set the stage for compatibility with off-the-shelf Apps (which many of our customers are using) as well as development of a slew of new features and products that are now available with our latest annual release (Version 15). Here are some highlights:

Dispatcher Dashboard is our new ‘Virtual White Board’ that lets the dispatcher drag-and-drop tickets, trucks and staff to planned routes with ease. The driver gets route-specific reports, maps, and tickets all in the correct order via one click of an e-mail button. A truck-mounted GPS system is uploaded with route instructions with one click. Route planning includes the ability to add additional staff, incorporate lunch breaks, return to warehouse in mid-route, and more.

Dispatcher Dashboard revolutionizes the way rental dispatchers manage equipment transportation. It’s easy-to-use ‘Virtual White Board’ allows the user to visualize and ‘drag-n-drop’ everything, from equipment to drivers and staff to lunch breaks.

Sign&Rent is our new web-based signature capture and contract management system which allows the driver to collect a ‘digital signature’ on-site, or, if no one is available on-site, by calling the customer’s office or emergency contact. The customer can sign on any device, including a smart phone or a Windows PC. So this means, you will always get a signature before your driver leaves the site: No more blind drops! A web-based version of the rental contract is stored and displayed from a secure server, so the ticket is actually being signed in ‘real-time’, vs. depending on e-mail for delivery. Confirmation copies (in .pdf) are automatically e-mailed to the customer and filed in Alert EasyPro for easy retrieval from within customer and contract records, eliminating time-consuming manual processes, such as combing through e-mails and organizing files of signed attachments.


Sign&Rent lets your drivers collect signatures via tablet or smart phone, using a ‘live’ version of the contract on a secure server. So this means, the contract is approved in real-time, without having to wait for e-mail confirmation. The signed (.pdf) tickets are automatically sorted and stored in the correct customer and contract record in Alert, for easy retrieval and management.

-GPS Equipment Tracking re-launches our GPS integration for collecting meter readings and locating equipment in the field. Our system has been re-written for the AEMP Telematics Standard. Our first systems in the field will be integrated with Topcon Tierra, the world leader in equipment tracking via satellite.


Using Alert EasyPro’s integration into TopCon Sierra, the system pings your equipment every night for the current location and meter reading. Alert’s Cycle Billing System helps you keep up with charges for usage with each billing vs. trying to collect a huge bill all at the end. Alert’s job address field now accepts longitude and latitude, along with a link to your favorite web-based mapping system, so in a couple of clicks you know where all your equipment is located at all times, even when it’s located in an oil field or a new subdivision.

What are some of the key features you find your rental customers are asking for?

If this is any indication, this year’s International Alert User’s Association Conference (IAUA, November 6-8, 2013) is titled: “Re-Inventing the Wheel: IAUA Profitability and Mobility Conference”. Our customers are seeing the value of re-thinking even basic processes to take advantage of relatively inexpensive mobile technology, wherever it makes sense to the bottom line. At the IAUA Conference, our 28th, rental business owners have a chance to see what their peers are doing as well as work with Alert programmers and staff, providing their own input and ideas for technology improvements. We expect this year’s conference to be especially fruitful for our customers and for us.


Alert’s 28th Annual IAUA Conference is November 6-8, 2013. Attendees learn from their peers as well as ‘take the wheel, steering Alert Management Systems in the right direction, through voting on features, advisory councils, round-tables, and more.

What are some of the capabilities and trends you think will be driving the industry forward in the coming years?

Inexpensive mobile technology makes it easier to get the right equipment in the hands of your customer and to know exactly which serialized units they have. Alert’s new QuipScan software offers the ability to use simple wireless bar code readers to load and unload serialized equipment, eliminating the need to select a particular unit at the front counter or to document the selection of the actual unit picked in the yard or warehouse. QuipScan uses a standard laptop or PC in the loading area as the home base for the bar code reader. No specialized mobile computers, tablets, or cellphones are required. Zap it when you load it (or unload it) and all the work is done.

What is new (if anything) in the kind of reports you offer your customers and what are the kinds of reports your customers are most likely to take advantage of?

We are expanding our ReportShare service, which is our web-based service to allow our customers to freely share custom reports they have written. (As far as we are aware, this is still the only ‘free-ware’ software service in our industry.) In addition to adding more customer-written reports, we are expanding it to include ‘Custom Dashboards’, written using our Dashboard Generator.

This product allows you to create complex Excel Spreadsheet models and refresh the appropriate data cells in real-time, pulling directly from Alert EasyPro, without having to manually transpose the data. One application of the concept is to combine several ‘daily’ or ‘monthly’ reports into one easy-to-interpret spreadsheet model, which can include charts and graphs and allows an end-user to routinely accumulate (and save) additional calculations for analysis purposes.

For one of our customers, who has 8 stores, we are streamlining the daily reporting process down to a single Excel-based model with a ‘Totals’ page and separate tabs for each store with all the latest financial details. This saves a tremendous amount of time and gives a clearer and more accurate picture of performance, all in ‘real-time’.

Anything new in the area of customer interface for rental companies, that is, the kinds of services they can offer electronically to their customers? And what services are you finding rental companies are using more in interaction with their customers, i.e., billing and paying online, the ability to order and reserve equipment online, the ability for the rental customer to access their accounts, etc.?

Rental businesses continue to expand the services available to their customers through their web sites, including Customer Portal capabilities, offering direct access to customer accounts and rental documents via secure credentials. In addition, we have introduced ‘Alerts’ to warn customers of overdue contracts and other conditions. Using our Report Publisher program, you can schedule reports to be sent automatically via e-mail to your customers as a service, such as a listing of all the equipment on the job site for the week.

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According to IHS Global Insight, the world’s leading economic forecasting authority, the United States Equipment Rental Business is growing four times faster than the general economy.

In 2012 rental revenue reached $31.3 billion, up 9.2% from 2011 and up 16.8% versus 2010 when rental revenues of $26.8 billion reached a low point in the midst of the great recession.

In 2013 rental revenue is expected to reach $33.6 billion, up 7.3% versus 2012.

2014 rental revenues are forecast to be $36.7 billion, almost equal to the $36.9 billion record level seen in 2007. By 2017, revenues are expected to reach $46.3 billion, well above the previous high.

This growth has been fueled by an increase in rental penetration as both consumers and businesses have discovered that it is less expensive to rent than to buy. As a result, more and more equipment is being manufactured for the purpose of rental. Another factor impacting the future growth of the category is the currently pent up demand for housing. All during the recession the population continued to grow and new households were formed, but many of these new households did not live in their own housing, preferring instead to live with relatives and others. Eventually this pent up demand will materialize in new construction which will further drive the growth of our industry.

2013 Rental Industry forcast

Source: May 9, 2013 Forecast Update by IHS Global Insight

Looking at the major sub-segments of the category, IHS Global Insight forecasts the following:

• Construction and Industrial Equipment Rental revenue will reach $22.5 in 2013, up 8.4% from 2012. By 2017 revenues will reach $30.9 billion, up 48.6% versus 2012

• General Tool Rental revenue will grow to $8.5 billion, up 5.8% versus 2012. By 2017 revenues will reach $12.6 billion, up 55.6% versus 2012.

