Rental industry needs to evolve
Gone are the days when asset rental companies could get by offering run of the mill solutions, says Henk Craucamp, Regional Manager at RentWorks Africa. He believes that the key to business success in the rental space lies in continuous innovation, which will not only help rental companies to thrive in a changing business landscape, but will also ensure that the industry addresses customer needs.
“Choosing rental is not just about price, although there are definite cost benefits,” he says. “In this day and age, value adding products play a large part too. For example, a company is more likely to choose to do business with a rental specialist that can act as a one-stop shop, offering asset tracking and insurance as well as the basic and tailor made rental agreements. Value-added products that deliver measurable benefits for the client are the future of this industry.”
Craucamp believes that rental companies need to change the way they do business in order to stand out in the market. They need to begin to see rental from their customers’ perspective. For example, one of the biggest headaches for customers is the return process. “We need to find ways to make that process painless,” says Craucamp. “We’ve realised that most companies don’t actually know what assets they still have at the end of the rental cycle, which means they end up either with inflated or undervalued balance sheets. That’s what prompted us to offer an asset tracking service. This makes it easy for companies to view all assets, at any time, whether they are rented or not, which in turn makes it far easier for companies to manage their entire asset portfolio.”
According to Craucamp, one of the major benefits of working with a rental company that facilitates asset tracking and insurance is that reporting becomes much easier. “Many people don’t realise that tracking is not just about the actual asset,” he says. “It’s also about software licensing – making sure each asset is up to date and avoiding fines. It’s important both in terms of compliance and governance.”
He adds that tracking makes it possible to understand a company’s true asset base. This will become even more significant with the advent of the new IAS17 regulations, which will see all leases (whether operating or financing leases) included on the balance sheet, as well as with the changes to auditing processes.
“Innovation is born out of customer needs, problems and concerns,” says Craucamp. “As IAS17 comes into play and the business landscape continues to change, the rental industry will need to become more flexible to service customer needs and stay ahead of the curve. We will need to listen to what our customers need, and find ways of delivering that. The industry will need to move beyond focusing on simple rental agreements, and take into account the entire asset life cycle, from procurement to disposal, as well as offering service elements that may not traditionally have formed part of a rental package.”
As an example, he cites the partnership that RentWorks has developed with Motswako, a company offering office automation services. “Through our agreement with Motswako, companies can finance copiers on the same basis as our IT asset rental solutions,” explains Craucamp. “This means they can deal with fewer suppliers and rest assured that both their IT asset rentals and office automation needs will be taken care of through a company that offers an end-to-end solution encompassing insurance, tracking and even e-waste disposal.”
Value-added services are the future, Craucamp believes. The challenge for the rental industry is to begin to think differently about how rental can work, whether this means diversifying into different asset classes or offering shorter, more flexible or service-based lease agreements. “It’s not just about price anymore,” Craucamp reiterates. “It’s about getting away from a ‘vanilla’ rental solution, and providing clients an offering that enhances the rental value proposition, mitigates some of the unnecessary risks, as well enhancing operational and financial efficiency.”