Morning, everyone. Appreciate you joining us for another webinar about rental. I see a few of you are familiar names of folks that have joined us for some rental seminars in the past, and appreciate you supporting the AED Foundation for these rental programs. So today's topic is machine salesman. The reader has disconnected. The conference will be terminated in five minutes. Versus rental salesman, can they be the same? And as I travel around and I work with dealers around the country, this is a real challenge for folks that have been in the sales business. And they think that they will just get the sales department to promote the rental department. And so our discussion today will be trying to take a look at that and see if that's really an appropriate path. So we're going to break it down into looking at what makes a successful machine salesman. And we're going to take a look at what's a successful rental salesman look like. And then really, the sales cycles are quite different for someone that's pursuing a sales deal versus a rental deal. And the decision makers from our customers are often different people. So we're going to take a look at that. And then if you do ask somebody to do both of those tasks, what are some of the challenges that they might be facing in trying to do that? So we'll get started here. So in my past experience, I've owned a couple of rental companies, had five or six salesmen each time. And then I became an equipment dealer. And so I had machine salesmen who did some selling and renting. And then I had some rental salesmen. So I've been on both sides of the fence. I've worked in organizations that are with clients that just had machine salesmen. And rental companies that just had rental salesmen. So I feel like I've got a big, broad view of what makes these things, what makes folks successful. So first of all, a machine salesman's got to be real organized. They've got to be able to manage themselves, really. Their time, plan out a schedule. It's not a case of you show up on Monday morning and you wait for a customer to call in and decide they want to buy something. A machine salesman is somebody that really has to be pursuing the deals. Obviously, they need to have a certain amount of personality. And they have to be real patient. The sales cycle can be quite lengthy in getting appointments with people. And so someone that is ADD is probably not going to do well as a machine salesman. They need to be very focused individuals. Because usually they're selling a fairly narrow width of machines, a particular brand. Or maybe they're selling machines into a particular market. And honestly, they need to be goal oriented. Having managed a sales force before, I look at what our goals are for the company for the year. And that actually gets broken down. And each person on the sales team has to own a certain amount of that. So they have to be able to be goal oriented and understand responsibility for that. Product knowledge, they really do need to understand the features and benefits of a machine. They have to be able to walk a customer through that. Here's why this particular brand does it this way. I used to sell a particular line of mini excavators. And if you've looked at excavators, some of them pin the cylinder on top of the boom. And some of them do it underneath the boom. And does that make a difference? Well, it actually does. You can dig deeper in one case. If you've got it positioned correctly and you keep it out of the way of damage of another. So salesman needs to be able to understand the application of the product. He needs to understand how his product compares to everybody else's product as well. So features and benefits, know about competitive products. Used equipment values, machine salesman, I think, needs to be knowledgeable about that. They need to understand trade-in values. And there's a difference between a used equipment value and a trade value. Typically, if you're going to take a trade, you want to be able to make a margin on that. So machine might be worth $30,000, but I can't give you $30,000 for it because we're going to have to prep it and try to sell it. So maybe I can only give you $25,000 or $26,000 for it. Factory warranty details, when it really gets down to putting a deal together, the salesman really needs to articulate what the warranty covers, what it doesn't. Extended warranty options that go past what a manufacturer has. And then he needs to understand about insurance options and financing. So actually, quite a bit of knowledge besides just the product and what it does. So I believe, also, that part of what a machine salesman should be focusing their time on is knowing the customer's preferences about a lot of things. Some contractors want to keep a homogenous group of equipment. So if they like John Deere, they're not going to be interested in somebody coming along and offering them something outside that if they are brand loyal. But for other folks, maybe it doesn't mean much. We need to understand what their real preference is on owning equipment, or leasing equipment, or renting equipment. Do they like to do their own maintenance? There are some people that don't like risk. And we need to understand that these are the perfect candidates for selling extended warranty. And then there's other people that are never interested in that. So machine salesman, I think, really needs to understand the depth of the customer and preferences on everything. They need to understand the customer's processes. How do they use this equipment? And I can tell you, it's baffling to me. As a consultant, I go work with equipment dealers around the country and internationally. Almost always, the fix for the company is driving revenue. It's usually not a case of they're just spending their way into financial trouble. It's usually we've lost sight of how do we drive