The rental and lease industry is a flourishing sector, and the demand for equipment rentals is on the rise. While this demand impacts positively on the companies in the industry, it can also pose issues for customer satisfaction.
Today the rental and lease industry includes an array of options as customer demands keep evolving. As a result, many companies in the rental segment are struggling to manage different rental pricing models. As a player in the rental industry, you need a solution that helps you manage your rental business efficiently despite the array of rental pricing models.
Rental offerings change rapidly
A basic check of the models in today's rental industry would show you most are pretty basic. One of the most basic models lets customers rent equipment and pay an hourly, daily, or weekly rate for the short term. In other cases, it's common to have a low and high day rate based on the duration. This means that when you rent for two days, you pay a higher day rate than when you are renting the same equipment for four days. Rates improve for a long-term lease. The longer you have the equipment, the lower your day rate.
Some rental models add other factors that could include a warranty, transportation, and insurance. A typical example is in the car rental industry where the car rental helpdesk offers the options to add extra insurances and warranties in addition to child seats and navigation devices.
Customers increasingly seek transparency while still wanting a single price for the whole package. Consequently, rentals should have a single charge but with a break-up of the pricing structure. Additionally, the rental price should include all other elements in the single price by default.
What about account servitization?
In some cases, a rental agreement might extend into the area of servitization. This can be better explained with an example. Consider a company that needs to install some heavy equipment at a considerable height. They either have the choice to rent a crane from a rental company and do it themselves or rent out the entire service, which would include bringing the crane and installing the equipment as part of the deal.
In the second option, they are not just renting equipment but going for a service that includes the rental. Such an option would include the human resources, planning and operational aspects, safety factors, as well as aftercare. The pricing for such an option would naturally be different from a simple rental as it includes many additional factors.
It's imperative that the rental company have the means to tailor their offerings, change schedules, and keep introducing new models to keep up with the changing market demands.
Some variations of billing options could include:
- As per the rental period (hour/day/week/month)
- Rental as per consumption (kwh, KM, etc.)
- Based on project hours (like renting of cranes, or other equipment)
- Lease with option to own the equipment
- Financial leasing
Your rental solution needs to help you manage and bill for all the above rental options and more. In today's competitive world, it's no longer enough to offer a simple service and expect to survive. Only those companies that deliver products and services with a differentiator can survive and flourish. Each rental company requires a highly advanced and flexible offering to address these business changes.
Curious to know how much an equipment rental software solution would cost you? Check out this blog in which we provide more information about pricing.