• Party & Event Rental revenue will be $2.5 billion in 2013, up 2.5% versus 2012. By 2017, revenues will be $2.8 billion, up 16.7% versus 2012.

Local Metro Area Data now inexpensively available through the ARA. Alert Management Systems recommends that rental store owners purchase this new local market data through the American Rental Association (ARA).

We believe this local data, which is updated and provided online each quarter, is critical for putting together realistic business plans for 2013 and beyond. After all, it is impossible to set realistic goals without knowing the environment in which a company competes. For each Metro area, the following data is provided for 2010-17:

• Construction and Industrial Equipment Rental Revenue
• General Tool Rental Revenue
• Party & Event Rental Revenue
• Total Rental Revenue
• Real Gross Metro Product
• Real Total Construction Revenue
• Total Retail Sales
• Total Employment

For $100 per year ARA members can purchase the national data. State and local major metro area data is available for only an additional $100 per state.

This information is available through ARA’s State of the Equipment Rental Industry Outlook 2010-2017 online Market Monitor, compiled by IHS Global Insight. For more information, go to www.ARArental.org/go/research or call ARA at 800-334-2177, ext 282.

(Note: This is one of a series of blog articles that will appear here frequently. All the blog articles focus on ways to improve rental operators’ profitability. All the ideas are based upon the proven experience of our most profitable rental operators. Return here often for additional proven business enhancing ideas. We welcome your comments.)

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See all of Alert’s exciting new Money saving Enhancements at this year’s Las Vegas ARA Show February 10-13 (Booths 627 & 3965), including:

RER Award Winning Mobile Inventory Manager. Save time and money with this new paperless system for using smart phones and tablets to conduct a physical inventory of rental assets. No hardware or downloads. Use any smart phone with a web browser.

Sign & Rent. Provides a paperless tablet or smart phone based solution for remote signature capture.

Mobile Reports. Provides instant access to pricing, customer information and equipment availability.

Graphical Dispatcher Dashboard. Organize all your transportation resources through a new colorful graphical console. Instead of printing and shuffling tickets to create routes, do it all on one screen using ‘Drag and Drop’. You can even go paperless, through e-mail and mobile devices. Setup routes in seconds by dragging and dropping tickets, drivers and staff. When you are ready to roll, click one of the five buttons at the bottom of the route to instantly print or e-mail delivery tickets, create maps, and more. Integrates to GPS Dispatcher Pro (below).

GPS Dispatcher Pro. This product will further increase your transportation efficiency and reduce costs. Send truck routes to truck-mounted GPS equipment automatically.

• Provide reliable hands-free navigation
• Send your drivers on the shortest routes
• Save time and money with instant delivery of truck routes to Garmin GPS devices
• Reduce driving errors; monitor stops and performance criteria
• Take advantage of automated reporting right to your Email box

Ticket Merge. This product makes it easy to solve complex invoicing and delivery challenges. For example: Merge multiple delivery tickets for multiple days or job sites into one invoice for billing.

QuickBooks A/P Integration. This product allows Alert Purchase Order System users to update QuickBooks A/P automatically. The interface even handles partial receipt of goods. COPY PO offers a quicker way to handle recurring purchases and other common purchasing problems.

Others. Ask about Dynamic Kit Pricing, Group Rental Rates and other exciting new features.

Win a New 40” LED TV. The only requirement is to fill out a one-minute survey at either of the two Alert booths: #627 (General Tool/Homeowner area, next to the ARA booth) or #3965 (Party/Special Event). You must be registered for the show as a rental store owner or employee to qualify. The offer includes free (ground) shipping anywhere in the continental US and Canada.

Tom Ross, Alert CEO, is moderating the panel discussion on “Accelerating Your Growth With an Effective Sales Team,” 9:00-10:15 AM on Saturday, February 9.

Alert is a Silver Sponsor of this year’s ARA show, sponsoring both the Region 7 Reception and the Tents & Events Educational Seminar.

Alert Management Systems is a leading supplier of Microsoft Windows® certified rental management software. Along with award-winning new technology, Alert provides expert support for thousands of end-users who write millions of rental contracts annually. Founded in 1976, Alert does business in 50 US States, Canada, and the Caribbean Islands.

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Direct from the 2012 International Alert Users Association Conference, Tom Ross, Chairman/CEO of Alert Management Systems, shares with members of the IAUA a presentation on behavioral interviewing techniques that will increase long-term hires. This is an essential presentation for members of the IAUA, users of Alert Easy Pro Management Software, and executives seeking to improve the quality of their workforce.

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Instead of waiting until the end of the month to send out invoices, send the invoice on the day after which the cost of the rental will no longer increase even if the renter holds the equipment until the end of the month.

For most rental companies using typical rate cards, this happens around the 17th day of the month. Once the renter has held the equipment for about 17 days, the charge for the month will not increase further even if the renter holds the equipment until the last day of the month.

In Alert EasyPro’s system, as soon as all the items on a contract have reached the point where no further charges will be due for the month, the optional “Smart Billing” feature will select the ticket for possible invoicing. You still get to decide whether to send it out now or later.

Experience shows that the faster invoices are sent out, the faster the cash comes back into the store! So use “Smart Billing” and send out invoices early. Your cash on hand will increase and you will be in a better position to meet all your obligations (especially those to yourself!).

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The economy is at best holding its own. The Rental Business is improving, but far from enjoying the robust revenues and growth of years past. Today’s competition is fierce, perhaps more so than ever before. As a result it is critical to rise above our competitors if we are to enjoy healthy growth and profitability.
 
Alert Management Systems recently announced the agenda for the 2012 Annual IAUA Profitability Conference, “Rise Above the Rest,” to be held November 8-10, 2012, at the Antler’s Hilton Hotel in Colorado Springs.
 
2012 marks the organization’s 27th consecutive annual conference. The IAUA is the rental industry’s largest and longest-running association of computer system users, led by its own elected Advisory Board.
 
In addition to networking with other successful rental business operators during the 3-day program, IAUA members will enjoy a packed agenda of educational seminars and round-table discussions focused on growing revenues and profits in today’s difficult economic climate. The schedule also includes voting for software improvements and participation in Advisory Councils by market segment, including a council just for party rental specialists. Click here to see the full agenda and descriptions of all the classes and presentations.
 
This year’s Keynote Speech, titled “Rising above Challenge, Change and Adversity” will be delivered by John Register, an internationally known motivational speaker who will tell his story of overcoming a serious injury and becoming a U.S. record holding Paralympics athlete.
 
About Alert Management Systems (www.alert-ims.com, Colorado Springs, CO): Alert is a premier supplier of Windows® certified rental equipment management software across North America and several other countries. Alert is also the leading supplier of event/party rental software in the World.

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It’s the worst nightmare and it happens all the time.  Hackers are able to steal credit cards from retailers who store credit card information on their computer systems, large and small.

