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Increasing Revenue with Rental Programs

15 Jun, 2003 By: Jay Wallus imageSource

Increasing Revenue with Rental Programs

I recently attended
a business networking group meeting at a hotel in Boston where I was approached
by the hotel's manager who asked if I rented copiers, faxes and printers on a
short-term basis. Although our company did not see any benefits in offering
short-term rentals, it wouldn't hurt to listen. The manager told me that a large
international consulting firm visited his hotel four times a year and required
the use of three high-speed copiers, three fax machines and three printers each
two week stay. The manager explained that in the past, he had contracted with a
national vendor who supplied used, and often outdated, machines that worked only
part of the time. He was disappointed at best and was seriously looking for a
new source.


Steps to Making
Rentals Revenues


truly focused on what the client needed rather than what the market
thought they needed.


developed the internal systems to support the market requirements so it
all worked flawlessly.


made promises and I made sure that our company kept them.


didn't listen to people who told me "there's no money in


The potential was
there, but was the money? Although I was concerned about the possibility of
low-ball prices charged by the vendor, I was surprised to find that when the
bills were tallied, the manager was being charged $425 per day for the copiers,
$150 a day for the faxes and $100 a day for printers. Plus, the manager was
paying a pickup and delivery charge of $150 each way. Not a bad deal…for the

In regards to
service, the vendor maintained a 9 a.m. to 4 p.m. policy, Monday through Friday
only. This, according to the manager, was unacceptable as the clients often
worked late into the night and on weekends while at the hotel. They needed
service when they needed service - not when it was convenient for the vendor.

The Golden Rule of

I learned a long time ago about the "Golden Rule." He who has the
gold, makes the rules. In this case, the client had the gold, but the vendor
wasn't wise enough to abide by the rules.

For the same number
of products and amount of money ($9,000 for two weeks), we were able to give the
manager new equipment and a higher level of service. And, while there were
vendors who charged hugely inflated prices and companies touting their used
equipment at rock-bottom prices, our combination of new products and expanded
services, gave our company a distinct competitive advantage that would be hard
to beat.

And so, the foray
into equipment rentals began. With a testimonial from the first sales manager
extolling the benefits of our company, we were able to market our rental
services to every four-star hotel, AV and computer rental company in the Boston
area. We soon discovered that the demand for exceptional products and services
was crucial to these companies. Expensive four-star hotels were expected to
deliver "knock your socks off" service. The other copier rental
companies didn't focus on what the client wanted; they were more concerned with
their own wellbeing. That was their big mistake.

That's where this
"Street Smart" kid from Boston came in and took away 90 percent of all
their rental business. And, believe it or not, they didn't even realize that I
had done it. You see, to them, rentals were a hassle. To me, they were a true
hidden jewel, generating upwards of $250k plus in rental revenue in the first
year of marketing the program at an 85+ percent profit margin!

Who says there isn't
money in the copier business anymore? I see many dealers who complain that
margins are declining in all areas. Any "Street Smart" dealer would
respectfully, disagree!

- - -

Wallus is the founder of Street Smart Training Institute in Stoneham, MA. His
Street Smart Training Program brings management together with salespeople in a
team environment. Contact Jay at 781.438.5660 or jwallus@streetsmarttraining.com.


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