To quote the legendary management consultant Peter Drucker, “What gets measured gets managed.” Measurement is a vital management tool. If your rental business is in a rut and you know deep down that it can improve, setting key performance indicators (KPIs) is your best path forward.
KPIs highlight what matters most, help provide you (and your people) with areas for improvement — such as better rental contract administration, customer engagement, or asset and personnel management — and create a platform for fact-based decision-making and tracking performance against your goals. All these things impact your bottom line.
According to this excellent piece from Forbes, “You can’t begin using KPIs until you have clearly defined strategic goals; these are what will serve as the jumping-off point for deciding which indicators will be the most useful to your organization. Once your objectives are in place, the next step is to select the appropriate analytical and reporting tools, which are typically software programs designed specifically for your type of business.”
An effective KPI is very specific to a desired task or outcome, is measurable, is achievable, relevant to your rental business, and linked to specific time parameters. Here’s a great overview of what a KPI is and how it works, and following are a few examples specific to the rental industry:
Are my customers getting quotes promptly?
If you take two days to get a quote to a customer for a backhoe or generator, then chances are that one of your competitors is already on it and likely won the deal. You need to optimize your processes to get a quote faster than your competitors – you need the information readily available and up-to-date via rental inventory management software. The KPI for this scenario could be that all quotes are generated and provided in less than two hours (versus quotes that took longer. to create).
I got the deal, but was the equipment delivered on time?
Few things will turn a rental customer into a former rental customer faster than unresponsiveness and poor service. All the contracts in the world are no good unless you can follow up on time.
A system like Fame Rental will help you track asset and retail inventory information in real-time, so you know where your assets are every step of the way: it will tell you such things as their condition, if they need to be serviced now or later, where they’re going, and when they need to be to their location. The KPI for this scenario could be the number of reservations delivered on time vs the number that are not.
Does the equipment fit to the specs requested by the customer? Is it reliable?
No two customers are alike. They all have unique needs and operate under unique conditions. Tracking your customers’ requirements on a mobile device lets you more quickly adapt to and record their preferences and needs, and have the intel to consistently connect them with the correct equipment. Most of all, it ensures the equipment will be where it needs to be on time and in good condition.
Using mobile devices in real time versus paper-based systems helps you more easily manage your customers’ requirements and keeps your business rolling with fewer glitches. The KPIs for this scenario could be the number of contracts where equipment could not be delivered when the customer expected it, and the number of items that needed to be exchanged or replaced.
Life isn’t perfect. Equipment breaks down from time to time. The most expensive cost of a breakdown is not the repair, but the loss of your customer’s confidence and goodwill. So it’s how, and how quickly, your rental business handles these problems that ensures a satisfied customer and long-term success.
A web-enabled Enterprise Resource Planning (ERP) system will help you more quickly respond to customer emergencies, get the right mechanic on site quickly to repair, and/or review your available assets to determine if you have a suitable replacement available for delivery. The KPI for this scenario could be all emergency service calls are responded to in less than 30 minutes, a mechanic is onsite to make repairs, or a backup piece of equipment is made available within two hours.
Through a full-function, web-enabled rental management software platform like Fame Rental, you manage all your data and information in one place, you can set meaningful and accurate KPIs, and get performance you can brag about.
With Fame Rental, you can analyze performance against KPIs, create rental contracts, and generate service and work orders. The system enables you to visually view your staff’s schedules and drag and drop them to the most optimal open work orders. Your technicians will be able to capture their hours and parts used on the job with hand-held devices increasing efficiency and accuracy.
by Joe Lewis, President & CEO, Fame Rental