For equipment rental companies, increasing rental duration and achieving utilization targets, while still ensuring competitive rates are the keys to profitability. Yet, a fragmented, highly competitive and discount-driven marketplace makes this difficult. The pricing status quo for many equipment rental companies is to rely on sales reps at the branch depot to determine the appropriate discount from published price lists. Customers often receive additional discounts on the back-end once the order is invoiced, but both the customers and sales reps lack visibility into that discount structure at the point-of-sale.
This lack of transparency and subjectivity results in inconsistent and misaligned pricing from transaction to transaction, rep to rep and branch depot to branch depot. It ultimately harms revenue and rental duration and leads to a transactional customer-vendor relationship. This whitepaper digs into why and offers a new strategy on setting rates that incent customers to do more business with them, profitably, and result in higher revenue and utilization.
Key takeaways include:
What the pricing status quo is for many equipment rental companies.
How customers, sales reps and executives are all equal stakeholders in price.
Why the pricing status quo is a lose-lose-lose situation.
How better, more rational approach to pricing leads to better customer relationships.