Wouldn't it be great to find a gold mine buried beneath your rental business? Well, look no further because you're sitting on top of one right now. Not literally, of course, but in the form of data that can be mined from your operational system.
We talked with four leading software suppliers to the rental industry and asked them what benefits rental businesses could gain from "drilling down" into their data. Following is a question and answer roundtable with Nigel Miller, president and CEO of Texada Software Inc.; Jack Shea, CEO of Solutions by Computer; Bob Shaffer, president of Point-of-Rental Systems; and Michael Stilwagner, vice president of operations at Wynne Systems Inc.
Q: How can data be extracted from a rental company's management software to give it an edge over its competition?
A: Nigel Miller, Texada - The data collected in your operational system is a gold mine of information. When analyzed, it can provide you insight from the most basic analytics to the more complex ones. These analytics can confirm your assessments and provide deeper insight into your business.
Analytics can take the form of comparison of rentals or sales year over year. The competitive edge that a company doing analytics over another is they can predict and even modify the rental cycle by promoting or offering bundling to increase their revenue. You can track how much you are spending on repairs and reduce your overhead based on the analysis of your data. You can track your business in metrics not available before.
A: Jack Shea, SBC - With a good rental system, the possibilities are unlimited. You could gain insights into a customer type by cross-analyzing revenues with profitability, frequency or other criteria. You could identify your best customers and nurture them - or direct your sales efforts at finding more like them. Or you might discover that a surprising type of customer is renting reach forklifts, for example, and promote that category to others in that niche.
Data mining is also useful as a basis for making decisions on direct mail, Yellow Pages and other marketing expenditures. You could extract a report on demand for certain types of rentals by zip code, and invest in zoned newspaper advertising to target those areas. Using data this way can be especially useful to multi-location rental operations that want to decentralize and tap into local markets. To do this effectively, a system needs to be able to analyze customer transactions by branch.
Other types of data mined by rental businesses include inventory item revenue history, maintenance history and ROI; category-level maintenance costs and ROI; critical utilization or missed rentals; and sub-rent analysis to determine the financial value and customer service value of adding inventory.
A: Bob Shaffer, Point-of-Rental
Systems - There are over three hundred pre-programmed reports in Point-of-Rental Enterprise software. Some of these are specifically designed to increase revenue or decrease expenses. For example, Inactive Rental and Sale Items, Excessive Resale Inventory, Dollar/Time Utilization are all in our analysis reports. Other reports analyze depth of serialized inventory to determine if you have too many, too few or just the right number of units. There are also many trend analysis reports including one comparing income by category over different time intervals. Another useful evaluation tool for predicting anticipated revenue is the value of reservation contracts over comparable time periods. Other reports are designed to identify previously good customers who have dropped off the radar and still others identify your best customers for different rental items.