revenue. So I work with the sales forces a lot. And you go out there, and we're on our way to see a customer. And I ask them, so what does this customer do? And they tell me, well, he bought a 924 loader from me. I said, OK, he uses wheel loaders, but what does he do? And oftentimes, they really can't go very deep into telling me the nature of the customer's business and how they use it and what are the other associated pieces of equipment they use to do the work. So to me, that's always a red flag that says, you don't really know your customer very well. You don't really know what they do. You just happen to sell them a machine. So I find a lot of salespeople do not know their customer's processes from one end to the other. I also need to know the customer's expectations. What's the customer's, when I mean expectations, I mean about their suppliers and product support timetables and response time from the company on filing warranty claims and this, that, and the other. And so you've got to get all that out on the table. So I think a salesman is responsible for trying to engage the customer in questions to figure all that out and basically identify the customer's pain point. I mean, what is it that they're struggling with right now? And ultimately, after you've heard all of those things, be able to come back with a solution of some sort, whether you're promoting your service department, buying an extended warranty, maybe a new machine model that's out, or maybe listening to what you're telling me, you probably don't need to be a candidate to buy new machines. Maybe I should be trying to sell you used machines. Machine salesman is also educating the customers about everything from the new technology that's going on to programs that we've got in the business. Hey, the first quarter, there's going to be a reduction in interest rates, different financing programs, that kind of thing. And a minimum, the salesman should be coming back with market intelligence. And that's everything from knowing about the customers, thinking about the next 18 months of what's going on in the marketplace. Do you have a lot of jobs you're bidding right now? What's your work look like in the next 18 months? What's going on with the competition? Is the market shrinking? Is it getting bigger? What's going on with rates? And customers are talking to other sales representatives from other companies. And they're a great way to get information is engaging them. So machine salesman's promoting the services of dealership and ultimately trying to attract new customers. I would like to suggest to you that if you've got any questions along the way, go ahead and type them in there. And I'll do my best to react to them as I see them. I really would like this to be an exchange of information and hopefully useful information to you. So machine salesman, again, planned schedule. Keen awareness of inventory levels. I mean, as a sales manager, I'm talking to my salesman and saying, look, you need to see what we got in the yard and make sure that you're not selling something that we don't have, or at least setting the expectation of the customer that we can deliver one tomorrow. Because if I don't have it and there's a lag time in getting it in here, you need to understand that. We don't want to overcommit. So I think a machine salesman always needs to be paying attention to what's our inventory levels, our supply chain. If I didn't have one, is it customary for us to be able to get a machine from another dealer? Or is it going to have to come from the factory? And is the factory on this continent? Or does it have to come from Europe and it's four weeks on a boat? We need to know that. And they need to know the process for new stock ordering. If the customer's wanting to place an order for a unique machine, how long does that typically take? And depending on the manufacturer you're working with, I mean, some folks have almost monthly change in programs. I was working with somebody in the ag business not long ago. And I swear, every month there was a novel sent to the sales manager. And he had to dig through. I mean, there's such a kind of a complicated mess of programs going on that it really was a challenge for the sales manager to sift through that and give the meaningful information to the salesman so that they could actually apply it to what made sense to them. So I feel the pain for some sales managers in trying to deal with the information. But the salesmen really do need it. Because if there's a 30-day program and they don't get the information until the second week, we've lost some opportunity there. So that's kind of our machine salesman. And now I'd like to talk a little bit about rental salesmen and how those guys are different or the same. My experience with rental salesmen is they can actually be ADD. They like being outside. They like moving around. They like every day being different, very friendly, high energy. They just enjoy being in the mix. And they adapt real easily. So you go on a job site or you go to somebody's office and they can read the situation and they can react accordingly. And I do think they have to have a problem solver mentality. Because you're watching how somebody's doing it today and you're just thinking about the inventory that you have. And if that guy was using our machine, he wouldn't have to be doing it the way that he is right now. So I think that a rental salesman needs to be not just an order taker, for instance. And if a guy wants a two-yard loader, you give him a two-yard loader, you may be looking and saying, I hear what you're saying, but we've got a machine I think that would change your process slightly and you'd be more productive. Rental salesmen, I find that if they can get 50% or 60% of their day planned out, they're going to be reactive on the rest of it. And I guess in some cases, I'm OK with that, as