One notable effect the 2008-2009 financial crisis had on the equipment industry is that contractors became more reluctant to purchase equipment than they'd been in the past. Most chose instead to rely on rental equipment that made it possible for them not only to slash administrative overhead but also to cut back on expenses and machinery maintenance. Though the economy has improved considerably in the years since, contractors appear to have grown accustomed to the convenience equipment rentals provide – and that spells great news for the equipment rental market and equipment machinery dealers.
The state of the U.S. equipment rental industry is strong – so strong that it continues to post performance numbers nearly double the growth of the economy. According to the American Rental Association (ARA), this trend is expected to continue. The ARA's latest projections estimate a 5 percent growth in equipment rental revenue in 2018, followed by 5.8 percent growth in 2019, 4.4 percent growth in 2020 and 3.9 percent growth in 2021. The association estimates combined final rental revenue for 2021 at an impressive $59.4 billion.
The current and projected vitality of the equipment rental industry puts rental managers in a prime position not only to meet sales volume, profit, and market share objectives but increase the overall profitability and growth of their dealership's rental department. But first, they need to keep up with the fast-growing pace of the industry. Having a thorough understanding of a fleet's capabilities is essential to increasing utilization rates and ensuring that a dealership's rental department is in a position to meet demand and turn opportunities into profits.
The first – and most important – step to improving rental fleet utilization is to monitor and analyze Key Performance Indicators (KPIs). Tracking the right KPIs can help rental managers:
- Measure the true amount of revenue earned by individual pieces of equipment
- Determine the average change in rental rates from period to period
- Spot increasing or decreasing utilization trends
- Gauge the degradation of equipment
- Know when to acquire or sell off equipment
- Eliminate problem machinery and replace it with more reliable equipment
- Determine how long it takes for equipment to be ready to rent again after it’s returned
However, increasing utilization rates is not without its challenges. Traditionally, monitoring KPIs has required juggling numerous spreadsheets and reports covering a maddeningly broad range of information about equipment rental products and services – a process that's difficult, time-consuming and, sadly, not very effective.
Fortunately, there's a better way. TARGIT Decision Suite is the only business intelligence
platform that delivers out-of-the-box reports and dashboards with the most commonly tracked KPIs in the rental department. It lets rental managers:
- Combine data from all source systems – even old ones – to create custom dashboards and reports
- Access real-time information about the fleet
- Receive instant notification when KPIs move outside pre-defined standards
- Manage all their rental fleet data in one place
Most importantly, TARGIT Decision Suite provides rental managers with the information they need to increase efficiency in equipment utilization – time and financial – and rental customer growth.
TARGIT helped authorized Komatsu dealer Kirby-Smith Machinery
, Inc. resolve issues and enhance performance results: “After researching several options, TARGIT gave us the most flexibility and best end-user viewing experience,” said Kirby-Smith Rental Manager Bryce Puckett. “With the ability to integrate automated alerts and user-specific view and edit permissions, we can manage our business without the need to be glued to a screen all day long.”
To learn more about how business intelligence and analytics solutions can help your equipment rental business, download our free, 22-page eBook, Rental Analytics: Better Practices and Critical KPIs That Lead to Better Insight for Better Business