In today’s rental industry, competition in the aerial marketplace is intense, with many rental options available for prospective customers. That’s why it is so important for your rental company to develop a differentiation strategy that will set you apart from your competition.
Why does a rental company need a differentiation strategy?
The four primary reasons for having a differentiation strategy are:
- Without a strategy, the major difference between rental companies becomes price, a.k.a. rental rates, which is the last thing you want when you are trying to run a successful, profitable business.
- A well-defined strategy, will help to attract the customer base that you want.
- Should enable you to retain your loyal customers.
- And most importantly, your rental business can be more profitable.
At the end of the day, if you don’t have a differentiation strategy, your ability to be successful will be limited to your ability to offer the lowest rental rates.
So, how can you differentiate your rental business from you competitors?
You need to start by looking at your rental company and how you perform, or don’t perform, when it comes to the following list of reasons why people rent from a particular rental company over another:
- Fleet size and equipment availability – Are you a “one-stop shop” where your renters can get everything they need? Or are you a specialized shop with expertise in one type of equipment?
- Particular brands of equipment
- Equipment features/benefits – Is the equipment “state-of the-art”? Will it do the job required?
- Condition and reliability of the equipment
- Age of the rental fleet
- Delivery and pick-up process
- Responsiveness to equipment downtime
- Employee knowledge/expertise about the equipment and its applications
- Training on how to safely operate the equipment
- Competitive rental rates
Interestingly, there is one topic — rental rates — that consistently shows up towards the bottom of the priority list when customers are selecting a rental company. This indicates that, if you successfully differentiate yourself, and pay attention to the other reasons listed above, price, a.k.a. rental rates, will not be the deciding factor when a renter decides to rent from your company.
How do I develop a differentiation strategy for my business?
Once you have analyzed how your rental company differentiates itself, then it’s time to develop a strategy that enables you to use those attributes in your favor. Here’s how to do that:
- Conduct a survey of your competition to answer these questions — What is their market strategy? How do they differentiate themselves?
- Meet with your key customers and find out what’s important to them, as well as how they measure your performance.
- Perform a SWOT analysis of your business to answer these questions — What are your strengths? Weaknesses? Opportunities? Threats?
Once you have gone through these steps, you need to analyze all the information you’ve gained through your discovery process to determine what your particular strategy is going to be. In the end, your strategy will answer this one important question: What do you need to provide to your customers, and the marketplace, to make your business the rental company of choice?
Putting a differentiation strategy into practice
Once you have determined your particular strategy, you need to decide what needs to be changed or added to your current business practices to allow you to successfully implement the differentiation strategy. Maybe you need to expand your rental fleet and/or modify your rental fleet mix? Add people? Provide more training opportunities? Bolster your repair/maintenance/product support capabilities? Simplify or improve your customer-related processes and procedures? Improve delivery/pick-up capabilities? Improve responsiveness to customer problems/issues?
Whatever you need to make adjustments to in order to successfully implement your differentiation strategy, make sure that you emphasize the importance of your team to your company — having the right people is the key to success in every business, but this is particularly important to success in the rental business. You need to hire people that are qualified and well-trained in their vocation, and then select people to be on your team that are extremely customer-focused, with an aptitude for resolving problems/issues and have a desire to create a positive experience for your customers.
And finally, make sure your strategy is written down, thoroughly communicated and fully understood by every employee and customer. By living out your differentiation strategy every day, it will become engrained in your company’s culture and every employee will just do naturally and instinctively.
With a well-thought out differentiation strategy and a strong team in place, you will be on the right path to differentiating your rental company from the competition and becoming the “rental company of choice” for customers.