long as they're not calling it a day at 2.30 in the afternoon. I really do think that the salesman needs to have enough space in his day. I'll give you a great example of this. So I sold my rental business, the first one, about 20 years ago. I had six salesmen. And I wait a year and I start over. Well, the guys that bought our company decided that the salesman, the rental salesman, needed to see, let's say, 20 people a day. And so if they didn't feed 20 people a day, they'd get their hands slapped. They also, the way that they got reimbursed for their truck allowance was based on mileage. So what they did is take the six salesmen and basically turned them into people that needed to drive a lot so that they would get reimbursed proper mileage. And then they didn't really have time to hang around at a job. They needed to get on to the next one. And so when I started over in business, I didn't have five salesmen. I had me. But I knew what pressure they were under to be able to satisfy their new sales manager. And oftentimes, when you're trying to engage a customer, I mean, if he's a legit prospect, you need to be able to have enough time to flex with their schedule so that you hear what their issues are and you can respond. So I could camp out. If that's what I needed to do, there was a big enough project, I may only see three customers today because they were worthwhile. And I'm going to stay there till I get the answer that I'm looking for. So that's why I say, I think a rental salesman, if you've got them fine-tuned to where they're trying to account for every 15 minutes in a day, that may be too tight. They do need to be a good listener. Also, when I travel with salesmen, I go in. I'm the fly on the wall. I listen to the customer. I let the salesman do the talking. And when I come out, I say, what did you hear him say? And it's stunning to me how often they didn't hear a key piece that the customer was either telling them directly or alluding to. They missed it. So salesmen across the board can use all the training, generally, that you can throw at them, whether they're focused on rental or focused on sales. I would encourage you to continue basic sales training anytime you can do it. Rental salesman really needs to know about application. When customers call and they say, I think I need an excavator, or I think I need this, you really need to be able to filter through, what exactly are you doing? What's the soil conditions? How high are you trying to lift something? How much weight? Because sometimes the customer doesn't know. And a rental salesman doesn't need to know what the warranty is on this particular machine. What he really needs to be good at is identifying the machine that will work in this particular application and be successful. So I think it's critical that of all the things that a rental salesman needs to know about your fleet, he needs to know how everything works. And more general details, he may not need to know the hydraulic pressure of something. It doesn't matter, unless you're talking about maybe a high flow track skid steer or something that you're going to put an attachment on. Then he probably needs to know that. He obviously needs to know operational skills and be able to show somebody how the equipment works in a particular application. And I think he needs to have a broad view of all the machines that work in concert with one another, whether it's an excavator and wheel loader combo that somebody's got going, or backfilling, we're digging a trench and we've got to backfill it. He needs to be able to see. If you think about a job site as being like an assembly line in a factory, in my opinion, the rental salesman really does need to see from the front end of the assembly line to the tail end of the assembly line, everything that's going on along the assembly line that involves equipment. They need to really grasp that, not just one particular machine that's working in the middle and no awareness of the rest of it. So what's this rental salesman do all day? They're identifying rental prospects. They're qualifying the prospects. And I don't know about you, those of you that maybe have to manage a rental salesman, but this is a real breakthrough. I think you should make sure that your rental salesman almost within the first five minutes of talking to a customer needs to be asking them, what kind of money do you guys spend on rental equipment every month? I mean, to me, that's a critical question. Because if my average customer for my business is spending $3,000 a month, if a customer tells me that he only spends about $500 a month on rental, I'm probably going to politely back out and say, have a nice day. I'm looking for people that spend $10,000 a month. So I just think that qualifying prospects, not everybody is a customer of ours. And oftentimes, rental salesmen don't really know how to do that. So I think they need to learn how to ask them some very pointed questions to find out if this customer is actually maybe worth spending the time. They need to know the same exact things that the machine salesman knew about customer expectations from the rental suppliers. What are the things that cause them the most problems? They get agitated with downtime. Your drivers come out here. They park the trucks in the wrong place. One of them came out here and ran over something the other day. When you send me a bill, it doesn't match what you quoted me. So those are typical things that are aggravations. Okay, so Sean just brought up a good point. He was talking about, remember that a $500 customer can change to a $500,000 customer with one job award. And there's a lot of truth to what he said. Now, what my experience has been is that that superintendent or that project manager is the one that's going to make the decision. That superintendent or that project manager, that's the person that