For example, according to SC Magazine, just one hacker, Albert Gonzalez, was recently convicted of hacking seven retailers: TJX (parent of T.J. Maxx and Marshall’s), BJ’s Wholesale Club, OfficeMax, Boston Market, Barnes & Noble, Sports Authority, and Heartland Payment Systems, 7-Eleven and Hannaford Bros. supermarket chain.   Over 100 million credit cards were stolen in the process.  Source: SC Magazine, March 30, 2010.  http://www.scmagazine.com/jcpenney-joins-heartland-tjx-as-gonzalez-victims/article/166946/

According to ARS Technica, in another case before the U.S. District Court of New Hampshire, a band of Romanian hackers are alleged to have hacked 150 Subway restaurants and at least 50 other small retailers.  The hackers are alleged to have gathered credit and debit card data from over 800,000 victims.   http://arstechnica.com/business/news/2011/12/how-hackers-gave-subway-a-30-million-lesson-in-point-of-sale-security.ars

Don’t let it happen to you.  Talk to your rental software developer today.

The best solution is a credit card processing system that does not store credit cards on YOUR computer system.  Instead it maintains them off-site in an ultra-secure “Data Vault” managed by one of the world’s largest card processing institutions (such as VeriFone), using the latest bank encryption technology.  So this means no one, regardless of security level, can download or view anything but the last four digits of your customer’s card number.  On the other hand, your store staff can still safely process any authorized charges for deposits, cycle billing, meter usage and more.

Don’t put it off.  Secure your customer’s credit card information today.  You’ll sleep a lot better tonight.

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Every rental business needs to track missed rentals in order to know when it makes sense to buy additional equipment.

In years past, rental Stores had to use paper and pencil in order to try to keep track of missed rental opportunities.  With today’s modern rental software, missed rental reports are built into the system.  The key is training to make certain that your employees are recording all the missed rental opportunities as they happen.

The most profitable rental operators make this a priority discipline.  They know that when they see a repeated loss of revenue due to a lack of certain piece of rental equipment, it generally makes sense to purchase more inventory.  In most cases, when the demand is clear, more inventory translates to more revenues and more profits.  It’s also a great way to ensure that your competitors don’t gain a foothold with your customers.  Finally, having the proper levels of inventory will reduce the need to use profit-sapping sub rentals.

The most profitable operators also find these missed rental reports to be very important when it comes time to develop their shopping lists for the next ARA Trade Show.

Call your rental software company to learn how you can start using missed rentals reports today.  It will mean more revenue and more profits while also helping to ensure you keep the loyalty of your most important customers.

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Local Market Data Now Available at Very Low Cost

According to IHS Global Insight, the world’s leading economic forecasting authority, the United States Equipment Rental Business is expected to see a steep increase in revenues over the next several years.  After bottoming out at about $26.8 billion in 2010, revenues are expected to grow 7.0% in 2012 and to reach $49.6 billion by 2016.

Global Insights Forecasting 7.0% Growth for the Rental Industry in 2012

Source:   January 27, 2012, Forecast Update by IHS Global Insights

Growth of the major rental revenue sectors is forecast as follows:

  • Construction and Industrial Equipment Rental revenue will grow 7.6% in 2012 and 81.4.0% by 2016.
  • General Tool Rental revenue will grow 6.8% in 2012 and 73.0% by 2016.
  • Party & Event Rental revenue will grow 2.5% in 2012 and 17.4% by 2016

Local Metro Area Data now inexpensively available through the ARA.

Alert Management Systems recommends that rental store owners purchase this New local market data through the American Rental Association (ARA).

We believe this local data, which is updated and provided online each quarter, is critical for putting together realistic business plans for 2012 and beyond. After all, it is impossible to set realistic goals without knowing the environment in which a company competes.  For each Metro area, the following data is provided for 2008-2015:

  • Construction and Industrial Equipment Rental Revenue
  • General Tool Rental Revenue
  • Party & Event Rental Revenue
  • Total Rental Revenue
  • Real Gross Metro Product
  • Real Total Construction Revenue
  • Residential Construction Revenue
  • Non-residential Construction Revenue
  • Total Retail Sales
  • Population Ages 25-54 and 55-64
  • Total Employment
  • Construction Natural Resources and Mining Employment
  • Manufacturing Employment

For $100 per year ARA members can purchase the national data.  The cost for your first local metro area is an additional $50 which includes all three segments.  Additional metro areas can be added for $50 for one rental segment, $75 for two or $100 for all three. Additional discounts apply when multiple metro areas are purchased.

This information is available through ARA’s State of the Equipment Rental Industry Outlook 2009-2016 online Market Monitor, compiled by IHS Global Insight.  For more information, go to www.ARArental.org/go/research or contact Tracy Johannsen at tracy.johannsen@ararental.org or 800-334-2177, ext. 270.

(Note:  This is one of a series of blog articles that will appear here frequently.  All the blog articles focus on ways to improve rental operators’ profitability.  All the ideas are based upon the proven experience of our most profitable rental operators.  Return here often for additional proven business enhancing ideas.  We welcome your comments.)

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If you have been thinking about social media as a big distraction, you are not alone.  I have been guilty of the same thing.

Like it or not, however, social media is here to stay and we ignore its potential only at our own great peril.  This article will explain why social media is becoming so important to the rental industry.  It will also provide some ideas on how to get started on the right foot.

Evidence of the Importance of Social Media.

The four big players are Facebook, Twitter, You Tube and Goggle+.

All four of these social media outlets have experienced exponential growth over recent years, and predictions for 2012 show that this trend is set to continue. In January 2010, Facebook reported 350 million users, and just one year later this figure rose to over 500 million. In January 2010, Twitter reported 75 million active users. By 2011 the company experienced a 250-percent growth, with over 175 million users. Google+ is still a relatively new platform and one that is growing rapidly.  By the end of this year Goggle+ is predicted to have over 400 million users.

Facebook, Twitter, YouTube, Google+: Four huge players, but which one is right for your rental company?

If you are new to social media, it is a good idea to create personal accounts on all four platforms prior to launching your rental company’s campaign. Get comfortable and confident using this technology. Learn how to monitor, post, and interact with other users.

All four platforms are worthwhile avenues for exploration. Twitter and Facebook are great places to start because they are easily accessible via smart phones and other mobile devices and very easy to monitor. Twitter is very effective for posting quick links and product information updates.

United Rentals, Inc. is a noteworthy rental company currently using all aspects of social media to their advantage.

United Rentals, Inc. has been working with the award-winning television show Extreme Makeover: Home Edition for over four years. They regularly use Facebook and YouTube to post snippets of the show to keep their followers engaged and to also showcase the heart of the company to their customers. Undoubtedly, United Rentals is in a position of considerable leverage, but this example of using social media to show the human side of a rental operation can, with some creative thinking, be adapted to your own online marketing campaign.

Manufacturers are also creating viral video – see JCB’s dancing diggers video that helped bring new enthusiasm into the brand. See http://www.youtube.com/watch?v=uFBAzRc5vXE

Currently, the number of rental companies using Google+ is rather insignificant, and those that currently have a presence there are not making it the focus of their marketing efforts. This is expected to change.  Marketing experts predict that the Goggle+ audience will grow significantly. Once it does, it will be interesting to see how rental companies use this new audience to their advantage.

