In recent years, companies have been investing more of their resources into data and analytics, and the equipment rental industry has been no exception. As more rental companies use software and technology to streamline operations, manage their inventory, and track their fleet, they create more data that can help measure their performance.
However, one of the challenges that these organizations often face: finding the time – and the resources – to use this data to their advantage. Large national rental chains may have entire teams of analysts who can run the numbers and identify trends – but that’s rarely the case for local and regional shops. So: how do you build an effective analytics strategy when you’re a smaller rental organization?
In my experience, there must be a specific focus on getting the right information to the right people at the right time.
Before I became InTempo’s Strategic Account Manager, I worked in Corporate Operations for multiple heavy equipment rental organizations. While building our reporting strategy, I quickly learned that data is only useful when it tells a comprehensive story – otherwise, it’s just a waste of time.
As you set KPIs for your rental business, start with the end in mind. Ask yourself: what do you intend to do with the data once you have it? Identify underperforming assets to sell or trade? Adjust your pricing strategy to drive more revenue? Build a marketing campaign to promote equipment with the highest ROI? Predict your break-even point on a potential purchase, based on historical rental revenue from similar categories of equipment? Make sure that every data point corresponds to your business model and fleet objectives.
Once you know what you’re looking to achieve, you can decide on specific data points that will inform those decisions. Most will fall into one of the following categories:
My recommendation: if you only have the resources to monitor a few data points, prioritize those that have the strongest direct impact on your revenue (i.e., financial and usage data categories). Within those categories, a few sample KPIs may include:
Do note that in some cases, a single data point doesn’t paint the whole picture. For instance, consider the following chart, which pairs up two different data sets:
If you’re only tracking time or dollar utilization rates, you’re not getting the full picture. This is where starting with your end goal in mind is so important. In this example, if you know that you’re looking to determine which rates need to be adjusted (either higher or lower), you’ll know that you need to consider both time and dollar utilization to draw your conclusions.
Of course, you’ll also need to keep in mind that in some cases, your data will be more educational than it will be actionable. For instance, your CEO won’t close an entire location because their revenue is down this quarter – they may want to spend some time exploring the external factors that are causing the downturn. When you put your data together in a logical way that tells a story over time, you put yourself in the strongest position to make informed decisions.
Once your strategy and goals are in place, it’s time to start building out your reports. As you move through this process, take the time to consider:
While there are unlimited possibilities for how you design your analytics program, building out your reports and dashboards with your desired goal in mind will help you get the right information to the right people at the right time.
Want to talk your strategy through with a member of our team? We’d be happy to share our real-world best practices for reporting and analytics. Contact us today and let us know that you’re interested in better reporting; we’ll help you put together a plan that can give you more meaningful insights into your rental business.