What is the benefit of yield management in equipment rental?

Yield management in equipment rental is a strategy that pays off for many machine rental companies and equipment fleet managers. Why is that?

Yield management is defined by adapting rates according to certain criteria such as the demand, the environment, or the context. Initially democratized in the tourism and hotel sectors, this type of management is gaining ground in the rental business, particularly in the rental of equipment and machinery. Let us analyze together the yield management in equipment rental, a trend that is naturally tailored to service companies!

What is yield management in machine rental?

Yield management in machine rental is an optimization of the profit of the rental of equipment and machinery. This strategy is implemented through real-time pricing, also known as dynamic pricing. In short, high demand naturally drives up prices, and vice versa. This trend owes its success to the increase in online bookings and price comparisons on the Internet. It is important to specify that dynamic pricing is different from personalized pricing, which consists in taking into account the personal profile of the customer and tailoring its prices accordingly, an illegal practice in Europe.

As far as yield management is concerned, the duration of a reservation and the price of equipment rental is tailored to obtain a coherent offer based on the situation. Thus, many equipment rental companies do not hesitate to increase prices in periods of high demand. This strategy then allows them to lower prices in off-peak periods in order to attract more customers and consumers. This is a perfect example of yield management in equipment leasing. Thanks to this approach, rental companies optimize their equipment utilization rates and maximize their revenue while remaining competitive in the market.

Optimizing the price of equipment rental in real time allows to maximize the turnover and margins. The price is no longer fixed as with the majority of machine rental companies, but is tailored to demand. Increasing the fill rate and differentiating one’s offer from competitors are the main arguments. Nevertheless, you may think that the potential customer is harmed by this management method? On the contrary, in many cases, the latter will be satisfied by paying a price tailored to his situation. Yield management in equipment rental therefore increases the flexibility of your offer and your user base, regardless of the type of machine rented or the duration (short, medium and long term leases).

What are the yield management techniques in equipment rental?

There are many yield management techniques in equipment rental. However, it is not always easy to offer tailored and variable rates in order to make your equipment fleet profitable and in turn maximize your profits. It is thus necessary to analyze several criteria. These criteria take into consideration the duration of the machine lease, the annual history, the availability threshold and of course the time of year. The weather or nearby events also have a great influence on the demand. Analyzing, anticipating, and monitoring the offer of competitors on a continuous basis is therefore very important to optimize the yield management of your equipment rental company. This will guide you towards the price directions to follow.

This type of forecast then determine the yield management in machine rental. This yield management strategy must be pursued until the last stages of the rental in order to anticipate and meet the demand of the rental companies. Fortunately, today there are effective IT tools and solutions to automate these practices and contribute to your growth. Indeed, using a management software allows for real-time rate adjustments, optimizes utilization rates, and maximizes the profitability of each machine rental.

How to optimize equipment rental pricing?

Yield management is a powerful technique to optimize equipment rental pricing while enhancing customer satisfaction and attracting more renters. But how can this yield management method be effectively implemented? To answer this question and simplify the daily operations of rental professionals, hitechsoftware has developed myrentcar, a specialized rental management software. This comprehensive management system streamlines all aspects of the rental business.

With its advanced analytics and decision-support tools, myrentcar provides a complete overview of your rental company’s data. Its real-time activity tracking, displayed in an intuitive dashboard, makes it easier to adjust your pricing strategy dynamically. This ensures a seamless implementation of yield management for your rental fleet. Find out more on our blog for rental companies and fleet managers!