The First Step

Before you launch your social media campaign, investigate how your peers are using it to their advantage. This does not mean strictly limiting your research to peers in our particular field. Take a look at a range of innovative companies you admire and examine how they are approaching the challenge of engagement, interaction and ultimately, increasing conversions. Pay special attention to design and tone of voice. You will note that a number of high-end organizations actually use a conversational voice and with good reason, the essence of social media is interaction and a conversational tone inspires users to interact.

Create Something Worth Sharing

Social media is more than just a marketing platform. A common mistake for a company new to social media is to use the platform to only list their operations and products. Instead of simply announcing a new machine or product to your fleet, interact with your customers and focus attention on the solutions the new item can provide.

For example, if you specialize in the special events industry and you are adding a new tent to your fleet, time the announcement to take place during graduation season and pose a stimulating question. For example, “How many graduates do you think you it is possible to fit into this tent?” If you follow this up by answering the question with an infographic or a humorous viral video of graduates trying to cram into the tent, you have content that potentially will be shared throughout the social media community and ultimately drive more business to your operation.

What about the Down Side of Social Media?

Some rental companies refrain from using social media because they are concerned with the fact that it provides a platform for potentially negative comments and questions regarding their business. But it is universal opinion in the public relations field that it is better to know what your detractors are saying than being unaware of your faults.

If you receive some negative feedback, find unique and compelling ways to resolve any dissatisfaction or complaints you may receive. If you address any issues regarding your service or quality in a unique and honest way, you will find that you will actually gain the respect of the detractor rather than losing any additional clientele.

Become more actively involved in the rental industry

Social media does not have to exclusively revolve around a client base. Many rental companies are using social media to keep up to date with the rental industry as a whole. Following new projects, trends and other industry insiders, will give you valuable information that you can use to engage your client base.

Reaching out to your suppliers can also help you stay abreast of their latest product launches, promotions and improve your business relationship. Actively involving yourself in your suppliers’ social media can also give you the opportunity to discover what products your competition is using and how successful their endeavors are.

“Liking” your rental suppliers on their own social media sites can involve you in conversations as an authoritative resource and give you the opportunity to answer any relevant questions their customers may have about products you currently use. Gaining you respect from your peers and new potential customers.

Real Time Marketing

People involved in social media demand real time interaction, so be aware of this before you launch your social media campaign. A well-executed campaign can do more than simply show the face of your company; it can also show your heart. But if you do not allocate a reasonable amount of time to your social media endeavors, a social media presence can actually do you more harm than good. People expect immediate answers to questions and queries and if a customer has to wait days for a response from you on a social media platform, this will most likely lose you business.

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A recent survey conducted by Hubspot, compiled using data from the US Census Bureau, PEW research and Blogher, shows with convincing evidence, just how powerful a business blog can truly be.

This article will provide you with both compelling proof that you need to add a blog to your website as well as several thought-starter content ideas that you can consider putting into your blog.

Why is a Business Blog so Valuable to a Rental Company?

Search engines value fresh content:

Higher search engine rankings generate increased conversions and new leads interested in your products and services. Fresh content updated on a regular basis will consistently lead to higher rankings than competitors with older content.

Furthermore, when search engines see that content is being added frequently to your website, they will be more likely to return on a regular basis and index your new content into the search engines at a faster rate.

The business blog statistics are impressive:

*Businesses that blog 20 times per month, generate 5X more traffic and 4X more leads than those who blog infrequently.

*B2B businesses that generate a blog attract 67% more leads every month than those who do not.

*65% of Internet users read a blog

*46% of Internet users read more than one blog a day

(Source: 100 awesome marketing stats, charts and graphs hubspot.com)

You can easily syndicate and share within your Industry:

Because many blogs, including this one, can be subscribed to via RSS feed and email, you have the opportunity to share valuable information immediately amongst your peers and your clientele. Search engine algorithms utilize sharing, views and content popularity as essential components in determining the ranking of your business blog. Creating engaging information will naturally lead itself to being shared and receiving inbound links. Social media also plays a vital role in this sharing process.

*Blog posts shared on twitter get 113% more inbound links than those not shared on any social media platform.

*Blog posts shared on Facebook and Twitter receive 149% more inbound links than those not shared on any social media platform.

(Source: 100 awesome marketing stats, charts and graphs hubspot.com)

What Should You Put into Your Blog?

Your blog is an opportunity to indirectly sell your products and services by providing helpful information to your customers and prospects. Your customers and prospects expect you to be touting the advantages of your products and services throughout the rest of your website. Your blog is your opportunity to be truly helpful to your customers and thereby gain the most important thing of all – their trust and confidence.

For example, your blog can include articles on how to do certain repair or construction jobs. In the Party/Event world you could include ideas on how to make your customers party the talk of the neighborhood.

Your blog can also include articles on how to judge the effectiveness of certain tools or equipment.

Similarly, your blog can include articles on how certain tools can make jobs easier to complete successfully.

The possibilities are endless all you need to do is start with your customers needs and lack of knowledge and then provide them with solutions they will value.

We would love to see the articles you include in your blog and learn about the success they have brought you.

Engage and Interact With Your Readers

Having the facility to allow your readers to comment on your blog platform grants you the opportunity to hear the voice of your customers, answer their questions and provide clarification. Future visitors will see that you are invested in these discussions and perceive you as a savvy business owner who cares about their customers.

But allowing comments from readers can potentially invite web spam to your business blog. If you are using WordPress, arguably the industry’s most popular blogging platform, there are plugins, such as Akismet, that allow you to monitor comments and manually approve them. This is a recommended tactic, because a business blog that is riddled with spam comments will quickly lose all authority.

Have you noticed a significant ROI since launching a business blog? Have you successfully generated new leads from comments and views?
Tell us your stories here.

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Every CEO knows that there is nothing more important than his relationship with his current customers. Considering the cost of acquiring new customers, repeat business is by far the most profitable business we have. And our best customers are also are best salesmen. Nothing is more important for new business than strong referrals.

But how can we be sure that our relationships with current customers are as strong as they need to be? The surest and best way is to do a regular monthly survey among all your current customers. We send an email to all our customers each month. In the email is a link to a simple five question survey that is provided by a service called Zoomerang. Zoomerang does all the work and provides useful summary reports. Their fees are very reasonable (less than $25 per month for hundreds of surveys).

You can also use this same monthly email to provide helpful advice or announce a special promotion.

The mere fact that your customers receive your survey tells them you care. The responses to the survey tell you exactly where you are strong and where you need to do some remedial work. Sometimes you’ll get rave reviews and nice notes. Post these on your bulletin board to reinforce the behavior you want from your associates. Post the complete results on your website and your customers will know you are serious about taking care of your customers needs. We post updated results every quarter.

Ask your rental software company to help you get started with an email list from your own records.

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Thinking of buying some new equipment for your rental fleet?

Check out Auction Equipment first. The internet is loaded with listings for equipment being offered at auction. According to our clients who have taken advantage of equipment offered for sale at auction, like-new equipment can be purchased at dramatic savings. All it takes is a little research.

Here’s the address of one website that offers scores of auction sites throughout the United States: http://www.rockanddirt.com/

Happy shopping!



