Having a
Loaner
Down Time Not Allowed When Servicing Customers
Most of your quality commercial
customers will carry more equipment than they can utilize at any
one time. Even the one man company has several mowers, string
trimmers, and blowers. Some of the reasoning for the additional
equipment may be for different types of landscape or the occasion
in season, where additional help is necessary to get all of the work load completed.
But for the commercial customer
that can afford the equipment, the reasoning is traditionally that
they do not want to have any down time due to equipment failures.
Time is money, and you can't make any after sunset.
There is an
opportunity for a business such as yours, to capitalize on the various
situations where a customer has need for additional equipment.
What
if you were to provide equipment as a loaner, for a price? The situation
could get out of hand as witnessed by this example; a store started
with only one walk behind mower and then added a complete rental
department as he saw the potential develop to make more money.
The
loaner is made available at a price that is less than comparable
equipment rental at a traditional rental store. This price is
given only to customers for which you are currently repairing
their equipment, or for a select group of customers that spend
a substantial number of dollars within your business.
You may
institute a higher price for a rental to residential customers
or customers that only give you a part of their business. For
the latter situation, this may become a way to encourage a customer
to bring more of his business to your shop.
The one concern
that you may have is in making sure that you have equipment on
hand, and ready for that commercial customer that will otherwise
have one of his crew, or himself, standing idly by while his equipment
is being repaired. This, of course, makes an excellent argument
for having a two tiered shop rate.
One shop rate which is for
the situation where you have the opportunity to take a piece of
equipment out of sequence and provide immediate repair. And the
lower rate being your traditional rate.
Deciding what equipment
to make available can be based on several scenarios. Some dealers
will want to use a piece of equipment that has been traded in.
Working the financial side of the equation, you can usually afford
to give a fair dollar for the equipment when it is traded in,
perform an initial servicing, rent the equipment several times
so as to recover your trade in allowance, and then reservice the
equipment and sell it for a decent profit.
If your mechanics are
on commission, they will like this idea because they will have the
opportunity to write two service tickets on the equipment.
Another
line of thinking is to take the oldest trade in equipment that you
have that is still functional. Most dealers will have reservations
in regards to the benefits of this thinking, because a dealer will
have a very unhappy customer if this equipment breaks down in the
field.
The third thought process is
to use new equipment. The idea behind this is to get your commercial
customers to test the newest and latest, as well as be seen out
in the field using your new equipment. You will always have the
possibility of a customer that brings the rental back, and wants
to know what you will sell this "slightly used equipment" for.
Whichever
way you decide, there are two areas that you need to check out
with your insurance company. Many insurance policies will allow
you to rent equipment without an increase in premiums as along
as rentals are less than 25% of gross sales.
The second scenario
you will need to verify is the resolution to the possibility
of this rental equipment being stolen while in the possession of
the customer. Understandably with most equipment, your insurance
deductible will be higher than the cost of the equipment, but
never the less, you should check it out.
The total package can
lead to additional sales, perhaps a rental department, and
most of all, customers that know you understand their needs.