might morph from one company to another. And if I've got a relationship with that person, bingo. Because it's unlikely in today's market and actually over the last 20 years that somebody stays with a contractor forever and ever. I mean, you know, jobs start and stop. And then when there's no jobs going on, a guy moves on. So you're exactly right, Sean. I have had a guy that was worth a small contractor. And lo and behold, he calls me and he has changed companies. And he's a building superintendent on a really large project. So good point. Good point. So the rental salesman has a lot of the same exact responsibilities. Gathering market intelligence. On any given day, I'm really not expecting a rental salesman to write a rental contract. That's not really in their, what I am trying to get them to do is focus on opportunities. They should be focused on the pipeline that is directly in front of us. And what do they see? And making sure that our inventory lines up with what those opportunities are in front of us. So the daily routine. I do think it's important for a salesman to understand what you've got in the yard. So whether they drive around the yard on the way out or somehow they've got access from a laptop or tablet or something that shows them what they've got. But also maybe what's going to be available. I find the most successful rental salesmen have a sense of urgency about them. They're not standing around in the office drinking coffee at 930 in the morning on Tuesday as if there's nothing going on. I just find that rental customers are really active and they're moving. And I think rental salesmen need to kind of emulate that same urgency and speed. I find that the most successful salesmen are those that can get a routine going within a particular territory. And most companies, most companies are, you know, working on territories. You know, they take a geographic area and slice it by four or three depending on how many salesmen and you go over here, you go over here. And I think a salesman needs to get some structure. So he can't just be wandering around every day. And we also have to have an idea that he's working over here probably on Mondays is where this guy is going to be and on Tuesdays he's over here. And so there's some sense of the schedule. I do think that with today's technology through texting, email or phone calls or job site visits, all of those things that this is all about making contacts. And so I think you have to have an aggressive schedule. And so I do believe that you should be looking for 15 or 20 sales contacts, not I dialed the phone number and nobody answered or I sent an email and I didn't get a response. These are real connections with people. So you might be having to make 25 or 30 to get 15. And so this is blocking and tackling. And so if you're managing rental salesmen, don't get sucked in by they've got good revenue going on because that can be very fleeting if a job closes. So I think you need to be paying attention to their blocking and tackling effort which actually supports the revenue that they're bringing in. Another, Sean just brought up another point that, yeah, do not let the salesmen, they shouldn't be wandering back in the building 2.30 or 3 o'clock in the afternoon. Now, I know most construction sites are going at daylight, and so let's just say 7 o'clock in the morning, it's about 3.30, guys get 30 minutes for lunch, and so usually at 3.30 or 4, construction projects are closing down. However, my experience has been that the superintendent folks aren't walking, they're not buttoning the trailer down at 3.30. They are trying to get their head around about what happened today and what do they need to get ready for tomorrow. They're making a bunch of phone calls back to suppliers or subcontractors, so I would challenge your rental staff, sales staff, to make a specific effort of talking to somebody, whether it's at an office or a job site, between 4 and 4.30 every day, that that is a key account that I am trying to communicate to this person, and now that the noise has slowed down from the goings-on that's normally in a project, I probably have a chance to have a quiet conversation and actually be heard and understand what they're up against. And honestly, you're probably not going to have five other salesmen standing at the door either because those guys are taking it to the house early like Sean was commenting on. So in terms of driving accountability for your salesmen, make sure that they're creating reach in terms of the number of contacts, the blocking and tackling, and then that they are still trying to bring in business at 4.30 in the afternoon. So they're trying to identify new jobs, qualifying prospects, internal communication. I find a lot of companies struggle with this. So the salesman's been out there today, he's made, let's say, 15 or 20 connections with customers. How do we get him to get that information back in to the business? Who sits down with them, or do they write it down, or do they have a tablet and they're able to report? My son happens to work for H&E Equipment and they seem to have a very good program overlay on their tablets, and so the salesmen actually create their schedule on the tablet, and that rolls up to the sales manager, and then throughout the day they're putting their notes back in the tablet. And so this really does aggregate the information to keep the inside of the business informed with what the outside's doing. And so it's a key piece of creating accountability, but also allowing management to be able to react to things they see going on out there. So if you have that capability or you can create it, I would suggest you do so, because getting people to write it down on some type of daily call sheet and hand it to somebody, and then that person sitting down with all these sheets or three or four or five salesmen, I