Tom Ross
Chairman’s Corner
Alert Management Systems
719-359-0944
tross@alertms.com

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Revenue Forecast Update:
Global Insights Forecasting 5.6% Growth for the Rental Industry in 2011
Local Market Data Now Available at Very Low Cost

According to IHS Global Insight, the world’s leading economic forecasting authority, the United States Equipment Rental Business is expected to see a steep increase in revenues over the next several years. After bottoming out at about $26.6 billion in 2010, revenues are expected to grow 5.6% in 2011 and to reach $44.5 billion by 2015.



Source: April 7, 2011 Forecast Update by IHS Global Insights

According to IHS Global Insights’ latest forecasts, total U.S. Equipment Rental Revenue will grow 5.6% in 2011 and 67.3% by 2015. Growth of the major rental revenue sectors is forecast as follows:

• Construction and Industrial Equipment Rental revenue will grow 6.8% in 2011 and 73.0% by 2015.

• General Tool Rental revenue will grow 3.1% in 2011 and 68.5% by 2015.

• Party & Event Rental revenue will grow 4.4% in 2011 and 13.0% by 2015

Local Metro Area Data now inexpensively available through the ARA. Alert Management Systems recommends that rental store owners purchase this New local market data through the American Rental Association (ARA).

We believe this local data, which is updated and provided online each quarter, is critical for putting together realistic business plans for 2011 and beyond. After all, it is impossible to set realistic goals without knowing the environment in which a company competes. For each Metro area, the following data is provided for 2008-2015:

• Construction and Industrial Equipment Rental Revenue
• General Tool Rental Revenue
• Party & Event Rental Revenue
• Total Rental Revenue
• Real Gross Metro Product
• Real Total Construction Revenue
• Residential Construction Revenue
• Non-residential Construction Revenue
• Total Retail Sales
• Population Ages 25-54 and 55-64
• Total Employment
• Construction Natural Resources and Mining Employment
• Manufacturing Employment

For $100 per year ARA members can purchase the national data. The cost for your first local metro area is an additional $50 which includes all three segments. Additional metro areas can be added for $50 for one rental segment, $75 for two or $100 for all three. Additional discounts apply when multiple metro areas are purchased.

This information is available through ARA’s State of the Equipment Rental Industry Outlook 2009-2014 online Market Monitor, compiled by IHS Global Insight. For more information, go to www.ARArental.org/go/research or call ARA at 800-334-2177, ext 282.

(Note: This is one of a series of blog articles that will appear here frequently. All the blog articles focus on ways to improve rental operators’ profitability. All the ideas are based upon the proven experience of our most profitable rental operators. Return here often for additional proven business enhancing ideas. We welcome your comments.)

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Think about it, a 10% Damage Waiver is likely to result in an 8% increase in overall revenue and it all falls to the bottom line.  If you are currently making an 8% pre-tax profit, implementing a 10% Damage Waiver program is likely to double your profits to 16%!

How Much Should You Charge? The next question is how much to charge for Damage Waiver.  In my meetings with several State ARA associations over the last year, I asked participants to raise their hand if they charged 6% or more.  Most hands went up.  I then asked them to keep their hands up if they still answered in the affirmative as I raised the percent.  When I got to 10% less than half the hands were still up.  When I got to 15% only a few hands were still up.  When I asked those with the highest rates what happened when they made their last increase, they replied “Nothing, the additional money fell to the bottom line.”

The point is that at a minimum you should consider charging at least 10%.  If you are already charging 10%, I recommend that you try increasing it in increments to 12% and then to 15%.

Bottom Line: If you do not have a Damage Waiver program currently you should consider implementing one immediately.  Furthermore, if you are not charging at least 15% you should consider increasing your current rate incrementally until you either hit resistance or achieve the 15% level. Experience has shown that in the vast majority of cases you will not hit significant resistance, even at the 15% level.

Implementing a Damage Waiver Program: Consult with rental professionals who have successfully implemented a profitable Damage Waiver program.  Review the programs of your close competitors.  Then have your lawyer bless it.  What will be covered and not covered under this program needs to be clearly spelled out.  The contract language should also make it clear that customers may opt out of the program under certain circumstances. Finally, it is important that customers signify their written agreement to the program.  This can all be handled by a correctly constructed contract form, little if any conversation will be required at the counter.   (Lots of contract examples are available online via Google; simply search “Damage Waiver.”)

When questions arise, one thing to train your people on is how to describe your Damage Waiver program.  It provides great peace of mind for your customers.  But it is important to recognize that it should not be called insurance.  Rental companies are not licensed or regulated as insurers. Rental companies treat Damage Waiver as a Waiver of the right to make the renter pay for damage to the equipment.

For further information on implementing a Damage Waiver program, we recommend the Q & A article by Dick Detmer on the ARA website:  http://www.ararental.org/HomeWrong/DickDetmerARAAdvantageNov_Dec09.aspx

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Cutting Cost- Going Seasonal

Many small rental businesses have a busy and slow season. In general, busy season picks up with the weather especially for businesses working with heavy equipment rental. Accordingly we recommend that our rental operators staff to their lowest level of seasonal demand and then use seasonal labor to meet the high demand periods.

Not only does working with seasonal employees cut operating costs, but it provides a great resource if you need to add another full time employee to your company. Consider a seasonal position as a 3-4 month interview period. Seasonal employees are also a great resource to fill in the holes many small businesses encounter when their busy season comes.

When looking to hire for a busy season, it’s important to identify the areas in which you’ll need the most help. When you know where you need additional help, you’ll be able to start the interview process with certain skill sets in mind.

A good place to find seasonal employees is in your own company. Consider hiring part time employees to be full time seasonal employees. This will cut the training process and you will be working with someone you have confidence in. Utilizing their experience to train new seasonal employees is also a cost effective solution.

Since the downturn in the economy there is a vast wealth of people looking for work, however it is important to start the hiring process early so whomever you bring on can be trained and ready to start working when you get busy. Teachers and college students provide fertile territory for seasonal employee needs. They can also be counted on to return for a few (students) or several (teachers) years.

Always keep an eye out for potential seasonal employees and pay attention to industries with an opposite busy season, such as the winter sport industry. Many ski resorts staff for the winter season, so there are many people looking for spring and summer work once winter starts winding down. This is also true for winter outfitters and guides.

Seasonal employment is cost-effective and stress reliving. It is one of the most important concepts in achieving fair profitability in the rental business.

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With the substantial growth in online business there are now a number of companies that allow users to sign, track and store documents using the internet.  It’s a great fit for Rental Software that has built-in electronic document management capabilities, such as automated faxing and e-mailing contracts.

RightSignature, EchoSign and DocuSign are all companies leading the way in electronic document management. The most prominent company is DocuSign. They claim a 75%+ market share with over 40,000 customers. DocuSign warrants full compliance with state and federal electronic signature laws.

All three companies work online in a similar manner. Going through the service providers’ website, the rental company simply attaches their own file to be signed by the client, enters the client’s e-mail address and an optional message. When the client receives the e-mail they are directed to the provider’s website to review and sign the document electronically. After signing the document electronically, the client e-mails the contract back to the rental company who then receives the signed PDF to be saved or printed.  The service provider also securely stores a copy of the document on their site.

