Plant hire’s future is online
00:00 22 Sep 2009
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With the online ground broken by specification of products and materials, contractors are now turning to the convenience of the internet to hire plant. Colin Sowman explains how the traditionally conservative plant hirer became curious.
Much like Amazon, customers logging on to Erento’s site are not offered anything directly supplied by the organisation. What they find is equipment placed in the hi-tech ‘shop window’ by dozens of hire companies.
And it appears to work for all parties. Between January and June this year Erento generated 18,500 leads for its UK tool hire customers valued at £1.5m, and 2,500 plant hire enquiries valued at £1m.
But why would a contractor with an established supply line turn to Erento to hire tools and plant in the first place?
Clinton Patterson, director of the UK end of the internet rental portal ,says there are a number of reasons, from the desire to know the rates available in the on-line world and working in a new area, to sourcing unusual equipment and placing an order outside office hours.
Although he admits that more consumers than professionals use Erento (the ratio is running at about 4:1), professionals appear to be finding what they need as they account for over half the enquiries.
Local search
When a visitor searches Erento for, say, a 3t excavator, they put in the postcode of the site where the digger is needed and the results are listed by distance from the jobsite – not by price. And although the internet is a global phenomenon, Patterson says when it comes to tool and plant hire most users choose a local supplier: "People are more likely to click on a local item than go 35 miles down the road to save £5 on the hire rate."
Once a new Erento user has generated a list of potential suppliers, they then click on an entry to bring up the specification and location.
Should they decide to hire the equipment, they fill out their own details (which they only need do once as the system remembers them) and the dates they require the item.
That enquiry is immediately sent to the hire company electronically. From that point on, negotiations about discount, delivery charges and times, and credit checking are directly between the hire company and its newfound customer. "We aim to put the customer in touch with the hire company and not to come between the two parties," Patterson says.
Adrian Holt, director of small building contractor Ace Kind, has used Erento to hire a number of items.
The prompt came when the national hire company he usually used closed its local depot, leaving him with a 25-mile trip to the nearest remaining depot or having to foot a substantial delivery charge.
Holt needed a Bumpa hoist, which he knew his local independent did not stock. As he is on site all day and does his admin work in the evening, it would have been difficult to call round other local hirers during opening hours, so Holt went on-line. His search took him to Erento’s site.
Holt found a number of suppliers (which are unnamed on the website) offering the equipment he needed. "Prices were good and there was a choice of local branches," he says.
He had a choice of suppliers within 10 miles and sent an electronic enquiry to his chosen company.
When the company subsequently telephoned to confirm the details, Holt discovered the supplier was Hire Station, which did not have the item in his closest branch but moved it there overnight.
Typically between 25% and 80% of enquiries sent to hire companies turn into hires – indeed some companies convert over 80%. Patterson feels this may have something to do with the speed of their reply.
"On average 35% of enquiries turn into hires. If the figure falls below 25% we will contact our customer to try to help them improve their success rate," he says.
Feedback from end users is collected routinely and can highlight why a particular rental company is failing to convert leads.
To further help its customers turn enquiries into hires, Erento is working with rental software company inspHire to ensure the web-based enquiries do not languish unnoticed in an obscure inbox but feed directly into the hire company’s normal workflow system.
Customer fees
After the hire period has passed, Erento sends an email to the hire company to ask if the hire took place, and if so it bills its customer for 4.9% of the hire value.
Obviously a hire company could say a lead did not convert when it did to save commission, but Patterson says it would not be sensible to jeopardise the business relationship for such a small fee.
In fact, he is so confident about Erento’s ability to generate money for its customers that he guarantees the site will supply leads valued at more than the annual depot listing fee which start at £350, or he extend the listing free of charge until they receive enquiries worth double the fee.
Once Erento has put a user in contact with one of its hire companies, there is no obligation to go through the site for any subsequent business between the two or any commission charges on those later hires.
However, Patterson says research indicates that once an end user has used Erento they are very likely to return to hire other, even commonplace, items.
Certainly this is the case for Holt, who says the hire rates on the site represented a good discount on the company’s price list, which he doesn’t feel he would have got if he called Hire Station direct or walked in off the street.
He has since hired other items from Hire Station and now has an account with the company, but still prefers to check prices and place orders through Erento rather than going direct to the hirer.
Online ordering
Even for contractors that are happy with their existing supplier, there may come a time when they need to place orders for equipment outside the hire company’s office hours.
This can be a problem as only the biggest nationals offer on-line ordering. Patterson says the vast majority of hire companies’ websites are little more than a ‘calling card’, and while some list their equipment online, most require that orders are placed over the phone during working hours. Now, however, Erento is offering its hire company clients a tailored ‘front end’ to embed in their own website that will allow their customers to place orders via the web 24/7.
The page will use the hire company’s colours and logos so it will look like the rest of its website, although the user will have been transferred to Erento’s servers – albeit restricted to what the hosting customer is offering.
Customers will then be able to locate the item they need, put in the hire dates and times, and the request will be waiting for the hire company the moment the computer is turned on in the morning – a time at which many contractors are driving to sites and unable to sort out plant hire.
It may be that Erento is something of an on-line trailblazer, but there is no doubt electronic communication will play a much bigger role in the future of the construction and plant hire industries.
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