find that to be very challenging as a sales manager. So internal communication, you need to find a tool to help you do that well. So now let's look at machine sales cycle. Those of you that have been a salesman before, you know typically the customer already has what he needs. He might not have the latest and greatest, but he's getting by, and so you've got to figure out what his opportunity is. You've got to offer a solution to him, and then that ultimately gets into a proposal of some kind. And the proposals can be very complex. It's not just a, I'll sell you this machine for $100,000. It's what am I going to do with my trade? What about the warranty? What about the financing program? And so on and so forth, and the details of when would we actually do this deal? Do you have it? So this is a very long, drawn-out process. Sometimes it's a case of the customer's interested in August, but we don't get funding until January. Okay, so now I've got somebody teed up to buy something, and they're not going to get money until January. Very long, and sometimes much longer than that. So then I get to whatever their approval process is. So does that have to go to a board of directors to get a capital approval? Does it go to a CFO somewhere? So the approval process is not necessarily quick. Then on our side, we get to place a machine order if we don't already have it. Whatever the lag time is there, the machine comes in. Some cases, we've got components coming from different places, and we have to put it together. We have to do a pre-delivery, get the documentation from the finance companies in place, and then deliver a machine. So this is a real process, and you can't deliver the machines until the documentation is in place and so on and so forth. So there really is a progression here that takes time, and that's why when we think back about a successful machine salesman, it's somebody that has patience because this is not immediate gratification here. This is somebody that's got to stay focused, and they've got to continue to push it along until they get the delivery and we get payment and they get a commission check. So contrasting this with sales cycle or rental, I mean, we are in the middle of manufacturing. We got this job going on out there, and we got an issue, and I need to solve it like right now. So time is money, and so if you can come up with a solution and you've got the urgency and you've got the ability to strike, it's a wonderful thing. So the negotiation, you've got a customer that can't wait you out generally. I need to move now. Do you have it? And you spend most times just minutes, maybe a day, as they check prices, and then you can move on. So the cycle is, and then you get it delivered. So it's much quicker, much more gratifying in terms of here's an issue. I made this offer. The customer accepted it and sold, and that fits one type of personality better than others. So let's look at the decision makers, who gets to choose. So in the buyer realm, oftentimes it's the owner of the company for smaller contractors, or it could potentially be the CFO that approves the process, or it could be a vice president of some part of the company. In an industrial company or a multi-location type company, it could be a procurement manager. These people are not generally accessible. I mean, they're professionals and they stay busy, and so you usually have to have an appointment to be able to get in to see these folks. So you have to arrange your schedule to get in to see, and oftentimes, I'd love to talk to him today, and he's not available till next Tuesday. So again, it expands the sales cycle time, and most of these people, when you are making a sales proposal, it's much more formalized. It's got to be in writing, and oftentimes, that is the contract by which you're going to get paid and you're going to be obligated to provide exactly what was on that piece of paper. So if you leave out any detail or you left a number off... So it's not a haphazard thing, because we're spending generally pretty big dollars here. Meanwhile, the people that we are trying to get to rent equipment from us, most of the time, that's not an executive-level person. Sure, there's exceptions to things, and it could be an owner-operator type, smaller contractor. It could be a project manager type person. It could be the guy running the job, the superintendent. It could be a purchasing agent. Somebody out in the field says, yeah, I need that. You need to get a PO from somebody back at the office, so purchasing agent or fleet manager. We've got our own equipment, but when our stuff's down, then I make the decision to go get it from a local supplier. So these people are generally easier to access. It's a less formal transaction. Again, it's, do you have it, what's your price, and can you get it out here? So totally different. So what I find sometimes in working with equipment dealers is that they have been lining up with the customers on the left, or the buyers on the left, the owners, the CFO, vice president, whoever, and oftentimes they are actually not even aware of the people on the right side of this. They don't even know that those decisions are going on, and they don't even have the relationship with that person. So opportunity exists most of the time. So now for the salesman. We've got this situation where we are asking him to wear two hats. If we are a dealership and you say, okay, you're a machine salesman, we're going to get this rental fleet started, we want you to devote some time to renting. So as you saw the things we were outlining there, time management becomes really, really important. And there are some personality types that do very well at scheduling, and there's other personality types that don't do that very well at all. They like to talk, but to turn that into writing out a schedule and I have to stay on the