Costs are reasonable and depend on the number of users required.  DocuSign has a basic 1-10 user system with allowing unlimited usage, mobile signing capabilities and signing reminders which costs only $19.95 per month per user.  The more standard system includes mobile signing capabilities and signing reminders.  The standard system for 1-10 users costs only $24.95 per month per user and adds multiple signing routing, templates and other capabilities. We believe that most rental operations can get by with one or two designated users per store.

DocuSign’s website is www.docusign.com.   A free trial is available.  For systems having more than 10 users call 1-866-219-4318 for special pricing.  Jamie Wiecks, Account Executive, can be reached directly at 206-576-8058 (office) and 206-250-0444 (mobile)

Also see:  www.rightsignature.com (1-877-324-6744) and www.echosign.com (1-877-324-6744).

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Credit card transactions are an important and generally growing part of the way rental stores do business today.  It follows that they have become a significant part of the cost of doing business.  They also have the potential to do significant damage to rental businesses.   Discussed below are some proven strategies for both significantly reducing the costs associated with credit cards as well as ways to reduce the risks of fraud which can result in large losses.

Reducing Credit Card Processing Costs.
It is imperative that rental businesses conduct competitive bidding processes at least once every three years – more often is better.  It is really quite simple to do.  In fact, you can get a third party to do all the work for you.  All you need to do is hire a reputable Broker.
The broker will ask to see your current credit card statement.  The first thing he or she will do is compute the actual rate your current vendor is charging you; this may be different than you are currently being told.  Second you will be told if a lower rate can be obtained for you.  With your agreement he or she will take your current plan to several different merchant banks and ask them for a bid. When the lowest cost merchant bank is identified,  the broker  will calculate the savings you can expect and ask you if you want to switch.  Many of our clients have reaped very large savings from this process; some have saved many thousands of dollars per year.
I am guessing that there are many reputable Brokers who can perform this review for you.  Many of our clients are currently working with a company called Approval Code; their representative’s name is Kirk Moore.  He can be reached at (800) 535-6233. (As a matter of principle we do not accept kick backs from vendors.)

Protecting Yourself From Charge Backs.
As the use of credit cards rises, so too do consumer claims involving credit cards.  Some claims are honest and legitimate.  Others are fraudulent.  They are all potentially damaging to a small business owner.   Credit Card Insurance (Errors and Omission Insurance) is one way to help protect your business.  This approach is discussed in greater detail below.  Short of insurance, however, there are several important business practices that you can adopt to prevent or at least minimize consumer claims.

Practice safe credit card procedures. Many credit card companies give their customers the benefit of the doubt nowadays.  So, when a consumer claims a fraudulent charge, the credit card company quickly initiates a chargeback to the original merchant.  The way you handle credit card transactions can be a very effective defense against charge backs.  Are your employees currently practicing all of the following?
1.    Provide documentation for every credit card transaction you complete.
2.    Even when you process phone orders, make sure that your employees are completing paperwork and keeping it on file.  On the documentation, employees should make note if the sale was a phone order.
3.    When reasonable and possible, require the physical presence of the card at the time of the transaction.  A physical card-swipe or imprint is much more effective when defending your business against a chargeback.
4.    Always request the credit card’s security code on the back of the card
5.     Request a customer’s ID when they present their credit card.  Not only does this help you to ensure that the owner of the credit card is the same person using it, but it helps to raise that customer’s confidence in your safe business practices.
6.    Respond to customer calls promptly.  In the absence of a prompt return call, a customer may feel forced to call their credit card company, initiating a process that is much more difficult to reverse.
7.    Pay careful attention to payables.  Without careful attention you may not notice a chargeback, fraudulent or otherwise.

Errors and Omissions Insurance. Claims of fraudulent charges may sometimes get elevated to the point of a lawsuit.  In the event that the actions of your employees have caused the fraudulent charge, your business could be named and liable in the lawsuit.  This is a situation where Errors and Omissions Insurance, a specific type of liability insurance, can help by bearing some of the financial burden of a lawsuit.

Errors and Omissions Insurance should be your last line of defense.  It won’t solve every single problem.  The best way to determine whether Errors and Omissions Insurance is a good fit for your overall business needs is to speak to your insurance agent directly.

We welcome your feedback. Have you changed the way you handle credit card transactions?  Let us know by leaving us a comment!

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Cell phones have rapidly become a necessity in the business world.  They are no longer an expense that can be completely eliminated from the budget.  Cell phones give employees the ability to stay in touch, regardless of whether they are in the office or not.  In addition, the newest smart phones give employees unequaled resources at the touch of a button.  We in the rental business industry certainly rely on our cell phones.  I am sure that other industries have a similar dependence.

For all of these reasons, I do not consider simply eliminating cell phones a feasible option.  However, I would review how much is being spent on the current cell phone plan and look for places where the plan can be changed to save money.

Here are just some areas where cell phone customers typically overspend:

  • Automated directory assistance: For convenience sake, many people choose to use the ‘411’ information option when they need to find contact information.  These calls, while convenient, are only available for a charge.  Depending on your carrier, charges can total almost $2 per call.  If you or any of your employees use this feature regularly, you might be experiencing a significant expense!  What can you do instead? Google offers a free 411 information service, available by calling 1-800-GOOG-411.  Google began providing this service to discourage people from using the internet feature of their smart phone while driving.  So, not only is it free, but it’s safe!
  • Plans including huge numbers of minutes: If you or your employees are light cell phone users, chances are that you are never using all, or even most, of your minutes.  So, you’re paying for something that you’re not using.  What can you do instead? Investigate prepaid cell phones!  The option of a prepaid phone requires you to be vigilant in your research.  Make sure to read and compare plans carefully, as some carriers may easily “hide” add-on fees.  But, you may find that paying for only the minutes you actually use reduces your cell phone related expenses dramatically.
  • Plans not meant for companies/networks: If you started your company cellphone network with just one or two phones and have since increased the number of phones within your company, there’s a possibility that you’re paying for the wrong type of plan.  What can you do instead? Some carriers have plans that are created specifically for businesses or networks of people.  These plans are generally more competitively priced than just the run-of-the-mill advertised plan.  As an example, some carriers offer companies the option to purchase a “pool” of minutes, which is made available for all the company cellphones.  Using this method may help you to provide consistent coverage for your heaviest and lightest cellphone users, but still remain in your budget.  Contact your carrier and ask if they have a plan like this that you might be able to use.
  • Your employees use “extras”: Extras are items like ringtones, games and text messaging.  Things like this have become so commonplace that some employees don’t stop to consider that if they use or download these services, they may incur hefty charges.  This is especially true if your employees use text messaging, but it is not included on your plan.  Items that are not included on your plan are charged at a per-use price, which is generally very expensive.  What can you do instead? Check your cellphone bill to see if these types of items are being used, but are not included in your plan.  Next, determine if these items are necessary for your employees to do their jobs.  Something like text messaging may be worth adding to your plan, if it helps your employees communicate.  If something does help increase productivity (and, therefore, profitability), then contact your carrier and make the necessary change to your plan.  The sooner you can stop per-use charges, the better!  If the item is not necessary, ask your cellphone carrier if there is an option to block the service or download.  Then, make your employees aware of your decision!

