The rising cost of equipment and space constraints of businesses has led to the evolution of equipment rental businesses. Clients who need heavy machinery can rent from equipment rental companies, and the equipment sharing companies are responsible for transporting the equipment. Once the task is complete, heavy machinery can be handed over. The equipment rental company will take care of the logistics. The increasing demand for equipment enables rental companies to develop new business models in equipment rental to ensure that the equipment doesn't sit idle. Sharing platforms connect contractors with equipment dealers to match demands with supplies.
Trends in business model
Servitisation
Instead of fixing a rental price for the equipment, rental businesses have to fix a price for the service so that the clients get the service they want, and equipment rental companies can take care of moving equipment and offering the service. This service-based model was popularised by Rolls Royce when it started selling engine uptime instead of the engine. Servitization of the rental equipment business also enables clients to use the equipment more efficiently, reducing the repair risks in equipment. It helps greatly in improving loyalty.
Peer to Peer (P2P) equipment sharing
This business model also focuses on providing customer service but connects different dealers and manufacturers to provide the services together. Any rental business-owning machinery will always have huge machines sitting idle for some time. Equipment dealers can earn profits by sharing the assets with other dealers to meet customer requirements as their machines won't be sitting idle. As long as the cost of moving is justified, the equipment need not sit without generating revenues. Many service providers make this interconnection possible.
How should technology be used for equipment rental business models?
Equipment rental solutions offer a comprehensive management software suite to connect rental equipment and maximize its usage. This technology for equipment rental allows the rental companies to keep track of their equipment, usage, machinery condition, logistics, maintenance, etc. Essentially, renting out construction machinery can be managed as easily as car rentals with the right use of technology.
Improved customer service
Your customers don't have to wait to talk to representatives to get the information they want. They can book their equipment, upload necessary documents, get invoices, make rental and lease payments, and get important notifications using their computers or mobile devices. It greatly reduces stress on your customer support team because the software encourages self-service for customers. Customers will get real-time information on any equipment like mining machinery availability and pricing, making the process transparent for both sides.
Improved visibility of assets
The software solution makes equipment rental planning easier. Sensors and device tracking mechanisms enable the management to view the current status of equipment rented out. It also helps with warehouse management because the availability of assets is always calculated in real-time. With detailed utilization metrics of equipment available, you can predict future demands, analyze most needed equipment, purchase additional machinery which may be needed in the future and even sell the old assets that are not frequently used.
The promise of uptime guarantees
The real-time tracking of assets using Internet of Things (IoT) technology enables your rental business to have complete control of equipment utilization. You can monitor machinery compliance with operating conditions using advanced real-time tracking sensors. When there is a violation, the customer can be notified immediately, and further actions can be taken. By monitoring equipment conditions continuously, you can predict damages and perform proactive maintenance. Your rental business can promise uptime guarantees when the equipment's current condition information is always available.
Better equipment movement logistics
GPS position tracking allows you to manage equipment movement logistics. It will also ensure that your equipment is not handed over to any third party without your permission. GPS technology allows you to keep track of every connected piece of equipment, preventing theft and misuse. It can help you to manage equipment movement efficiently.
Timely deliveries
With up-to-date information on the location and condition of your heavy equipment, you can provide timely deliveries to your customers. Your customers have huge dependencies on rental equipment, and providing timely delivery is important. Better logistics management will help you avoid delays by choosing the shortest route irrespective of where the industrial machinery has to be moved.
On-the-go assets maintenance
Equipment rental solutions enable real-time data entry regarding the status and usage of your assets. All the information can be uploaded using mobile devices, eliminating productivity loss. You can monitor expensive equipment, anticipate breakdowns, plan proactive maintenance, schedule inspections, repair breakdowns quickly, find replacements for repair, plan procurement, and do much more with software solutions.
Hiring equipment for a fixed amount of time is about to become obsolete. Services are becoming lead differentiators for manufacturers or dealers. Whether your equipment rental business is a P2P model, outcome-based billing business or any customer-based service, the way technology is incorporated into the business model is crucial. Online rental portals actively connect contractors with equipment dealers and manufacturers, which increases the scope of equipment rental businesses that are willing to adopt technology sooner rather than later.
