No matter if you are a large or small rental house, public or private company, when you are reviewing your return on invested capital (ROIC) you have the same cost-of-ownership considerations as the competition: Price, freight, availability, maintenance and repair costs, to name a few.
What really influences your ROIC, though, is how you differentiate your rental business in the local market to increase your rental opportunities. Your market penetration strategy most likely includes differentiation tactics with your equipment offerings, rental rates, financing programs and customer service. But, does it also include your staffing initiatives?
If not, it should. A good local sales team makes the difference between being one of many rental companies in the market customers can choose from to being the leading rental provider in your area.
One of the biggest advantages your sales team can give your rental business is knowledge they provide you with about the local market. It is important to hire sales team members with a lot of experience and time in your company’s sales territory. Team members with local ties can give you insights into what projects are going on and what will be coming up for bid. They will already know many of the customers in the area – if not personally, at least by reputation. They know the industries the market serves. They understand the geography of your operations area, and they will have a good understanding of what equipment is, and is not, being used on local customers’ sites and why.
These team members can also help make introductions between your business and other local companies, as well as the local and regional government agencies. They can give you advice about what local organizations you need to join or participate in. They also have innate knowledge of market’s economic history – what big projects have been done recently, how did the downturn affect the local industry, what plans are being discussed for revitalization and/or new construction.
The value of a sales person with local ties isn’t only in his/her ability to rent your equipment to customers, but it’s also in the knowledge they can share with you to help you establish and grow your business.
Conduct market studies
Another advantage your sales team will give your rental business is in the knowledge they gain for you on a local level. It is important to hire sales team members who are willing grow their understanding of the local market for your business.
Market research can be done by networking with local contractors and visiting customers on their project sites. It should go one step further by conducting market studies about the local area, analyzing the data and making recommendations to you based on the outcomes of the research. For example, your sales team members should be building profiles on your current and potential customers. The profiles should include what equipment they are using, what industries these customers serve, do they prefer to rent or buy and so on. Your sales team should also be doing similar profiles on the government agencies you interact with, the past, present and future projects happening in your area, as well as your competition.
This type of market data is invaluable to your company because it can help fill in the gap between what you know and don’t know about the local rental market. With that information, you will be able to make better decisions about what equipment to keep in inventory, what equipment to buy (new versus used), what industries have growth potential and which ones are saturated and other such insights. This data can also help you determine where your company’s growth potential is and where the competition has an advantage.
So if you want to stand out and be successful in your local area, invest in a good sales team and tap into their knowledge, resources and connections to grow your market share.