schedule, that's tough. So it gets back to focus, again, personality, style, and temperament. Some people are better at that. Now I've got the issue of accountability to two inventories. So we've got the sales stuff out here, and I've got some units that's aging and we really need to make those things go away. So can't you find somebody to sell this machine to or get back after such and such customer and see if you can talk him into it. Meanwhile, so that's kind of a longer term play, but it does have financial ramifications. If I can't sell that machine and then I have to start paying interest on it, that's an issue. Also, the rental inventory, which is fluxing every day, it's high, it's low, it's high, it's low. And so the picture on the right, in my opinion, is really what the salesman starts to get frustrated with. Gee, how do I keep up with all this stuff? So it's a big challenge. And honestly, the skill level, personal experience has been, you can take a pretty friendly guy and push him out in the field to go be your PR person promoting rental. And as long as you've got a good person answering the phone back at your store, as long as the first person was able to get them to call, the second person at the desk knows that I've got it available, they know the prices, they know the application, you've got a winner. You can't probably turn out a greenhorn into the machine sales and have any success at all because they don't know enough about the product. So you are front loaded, in my opinion, trying to get a machine salesman going because he needs to know a lot of things just to even represent your company to knock on somebody's door. So skill level, that includes all the product stuff we talked about and it's also sales skill, sales training. The job satisfaction, this is a mentality piece here. If you like solving problems for people and not doing the same thing every day and moving around a lot and getting to see different things, rental can be very appealing. On the same side of that thing, if a machine salesman, he may find that I don't like messing with all this little stuff. And I'd rather just do one big deal, you know, and it's kind of the art of the deal. I was able to put three machine package together for this guy and I beat out some custom competitors. So job satisfaction has a lot to do with how successful a salesman is going to be when we're asking them to do two things. And then lastly, the compensation plan, dealers also struggle with this a lot. At the end of the day, your sales staff will do exactly what you pay them to do. And I don't find that too many dealers have an appropriate compensation structure that rewards the rental and the sales efforts. If they're trying to get the person to cover both bases, there's usually gaps. And when you go through it with them, they see that they are heavily weighted towards sales and the rental is almost like an afterthought. And so, you know, if it's not really going to make a big difference in someone's paycheck as a percentage each and every month, you probably don't have it weighted correctly. So I want to get down into the weeds as we get near the end of this thing. I want you to think about the risk that you have at your dealership by not having somebody focused on driving rental fleet utilization. So I'm using the example of a $10 million fleet. Just to put that in perspective, a United Rental store or maybe even a Hertz location today, if you drive by one of those things, their fleet value is probably somewhere at least in the $12 to $15 million range, the average branch, so just so that you know. So let's just say you got a $10 million fleet. For every 1% of financial utilization that I can drive out of that fleet, $100,000 shows up. So to give you a comparison, if you've got a rental fleet that is performing at 28% right now, you got $2.8 million of revenue. But if I had focused effort on trying to drive that product into different markets or get customers to keep the stuff longer or be more responsive to deals, and I could move the needle to 32% financial utilization on the same fleet, I have $400,000 shows up without making another dollar of fleet investment. So then if you had a...so the bigger the fleet you have, you have opportunity risk. So if you've got a $30,000 fleet, a $30 million fleet, every 1% means $300,000 shows up. So my feeling is don't leave it to chance. Do not let the rental activity just be related to people are calling us and the phone's ringing and we get it out on rent and great. And if it doesn't rent, okay, so what? We're back to trying to sell. If you can...so as a consultant, when I go in to work with people and I look at how effective, you've got a $30 million commitment here in inventory, and it's really not working very well for you. And if we could make a few changes to this thing and I could make $300,000 to $500,000 show up, would that be interesting to you? Most of the time, the answer is yes. Can you get a salesman for less than $300,000? Well, of course, the answer is yes. So I'm going to suggest to you we recap this thing, the pros and cons of having a rental salesman and a machine salesman be the same person. The pros of having a rental salesman would be better accountability for the effort being made on rental. I now have multiple relationships at the customer level. So I still have a machine salesman assigned to that customer, but now I've got somebody that is really focused on their rental activity. And that translates into being able to be more responsive to the customer and take better care of them. I am going to increase my fleet utilization, and what that does for me as a business owner is I got more profitability into my business. That's the pro side. So what would be the con side of that? Well, I had to hire another person. So I got higher overhead. Somebody's going to have to manage this individual. So