Changes you make to save money during a recessionary time will benefit you and your business long after the recession is over.  While it might seem more important to make money-saving decisions right now, it never hurts to examine your expenses to ensure that your money is being spent in the best way.  It is never too late to pick up habits that help to increase your bottom line!  Keep visiting our blog for more tips on how you too can increase your profitability, simply by managing your expenses to spend your money wisely.

What are some things that you’ve done to save your business money?  Let us know by sending a comment!

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Today’s economic reality is driving everyone to look for ways to save money without affecting production or quality.  We in the equipment rental software business are no different.  Our industry continually looks for cost-saving methods that will have little or no negative impact on the way we do business. Sometimes, this might mean that we have to be a little creative in our cost saving efforts.  Some of our ideas have made a significant difference in our spending, which means that our profitability increases.  And, our ideas aren’t just limited to the equipment rental industry.  Many of these ideas can be implemented for any business!  Several members of the Florida ARA brainstormed the following ideas after a recent Alert Profitability seminar:

•    Get rid of office cleaning or yard service – clean your own office or mow your own lawn
•    Review your cell phone plan and pricing
•    Check your phone, DSL or Cable plans and pricing
•    Replace paper contracts with fax or email contracts – reduce your spending on paper products
•    Are you credit card processing fees unreasonably high?
•    Change your payroll day so that it does not fall on a Busy or Peak business day
•    Check the forms and documents you use to see if you are making non-essential copies or if the forms are more expensive than necessary
•    Investigate credit card insurance to protect yourself from costly claims or lawsuits regarding mishandling credit card information
•    Remove credit cards from your available payment methods or narrow the number of credit cards you accept to the less-costly options

It never hurts to keep a close eye on your expenses.  Some of our ideas may work for you.  Others may not be the best fit for your business.  But, continually monitor your expenses and shop for opportunities whenever possible.  Don’t be afraid to ask for the best price or to inquire about promotions or specials!  Do you have a cost-cutting idea that you implemented that has benefitted your company?  Leave us a comment and share it with the community!

Over the next several weeks, we will be providing more detailed information about some of these items.  Visit our blog to get more tips about how to increase your profitability!

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Many of the most profitable rental companies have begun to experience the huge revenue generating power of the internet through their new websites.

These high profit rental operations have learned that the best way to capitalize on this revenue potential is to have a shopping cart that enables customers to browse and shop without coming into the store, often at night when the rental stores are closed.

A key question to be answered is “should I list my prices?”

Clearly there are problems with listing prices.  If the pricing does not meet the customer’s budget requirements they will likely move onto another website.  Listing prices also enables competitors to under cut you without allowing you a chance to adjust your prices to be competitive.

Unfortunately, if you do not list prices, most potential customers will simply move onto the next website.  These customers are often working at night and can’t call you.  Most will assume the worst and conclude that your prices are not competitive.

The bottom line is that our most profitable clients have learned that they must list their prices in some fashion in order to reap the huge rewards of competing on the internet.

Many successful operators simply list their prices, making certain they are competitive.  They also make it clear that they are accepting requests for reservations that must be finalized by the company.

Other successful operators, in intensely competitive situations, have learned that they must list their prices in a less specific way, clearly signaling that prices have a degree of flexibility.  Like those who simply list their prices, they also make it clear that they are accepting requests for reservations that will need to be finalized by the rental companies.  Here are four different ways that you can list your prices in a way that will not leave you so vulnerable to competitive price cutting.

  1. Quote Cart. Rename your Shopping Cart; instead call it a Quote Cart.  Display your prices, but make it clear (see point #2 below)  that they can safely assume that they may pay far less than what’s posted, giving them a sense of security and the encouragement to browse freely.  Make sure that customers understand that there is no immediate purchase or agreement on their part to complete the transaction until after a reasonable quote has been made, reviewed and agreed upon. This will become especially useful in situations where there is a lot of inventory being rented.
  2. Pricing Disclaimer. Add a vague sentence that suggests that your prices are to some degree negotiable.  For example, “Ask about how you can earn Special Discounts.”  This may enable you to begin a conversation with the potential customer who would otherwise be turned off by your regular pricing; through this conversation you maybe able to arrive at a price compromise that will enable you to win the business.
  3. Log-In Pricing. In some instances, it’s smart not to display prices in your search results, since customers may not visit your website if they are greeted with pricing that doesn’t fit within their budget.  A good way around this is to not display prices unless a customer is logged in. The act of registering to log in often puts the customers in a state where they would rather browse than move on to another site, as they have already put forth some effort. Importantly, this also gives you the ability to follow up with deals and specials to help entice new customers who chose not to use your service after visiting your website.
  4. Category Pricing. Instead of going into detail item by item, it may be more feasible for you to assign each category a simple price range. For instance, dining ware sets could be priced at $5-$15/event.  This would allow a wedding planner, for example, to make sure that the dining ware sets are within the budget.  But, the customer won’t be scared off by directly stating the higher prices for the higher quality inventory.  Itemized pricing can be worked out once the entire order is reviewed.

In a nutshell, listing prices is the only way to stay current in a market where a growing number of potential customers will insist on browsing your inventory online before coming to your store.  Most customers will not stick around if they can’t price compare.  But, providing concrete prices can also lose potential sales. Be smart and use intelligent ways of providing the information while being clear that your prices are manageable and that your service is unparalleled.

One thing is certain:  a good customer experience is the most important piece of the e-commerce puzzle.  So, make sure that your online inventory is clearly labeled, well photographed, and competitively priced.

This is an evolving area where new ideas and strategies are being tried regularly.  The ultimate ideas on website pricing may not have been discovered yet.  As always I would welcome your additional ideas and experiences.

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(This is the second in a series of blog articles that will appear here frequently.  All the blog articles will focus on ways to improve rental operators’ profitability.  All the ideas are based upon the proven experience of our most profitable rental operators.  Return here often for additional proven business enhancing ideas.  We also welcome your comments.)

Experience shows that Rental operators, like other service business operators, should be targeting for a 20% pre-tax operating profit.  If you are operating at that level or better, congratulations; you are in the top 25% or better of the rental business operators.  For many others, 20%+ is easy to say, but much harder to do.

To accomplish this level of profitability it really helps to have a template or formula for success based upon what other similar high profit businesses have achieved.

Fortunately, I have found that your American Rental Association (ARA) provides just the tool you need.  Prepared by Business Resource Services, Inc., it’s called the Cost of Doing Business Report.  This report is based upon hundreds of businesses that provide their financial statement information (income statements and balance sheets) in a biannual survey.  The data is broken down by the amount of revenue earned from renting construction and industrial, general tool, or party and event equipment.  Importantly, it is further broken down by all companies in a particular category versus the top 25% most profitable companies in each rental category.

The best part about this report is that it proves that a great many rental companies in each major category are already achieving a high profit.

