Smart Rental


Managing a Rental business is a unique challenge.
Get it right and your Rental business can be amazingly profitable. I know I've done it. Managing the complexities of Fleet Acquisition, Rental Software, Rental Operations, Fleet Depeciation, Remarketing and, of course, Rental Sales and Marketing. These blog posts are a distillation of some key lessons I learned. They are the things I wished someone had told me when I was busy managing my business. They're the hot topics I discuss with my consultancy clients. Go ahead, dive in. Read, discuss and Act. It's your business and your profits that have the most to gain.

What's an NPS score and why does it matter?

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Rental customers are repeat customers, or they could be. And they know other people that want what you provide. Having happy customers is imperative to your success; and ideally you want customers to be so happy that they'll refer others to you. But how do you know if your Customers are happy enough? Will they actually refer new customers to you? That's the purpose of a Net Promoter Score (NPS). It's a standard measure of customer satisfaction and loyalty, and its used to determine just how likely your customers are to recommend and promote your company. And because its a 'standard' measure it means that your NPS score is directly comparable to others; you can compare how you are performing.

Net Promoter Score (NPS) is a simple measure calculated from answers to the one key question: How likely are you to recommend our company/produst/service to a colleague using a scale from 0 to 10 where zero means not at all likely and ten means very likely? 

Those who respond with a score of 9 to 10 are called Promoters, and are likely to buy more, remaining customers for longer, and give referrals to other potential customers. Those who respond with a score of 0 to 6 are labeled Detractors, and could spread negatives words about you or your service. Responses of 7 and 8 are labeled Passives, and their behavior falls in the middle of Promoters and Detractors. The Net Promoter Score is calculated by subtracting the percentage of customers who are Detractors from the percentage of customers who are Promoters. For purposes of calculating a Net Promoter Score, Passives count towards the total number of respondents. And that's it. One question, and one simple calculation.

NPS has been widely adopted and now with more than two thirds of Fortune 1000 companies according to a 2016 Bloomberg report. But NPS isn't just for the large companies, and part of its beauty is its simplicity. It doesn't take massive resources to get going, in fact you can get your NPS started today for free here (and no that's not a shameless plug - I am not on commission - its just want to show how easy this is).  The other great attraction of NPS is that its a consistent measure, directly comparable to other businesses. In business to business markets the average NPS is between 20 and 25. Therefore successful rental businesses should be looking to score higher than 30 - and if I was looking for a new rental business to invest in I'd want it to be in that range. Just to emphasise the point I have just read the latest trading statement for HSS Hire*, a successful UK based group, who are rightly proud of their achievement of an NPS score of 42! What's yours?

 

* No this not a plug. I am not affiliated with HSS Hire in any way. Although I have been one of their happy customers :)

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