Getting the most of your rental relationships

There are rental companies that try to stick it to you on rate, fail to meet their promised delivery dates and rent old, downtime-prone equipment. Just as there are contractors who abuse equipment and try to dodge responsibility for repairs … or expect the rental company to absorb the cost if they fail to call a machine off rent.

Rental is a relationship and like most relationships it can fall on hard times. Many rental dealers and contractors, however, enjoy relationships marked with cordiality and mutual respect.

“The first thing you have to do is build a relationship,” says Bryan Yearout, vice president of Yearout Mechanical & Engineering, a 41-year-old mechanical and plumbing contractor in Albuquerque, New Mexico. “This comes from both sides of the fence and is based on communication and honesty.”

Granted – as in any business relationship – there are competing interests in getting the best deal. For contractors, this often translates into a low rental rate. Rental dealers, on the other hand, naturally want a higher return on the equipment they rent.

Rate only one factor
But everyone needs to remember rate is only one of many bottom-line issues, says Mike Disser, vice president of marketing, NES Rentals. “Getting the best rental deal is not just a factor of getting the best rate,” he comments. “Plus, it’s all negotiable. Each deal is done on a case-by-case basis.”

And a single-minded focus on price can cost you in the long run. “You always get what you pay for,” says Jackie Sparks, owner of Sparks Equipment Plus Volvo Rents, Shreveport, Louisiana. “It’s an absolute, hands-down mistake to go for price only. A rental company may have a low rate, but it may not have quality equipment or a certified service department. If you save $200 on a rental but the machine is down for three days, you’ve cost yourself 10 times the amount you’ve supposedly saved. You need to look at the overall picture before you decide on your primary rental provider.”

Who ya gonna call?
So now we come to what rental companies emphasize is the best way to get the best deal: Determine which company can provide the majority of your rental needs and negotiate a “first-call” status with them, which means they get a first stab at most equipment needs you have.

“You’ll certainly be pushed to the front of the line from the rental house perspective if you do this,” Sparks says.
Rental companies also appreciate a heads up on future jobs – and thus, future rental needs. “Allow us to be part of the pre-job process,” Sparks says. “The guys who do get first choice.”

From a contractor’s perspective, Yearout insists on new or near-new rental equipment. “It means we have less downtime and also creates fewer problems at billing time since we don’t get billed for the time rental machines are down on our jobs,” he says. “Contractors should not accept rental machines that are substandard.”

Numbers count
Usually if you issue a long-term, multiple-unit order, your rental rate will be lower than if you call up every other month for a three-day rental. Your rate also will probably be positively affected if all the rental equipment is going to one jobsite, says Tony Groat, NES’s east region vice president. “That way we can service a number of machines all at once instead of a one off,” he says.

“If you’ll ask for a quote on all your rental equipment needs – not just on a machine-by-machine basis – you’ll be so much better,” Sparks says. He sees contractors who rent a machine after a morning visit by one rental company’s rep and then rent another machine from another company that afternoon. “They’re not getting the ultimate support because they’re dividing everything up,” he argues. “If you know you’re going to need four machines, invite the companies you want to deal with to bid on all four pieces. That way, everyone gets a shot and there’s no hurt feelings. But I do understand contractors wanting to keep everyone happy, because you never know when you’re going to need a rental company.”

“Availability of equipment and seasonality are also issues,” Disser says. “During peak periods trying to find a piece of equipment can be problematic, so it’s not the best time to get the best rate.”

Tap into the rental knowledge base
“It’s key you explain to your rental dealer how you plan to use the equipment,” says Yearout, who spends $250,000-plus a year in rentals. “In most cases, they know the equipment better than you and this will allow them to get you the best piece for the job.”

To illustrate this, Yearout gives the example of a trenching job between two buildings. “If you just tell your rental dealer you need a backhoe,” he says, “you might find it’s so big you’re in danger of damaging the buildings plus you’ve got a trip hazard with the outriggers extended. But if you tell them about the job, they may suggest a compact excavator instead of a backhoe. So not only are they giving you the right equipment, they’re improving your safety and productivity.”

Wayne Brownell with Brownell Steel (left) consults with Mickey Lavicska, district sales manager, NES Rentals.

Groat agrees. “In order to fulfill a need, we have to know what the needs are. A common problem is the contractor asks for something, we put it together and then it turns out not to match the job. That adds costs for both parties.”

Groat cites the example of a contractor asking for a standard issue 40-foot lift. “But when we get to the job,” he adds, “we find he has to use it indoors, so the lift requires an electric drive instead of a gas engine. A 40-foot lift is not always just a 40-foot lift.”

It comes down to good question asking on the part of the rental dealer to uncover your true needs. Sometimes, though, questions aren’t enough. “In many applications,” Groat says, “we prefer to go to the job to make sure the equipment ordered will work. Sometimes, even though we get exact instructions, the equipment’s dimensions won’t allow it to get to the area where it’s needed. Then you have to come up with a different machine.”

“We know jobsites and equipment,” says Robby Hagen, a Rental Service Corporation sales representative covering Southern California, “and yet contractors don’t use us like they could. Instead they guess at what they need. Just give us a call and we’ll come out and look at your job. It doesn’t cost you anything; in fact, it can save you money.”

