Short Term Rentals28 May, 2002 By: Ronelle Ingram imageSource
Short Term Rentals
of the strengths of the small office equipment entrepreneur is the ability to
provide equipment and services that the “big guys” cannot offer. One of the
industry’s most lucrative areas of business has become the short-term rental.
If you are already shaking your head and thinking “We don’t do short term
rentals (too much hassle for too little return),” you need to keep reading.
ARE BIG PROFITS IN SHORT-TERM RENTALS
are you doing with all of those analog copiers that are being returned? Many of
us still have a few in our showrooms. Three-year-old segment 2, 3, and 4 low
meter count analog copiers can be purchased off lease returns starting at $100.
The industry has turned their back on analog. In the rush to digital, we forget
that many of our customers care more about getting a cheap copy than they care
about the copier.
50 percent of our short-term rentals turn into long-term rentals or purchases
(leases). The same dealer, who refuses to be paid for a 2-week rental, quickly
agrees to do a free 2-week trial. Historically, more rentals turn into sales
than do free no obligation demos. Most copier dealerships have a piece of
equipment that can be economically made useable for a one-month rental.
dealerships have long tenured analog techs that have not made the transition to
digital equipment. Therefore, it is becoming increasingly difficult for the
dealerships to find enough analog work to keep those techs busy, much less pay
for themselves. The ability to provide equipment on an immediate short-term
basis can provide additional revenue, keep your senior technicians working, and
set your company apart from other local dealers.
To Create An Effective Short-Term Rental Program
a short-term rental form ready to be filled in, faxed or emailed, and make sure
there is a space for:
equipment being rented (specify accessories including the need for a stand)
of the equipment
lines for cost of the delivery and pickup
length of rental
of the equipment
due upon delivery
random rental requests should be connected to a pre-designated person with a
predetermined backup. The random caller requesting short-term rental information
must not be sent to a voice mail. These callers are usually calling from the
Yellow pages of the phone book or multiple web sites. It is not unusual for the
same caller to contact me two or three times within 30 minutes. They are getting
confused as they work down the list of copier company advertisements.
knowledgeable prepared employee must be available to respond immediately. When
unexpected needs occur, the customer is ready and willing to pay extra for their
instant needs to be fulfilled. A customer that is calling around, will often
hang-up without leaving a message. Even worse, some other company will have made
the deal before anyone from your company gets the chance to call back.
ideal in-house person should be someone who knows the instant availability of
equipment. All short-term rental requests and “can you deliver it today”
callers are automatically transferred to me, because I have a grasp of what
equipment is (or can be made) ready for instant delivery. If it is a current
customer calling, I usually have a working knowledge of their history, pay
record, and their overall needs and restrictions (stairs, limited work hours,
space or electrical irregularities).
service managers know that from time to time they must get a “loaner”
machine ready to take to a customer whose equipment is down and is demanding.
“Fix it today or get me a loaner.” Service managers can always hustle and
get a machine to a customer in a hurry. This same mentality can be used to be
very proactive in providing rental equipment at very short notice.
A DIALOGUE WITH CALLERS
I am connected to the caller requesting short-term rental information, I quickly
establish their actual need. If the caller is not a current customer, I quickly
(within the first two minutes) and professionally explain there are delivery and
pickup charges with a base rental rate. Our standard one-month rate is charged
whether you keep the equipment 4-hours or 30 days.
I confirm that the delivery location is within our servicing area. I also ask if
there are stairs or any other special delivery circumstances. Then, I give a
price range of $400 to $900, depending on copier size, copies needed, delivery
and pickup dates and length of time needed. The $400 to $900 response instantly
gets rid of 25 percent of the non-customer callers. The other 75 percent of the
callers are excited to find someone who is willing to provide a short-term
rental at any cost. Once the approximate cost is established, I start asking
questions concerning specific needs, anticipated volume, space availability,
accessories, etc.. Many people think they need a high-speed copier that can make
10,000 copies in one or two days. Once I explain the need for special electrical
outlets and a huge amount of space, a mid-size copier will usually accommodate
speaking, people who say they will make thousands of copies usually do not.
People who say a couple hundred, actually make a few thousand. You can be very
creative with base cost and overage charges. Very often, the overage charge on
copies is greater than the base rental rate. People who try to think “cheap”
understate the amount of copies they plan to make. Big profits can be made by
pricing a low base rate with higher overage charges.
customers are required to pay for delivery, pickup, and first and last month’s
rental by credit card or upon delivery. The rental agreement must be faxed back
signed before any preparation is started. When the customer pressures me by
asking, “How quickly can you deliver?” I respond by saying, “Within 24
hours of the rental agreement being signed and faxed back to me.” Established
customers can be billed net 10 days for the total cost of delivery, pickup,
first and last month rental charges. Our average short-term rental generates a
$1000 initial billing.
EXAMPLE OF TYPICAL RENTAL CHARGES
12-15 copies per minute delivery costs $95 for pickup and $95 base rental ($75
includes 500 copies overages at 3.5 cent per copy as well as service and
supplies). Mid-size 30-45 copies per minute cost $230 for delivery, $230 for
pickup and $310 base (includes 5,000 copies and overages at 2.5 cents per copy).
It is very important to state the hours that service is provided. Many people
requiring a special event weekend rental think you will provide service 24/7.
know of no other way to earn $500 to $1000 on a piece of un-sellable analog
equipment that is taking up space in my warehouse or showroom. We have a few
long time repeat short-term rental customers who we allow to pick-up and return
the small rented copiers. One local car dealer rents a small tabletop copier
every 3 months to use at their tent sale.
for the most important part of this short-term rental program. We have found
that over half of the short-term rentals we installed are extended into longer
rentals. Our average one-month rental turns into a 7-month rental and 25 percent
of our short-term rentals turn into sales.
new equipment is purchased, all rented equipment comes with an automatic 50
percent credit on the first three months of the rental. Any rental that is kept
for one year is picked up at no charge. Any rental that is kept for 2 years is
credited back the original delivery charge.
a chargeable service call reveals a piece of equipment that is either too costly
to repair, or parts are no longer available, the customer is offered a
short-term rental. The cost of the first hour of service is credited toward the
rental. Later, if they buy the equipment, 50 percent of the first three months
of the rental are credited back.
that the secret is to set up a system that commits the customer to continue to
do business with you. Once you have a little bit of their money (commitment),
continue to treat the customer fairly and you will have the opportunity to earn
much more of their money.
entire process can start with the positive answer to the question, “Do you do
short term rentals?” Plan ahead... Teach your receptionist to divert all
short-term rental questions to a designated in-house employee that knows the
condition of all available machines. Learn to use those analog techs to generate
additional revenue. Take advantage of those seemingly worthless analog
trade-ins. Provide a product that the bigger (manufactured or conglomerate
owned) companies are refusing to offer. Short-term rentals can provide long-term
profits to your company. Instant need, relatively low cost and next day delivery
can make a profitable sale happen before the competition even knew there was an