I got some more management requirement. And make no mistake about it, you can get conflict going between salesmen, the machine salesman and the rental salesman. That's my customer. No, that's my customer. I used to get this. So you've got to set some ground rules, and you've got to be able to expect some conflict. But at the end of the day, what we're trying to do is what's best for the company. And hey, if you only have a $2 or $3 million rental fleet, you probably don't even need to worry about this because the upside may not be worth it. But most of the dealerships I see today, their rental fleets are growing, but they're really not driving the utilization in the fleet the way they could. It is possible also here for a customer to get confused. You know? Jack's always been my salesman, and I've known him for years, and now you've got this other guy coming in here. Well, why do I want to talk to him? So there's some things to work out and explain. But I think if you're going to make an investment in a rental fleet, and you've got tens of millions of dollars at stake, you probably need someone that has responsibility for that in driving its revenue on a daily basis. So the challenges of this person, one person trying to do both of those things, it's a different mindset. I'll give you an example. If any of you have ever been sport fishing, and you're thinking about going out deep-sea fishing on Saturday, and you're thinking about the kind of fish that we're going to catch, and you're going to make sure you've got the kind of gear and bait that is appropriate for trying to catch that big fish, and you're very excited about this, and you get out there and something else gets on your line. It's an octopus, or it's a shark, or something that wears you out, but it was not what you were looking for. You don't think that's very successful, because you were going for a specific thing. A rental salesman, on the other hand, to me, has a mentality of somebody that's running a trawler, and they're 10 miles offshore, and they don't know what kind of fish they're going to catch today, but they're going to catch a net full of fish. All these little fish show up, and guess what? We have hit a home run. There really is this difference in focus, in mindset, in my opinion, between a successful machine salesman and a successful rental salesman. Again, compensation plans drive their behavior. One of the challenges with that is maintaining this proactive rental effort, so that it's not just reactive, without making a negative impact on the sales focus. I mean, sales is not easy. Sales, you have to really keep your nose to the grind, you have to stay focused, you have to push it along, it's a long, drawn-out process. My recommendation to folks in our industry, if you've got a dealer, rental should have its own sales force. The relationships with the customers are key, because in some cases, what you're trying to rent is a commodity, and this is still a business, still an industry that people like doing business with, with people they like. So the more relationships that you can foster, and that's one of the issues, a rental salesman is usually talking to his customer easily two to three times more often than they do a sales customer. So that's very, very important, to know what's going on in the mind of that customer, what they're on to next. Let's see, rental deals happen quickly, you need to be in on them, you can't miss them. The stakes are high. Let me see, I think I've got another question. I can figure out, there's a question that's come in, and I'm trying to get to it here. Okay. Guidance on some rental salesman compensation structure. Here's one of the things that I think is really important, that this is not a, should not be a linear game, meaning that you should have some real targets. Let me give an example. If I got a $10 million rental fleet, and I got three salesmen, if you were able to drive 35% financial utilization on a $10 million fleet, then I'm probably, I got $3.5 million worth of revenue. So with that, if I broke it in thirds, each salesman basically needs to bring about a million dollars worth of business. Break that down by months, and doing 90,000, I would probably say, you know what, I can't afford to have three salesmen on this, I probably need to have two. I think salesmen today probably need to be driving somewhere around 125 a month, depending on your product mix on the base, and then north of that. And so you need a tiered structure, but we also need to make sure that we don't lose customers. So I think, my thinking is a guy gets a base salary, and then I add a commission based on his revenue performance, but then I've got three or four other metrics that I'm measuring about his blocking and tackling. How many new customers did he bring in? How active are the customers that he has now? How good of a corporate citizen is he? Those types of things. So this is a very detailed question. I welcome an email. The leader has disconnected. The conference will be terminated in five minutes. A private conversation about this, but it is a big deal to try to get the compensation structure correct. Let me see if I can get a couple more here before we go out. Retail sales lose much face time with decision maker trying to put out buyers. So I've seen some good comments here. I think most of you have my email address, or you can route it through AED if you don't. I would like you to remember we've got another webinar coming up next month, December 8th. We're going to be talking about rental rates. We've also got two or three seminars going to happen in Chicago at the AED Summit, and you can register for those events. So thank you everyone for your time and participation. Thank you for watching!

webinar

salesman

rental

challenges

skill sets

organization

adaptability

sales cycles

compensation structure