•    For example, based upon the 2008-09 Report, in the construction and industrial equipment category, for companies that derive 60-89% of their rental revenue from construction and industrial equipment rental, the top 25% made a 17.8% pre-tax operating profit.  The median for all companies was only 2.8%.  When we add in owner compensation, total owner reward for these high profit companies is 23.5%.

•    Similarly, in the Party and Event category, for companies that derive 90-100% of their rental revenue from party and event equipment rental, the top 25% made a 16.8% pre-tax operating profit, more than twice the median of all companies’ responses.  Adding in owner’s compensation, total owner reward becomes 30.1%!

This report provides highly detailed income statements and balance sheets showing the median results for all companies and for the top 25% most profitable companies.  (It also provides a great deal of other helpful information about successful rental operations.)

Using this tool to build a high profit business plan is very simple.  The first step is to allocate your revenue funds to the various categories in the way that the most profitable companies allocate their funds and then compare these allocations to the way that you are currently allocating revenues.  The Cost of Doing Business Report allows you to break down allocations in great detail.  By comparing what you are doing with what the most profit companies are doing you can easily see where you need to find more efficient ways to operate.

Let’s take the party category as an example.  To keep it simple, I will only show the broad categories, not the highly detailed categories available in the report.  What we see below is that the most profitable companies do not have more revenue (they actually have a bit less revenue).  On the other hand the average companies are allocating too much money to Direct Costs, Staff Expenses, and other Selling, General and Administrative areas.  Conversely, the amount of revenue allocated to Owner compensation and profit is too little.

Note: We recommend that you reorganize your statements to align with the way the Cost of Doing Business reports the data.  This makes it very easy to compare your results with those of the top 25% most profitable companies.

The second and final step is to find ways to significantly reduce Direct expenses along with Staff expenses and other Selling, General and Administrative Expenses.  At first this may seem like an insurmountable task.  But remember 25% of the companies out there today are already doing this.  You can too.

The way to reduce all these expenses is to discover the same ideas and strategies that the top 25% of companies have already discovered.  I am aware of at least four excellent ways to make these discoveries:

•    First, attend the ARA’s educational sessions at The Rental Show, which will be held Feb. 27 – March 2 in Las Vegas in 2011.  While there you will find lots of people eager to share ideas.

•    Second, join or start a Business Analysis Group (BAG), a peer to peer group of rental companies who get together frequently to compare results and share ideas.

•    Third, attend Users Conferences put on by your Rental Software Development Company.  There you will find peers who are eager to trade and share ideas on how to improve profitability as well as helpful presentations put on by your Rental Software Company.  At Alert, for instance, our 2 ½ day annual International Alert Users Association Conference is attended by scores of the most profitable rental companies in the World.  Our users also attend scores of Alert presentations and classes all devoted to operating more profitably.

•    Fourth, come back to this blog often to read about the dozens of ideas that we have collected from our most profitable clients.

One of the best things about the Cost of Doing Business Report is that it is available free to all ARA members who complete the confidential biannual survey, next occurring in Spring 2011.  Individual results are never shared with anyone; they are simply aggregated with all the other results they receive.  The reports are also available for sale at a cost of $325 for ARA members, $625 for non-members.  For more information, go to www.ARArental.org (Shop ARA; ARA Business Management) or call ARA at 800-334-2177.

I would welcome your comments and further perspective here on the subject of equipment rental profitability.

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(This is the first of a series of blog articles that will appear here frequently.  All the blog articles will focus on ways to improve rental operators’ profitability.  All the ideas are based upon the proven experience of our most profitable rental operators.  Return here often for additional proven business enhancing ideas.  We welcome your comments)

According to IHS Global Insight, the world’s leading economic forecasting authority, the North American Equipment Rental Business is expected to see a steep increase in revenues over the next few years.  After bottoming out at about $30 billion this year, revenues are expected to exceed $42 billion by 2014.

Looking at just the United States, according to IHS Global Insights latest forecasts (May 21, 2010), Total Equipment Rental Revenue will grow 4.6% in 2011 and 46.1% by 2014.  Growth of the major rental revenue sectors are forecast as follows:

• Construction and Industrial Equipment Rental revenue will grow 5.0% in 2011 and 51.5% by 2014.

• General Tool Rental revenue will grow 3.6% in 2011 and 44.0% by 2014

• Party & Event Rental revenue will grow 4.1% in 2011 and 12.9% by 2014

Local Metro Area Data now inexpensively available through the ARA.  

Alert Management Systems recommends that rental store owners purchase this New local market data through the American Rental Association (ARA).     

Alert Management Systems believes this local data, which is updated and provided online each quarter, is critical for putting together realistic business plans for 2011 and beyond. After all, it is impossible to set realistic goals without knowing the environment in which a company competes.  For each Metro area, the following data is provided for 2007-2014:

• Construction and Industrial Equipment Rental Revenue
• General Tool Rental Revenue
• Party & Event Rental Revenue
• Total Rental Revenue
• Real Gross Metro Product
• Real Total Construction Revenue
• Residential Construction Revenue
• Non-residential Construction Revenue
• Total Retail Sales
• Population Ages 25-54 and 55-64
• Total Employment
• Construction Natural Resources and Mining Employment
• Manufacturing Employment

For $100 per year ARA members can purchase the national data.  The cost for your first local metro area is an additional $50 which includes all three segments.  Additional metro areas can be added for $50 for one rental segment, $75 for two or $100 for all three. Additional discounts apply when multiple metro areas are purchased.

This information is available through ARA’s State of the Equipment Rental Industry Outlook 2009-2014 online Market Monitor, compiled by IHS Global Insight.  For more information, go to www.ARArental.org/go/research or call ARA at 800-334-2177, ext 282.
Next Subject: “How to Use the ARA’s Cost of Doing Business Report to Increase Profitability.”  Also included will be how to obtain this important Report at NO cost to you.

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I joined the Alert Management Systems team eight years ago.  Since then it has been my pleasure to work with a great many of the largest and most profitable independent rental operations owners in the Event/Party, General Tool, Heavy Construction and specialized Rental Categories – throughout the US and in four other countries.

Based upon my prior marketing and profitability management experience together with numerous one-on-one and group meetings with many of our clients and all the Alert team members I have learned a great deal about what works in the rental business – as well as what does not work.

The purpose of this Blog is simply to share the most current and up to date ideas on maximizing revenues and profits in the rental business.  Again, all of the ideas are based upon the proven experience of our most profitable rental store owners.

In the coming weeks and months we will be addressing all of the following subjects as all other important business building subjects that we come across in the future:

  • Rental Revenue Forecasts
  • How to Build a High Profit Business Plan
  • Building a Highly Productive Website
  • Revenue Building Strategies & Ideas
  • Expense Reduction Strategies & Ideas
  • Customer Experience Improvement Ideas

It has been my experience over the years that the most successful people are almost always eager to share their ideas with others.  Accordingly I am inviting and encouraging you to provide your own additional business building ideas to this blog with the goal of helping others to be as successful as you are.

I hope you will return here often.  Here’s wishing you much success in the future.

Tom Ross
Chairman, CEO
Alert Management Systems

PS  If profitability is a subject that is of interest to you, you many also want to peruse the profitability articles and presentations that are available in the “Profit Source” section of this website.

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