How do they do it? Kendall says it comes down to relationships. "We go in and meet face to face with the customer. We discuss our value proposition vs. our competitors' value proposition. It's rarely about price. It's about what kind of value we can bring to the customer."
Kendall says the value Star Rentals brings to its customers has a lot to do with being flexible and willing to serve. "It truly is a relationship business. That's one constant that hasn't changed," Kendall says. "Obviously, your rental fleet is the medium of exchange with your customer, so you need to have a quality product, as well as quality service that's tied to that."
Pillars of success
Kendall says Star Rentals has enjoyed long-term success because the company adheres to some basic time-tested principles.
"We're extremely well capitalized; we're financially solvent," he says. "You don't get through the last few years without having a pretty strong balance sheet."
Financial solvency is not by chance, of course. It's a philosophy at Star Rentals. "It's part of our culture," Kendall says. "When you go back to '05, '06 or '07, business was growing exponentially. We could have grown our business faster too, but we elected to stick to our measured growth philosophy and we didn't overleverage ourselves. We stepped up and did what we had to do to keep up with customer demand, but we didn't go crazy. Later, in '08, we didn't find ourselves overleveraged. In fact, we were in a great spot to deleverage, when our competitors could not."
Since 2007, Kendall says Star's competitors in Washington and Oregon have closed 65 to 70 percent of their branch locations. During that same period, Star Rentals managed to open a new branch.
"Our philosophy has always been, 'We're going to get through this,' and we have gotten through it while our competitors have continued to contract. We've been a benefactor of that."
Another pillar to the company's success has been its stability. "We have very little turnover, and we have a brand that's 110 years old," Kendall says. "We've made sure to embellish that brand. Even when the economy was struggling, we never lost focus on what we were doing. We didn't age our fleet, we kept fleet age where it was. We had a very modest downsizing, as far as people go, and about 90 percent of that was through attrition."
In addition to these underpinings of success, Kendall also points to positive energy as a factor in his company's success. "I obviously have a real passion for this business, but I sincerely believe all of our people do too," he said. "That's a strong component that I'm not sure all of our competitors have had."
That positive energy comes from the top, moves down through the employees and out to the customers. "It's contagious. Customers can really sense it," Kendall says, noting the good vibes don't come strictly from things like wages and benefits.
"It's more about who do I work for? Is there integrity there? Do I enjoy who I work with and the environment I work in? Do I enjoy what I'm doing? You need to pay competitive wages and benefits, that is a given," Kendall says. "But it's empowering your people that makes the difference."
Shaping behavior to empower employees
Training and educating employees to be problem-solvers is perhaps the most potent ingredient in Star Rentals' recipe for success. Kendall likes to call it "behavior shaping."
"We're extremely focused on shaping our employees' behavior," he says. "It allows us to empower our employees to deal with customers in the right way. In effect, anybody in this store has the authority to correct a problem with a customer. You don't have to go to your branch manager, who then goes to his district manager, who then goes to a vice president. Everybody out there has the authority and is empowered to do what they think is in the best interest of the customer, and the best interest of Star Rentals as well."
Bringing the staff up to such a level involves more than traditional training. Kendall says it comes down to constant education and reinforcement. "There are different styles of management and we want our strongest leaders to be behavior shapers. They need to shape people all along the way."