And don’t assume you know what your dealer has on hand. “You may be content with the solution you ask for,” Groat says, “but by not leveraging our knowledge, experience and diversity of product offerings, you could be limiting your productivity.”

“The contractor has to help us drive the cost of the transaction down,” Groat adds. “Making sure we get it done right the first time is extremely important.”

The education also flows both ways. If you sense your rental rep isn’t fully understanding your job, take the time to fill him or her in. “I love the old school guys who bring out the blue prints, wanting to help you understand,” Hagen comments.

First thing Monday morning
The cliché is everyone wants their rental equipment “first thing Monday morning.” “This is where trust comes in,” Groat says. “You may not need it until noon, but you say ‘first thing’ because you don’t trust your dealer to get it there when you need it. Let us know when you actually need it.”

And the ability of the rental dealer to get the right equipment to you on time can substantially decrease if your lack of planning prompts a last-minute “emergency” request. “There’s always the guy who cries wolf every time,” Groat says. “This means we have to change things in our scheduling and take things out and push this request in. This all drives extra cost into the process. If you give us a day’s advance notice instead of four hours, it helps.”

“There’s always someone who wants you to bump up his delivery schedule so he’s at the head of the line,” Hagan says. “But I’m glad to do it for someone with whom I have a partnership.” And sometimes the request goes the other way and Hagan asks a customer if he can wait on his equipment delivery because of a request by another client. The good ones, he says, know the door swings both ways.

Friends are flexible
Flexibility is a key word in any partnership, according to Disser. “If a problem occurs, each party knows it’s not intentional and they’ll both work on the solution,” he says.
For example, NES had a 150-foot boom lift in a local market that wasn’t available when a customer requested it. So the company sent out a shorter boom that let the contractor get started on the job, and then switched to the 150-foot boom when it became available.

Another example Hagan gives is when all of his delivery trucks are tied up and a customer has an urgent need. “I’ll ask them if they’re willing to absorb some of the costs if I go to an outside trucking firm,” he says.

When the road gets rocky
Even in the best of partnerships, conflicts will inevitably pop up. “When that happens, I want them to know they can come to me directly,” Sparks says. In fact, he says accessibility to a decision maker should factor into your first-call decision.

“Loyalty certainly has a place in the relationship,” Disser says. On one hand, a contractor may go through difficult times and need payment extensions. “On the other, a rental company may have a problem with machine availability. How a company reacts when the road gets rocky is “the time when people make their decision about you,” he says.

And, “instead of blowing up at a billing error or a down piece of equipment, just tell us to take care of it,” Hagen says. “And give us a realistic time to handle the problem.”

And when you do a significant volume of your rentals with a vendor, the arguments are kept to a minimum, Yearout says. “They take into account our loyalty when we have an issue, such as a $15 repair item. And if they pick up a machine from us that hasn’t been fueled, they’ll call us up and ask us whether we want them to fill it or if we want to send over a fuel truck. It gives us the chance to use our own gas pricing. Some rental companies will just say, ‘you owe us $300 for fuel.'”

The extras
Yearout reminds rental companies he appreciates the attention they show to his field employees. “Although these people don’t make the deals or pay the bills, they have a lot to do with how well a rental machine is taken care of on site,” he says. Recognition can be as simple as an on-site barbecue or a free pair of gloves.

And you should know more than one sales person at your first-call rental firm. “We want our customers to have more than one person to rely on,” Hagen comments. “It helps cement relationships.”

Individual to individual
A significant part of the rental relationship rests with the one you have with your sales rep. Yearout gives special kudos to Valerie Wheatstine, his local rep at RSC. “We can call her day or night, at home or whatever and tell her we have a need. I can get something within an hour if I tell her I need it that quickly.”

Wayne Brownell, co-owner of Brownell Steel, Scotia, New York, with wife Cheryl, says putting 90 percent of his rental requests – usually involving a variety of aerial lifts – with one vendor, NES, pays off. “They’ll jump through hoops for us,” he says. “They appreciate our relationship and we can get them anytime.”

The former ironworker, who formed his own steel erection firm in 1982, usually has several jobs going at once in New York, Massachusetts, Connecticutt and Vermont. “We can have anywhere from two to 15 rented lifts on 10 to 12 jobs,” Brownell says. “If we have a breakdown, they have their maintenance people out as soon as they can get there.
“Things work out fair for both parties. I don’t ask them to do anything that will hurt them.”

Payment due
Rental is a business transaction, and there are payments due for services rendered, so how promptly you pay your bills can be factored into your rental rates, Groat says. “If you draw out your payments, that’s not the best way to get the best price the next time you negotiate your rental rates,” he says. “It affects future
pricing.”

“It’s not a deal until it’s paid for,” Sparks says. “If a contractor has a reputation for riding his suppliers, it will reflect on our desire to do business with him.”
Above all, remember relationships take time. “When we work with someone long enough, we know what they know and don’t know,” Groat says. “They also are better acquainted with what we have available.”