Essential Checklist for Scaling Your Online Equipment Rental Marketplace

With tremendous growth in the equipment rental industry, many players have stepped forward with their online storefronts and marketplaces. This trend extends to all types of equipment rental niches including heavy equipment, construction equipment, electronics, agriculture, outdoor and party supplies.

However, due to the high fragmentation, the competition is also very high, requiring a perfect strategy to build viable and effective growth engines. In addition, the growth of your equipment rental marketplace is immensely dependent on the initial decisions you make in the startup phase.

The following guide on growing your equipment rental marketplace is for startups and mid-level businesses as well. With thoughtful implementation of these tips, you will be able to scale and grow your business in the modern day rental market.

Practical Ways to Grow your Equipment Rental Business

Source: Pixabay

#1. Get Ready for Growth

Every business needs to remain agile and resilient to accommodate growth. Without these two elements, managing the massive influx of orders becomes impossible, eventually overburdening your team and e-commerce system.

For example, consider a scenario where your marketing efforts are bringing results but the system itself does not support that many user profiles and transactions. Your server space is also limited and ultimately the entire website crashes down. You will not be able to track your inventory nor fulfill orders, leading to customer dissatisfaction and jeopardized future growth opportunities.

As a precaution against any such situations, consider opting for a fully scalable equipment rental software like YoRent in the first place that supports unlimited transactions, listings and user profiles. Or else, you will need to keep migrating or upgrading your software package again and again.

#2. Set Achievable Growth KPIs

Growth can be in many ways. For reference, an increase in revenue is growth, so is an increase in the number of customers and orders. Likewise, increase in the sales of low performing products is also growth.

While we all are aware that increasing revenue is the key goal of every equipment rental business, it cannot be set as a practical growth measuring KPI. Instead, you can break down your KPIs into the aforementioned metrics on the basis of which you can devise actionable growth strategies and measure performance.

The KPIs you set can vary each month to adopt a more holistic approach. To genuinely increase revenue, it's essential to focus on every KPI, and it's perfectly acceptable for certain KPIs to outperform others. Thus, to achieve your KPIs, you need to stay agile and switch marketing strategies when required.

#3. Increase Vendor Count

Visualize you have set your KPIs and implemented the correct marketing strategies as well. However, it is simply that your marketplace does not have enough vendors to attract customers and persuade them to convert.

This scenario is often true for the majority of marketplaces as they face the chicken and egg problem. To increase customers, they need vendors and to increase vendors they need customers. We can aim to solve this problem by attracting vendors first as it is easy to incentivize and persuade them. Some ways to persuade vendors are:

Through commission:

• Offering them zero commission charges for the first few years

• Offering life-time zero commission to your VIP vendors

• Charging lower commission rates to first few vendors

• Charging lower commission rates to monthly sales below $5000

Through other incentives

• Offer free migration services to migrate from other marketplaces

• Offer unlimited listings to first few vendors

• Offer featured listing spaces

• Offer free marketing and PPC ads

  #4. Join Relevant Communities

It is difficult to grow equipment rental businesses by generalizing. Instead, it is a better option to identify and join relevant communities that are more likely to show interest in your products. If not direct conversions, those communities will bookmark your marketplace and revisit it to find deals for their required equipment.

You can find such communities on LinkedIn and Facebook. Furthermore, you can reach out to offline communities and visit their exhibitions. One such offline community for heavy equipment businesses is American Rental Association (ARA). It helps contractors connect with heavy equipment supplies all over the globe.

As implied earlier, joining a community may not bring immediate results, but it is definitely a right action for making important business connections and embarking on sustainable growth.

#5. Spread Word of Mouth

After joining a community, it is time to increase your word of mouth. This type of marketing is often considered the best form of marketing as it grows on its own, plus gives you the maximum recognition. Nearly all big brands have accomplished their position because of immense word of mouth.

To spread your word, you can conduct podcasts within the community or host exhibitions. In these exhibitions, you can discuss the benefits of purchasing or joining your marketplace. To win the audience’s trust, you can conduct a Q&A session to clear their doubts.

For the word of mouth strategy to work, you also need to have a strong value proposition and convey it very clearly to all audiences. This can include creating helpful web pages and offline marketing collateral where your value proposition is clearly mentioned.

#6. Venture into New Geographical Markets

Throughout the article, we have laid emphasis on staying agile and resilient. This included identifying problems with your existing marketing strategies and switching them if required no matter how hard. Likewise, you will need to try new marketing regions as well.

This step is helpful in both cases, which are whether you have reached a plateau in your geographical market or all your previous market strategies failed to work. Being an online equipment rental marketplace business, you have the advantage of targeting new regions without the trouble of moving your physical assets and location.

To target new geographical regions, you will need to do some keyword analysis and insert those keywords into your marketing pages and ad campaigns. In addition, you can enable multi-lingual and multi-currency support on your website to target non-native english speaking audiences. For further localizing, you can integrate the region’s native or most used payment gateways that will also provide more payment options to customers.

#7. Leverage Analytics

While retargeting geographical audiences or not, using analytical tools will be helpful to you in every scenario. You can devise data-driven marketing strategies, measure performance and identify your core customer groups. For this, set up Google Analytics property on your website and set custom audiences or use predefined dimensions.

Additionally, integrating a video meeting API can help in real-time communication with your vendors or customers, providing a more personalized experience

By identifying low performing pages on your marketplace, you can create various digital marketing strategies to increase traffic. Similarly, you can find top performing and underperforming products to map out your ads and markdown strategy.

You can also identify top performing vendors and offer them exclusive incentives to retain them on your platform. This will also assist you in obtaining and maintaining a competitive edge over other players.

#8. Create a Markdown Strategy

Coming to the markdown strategy, giving timely discounts helps in keeping visitors interested and gaining a short term upper hand over competition. However, your markdown strategy should be effective enough to attract customers and maintain a balance as well so that you can still earn some profit.

A tested and tried marketing strategy is to offer no or minimum discount on top performing products, introducing heavy discounts on them means unnecessary cuts on your own profit. In contrast, it is advised to provide discounts on low performing products or across certain categories.

The second approach will not only help you grow your profit holistically but also with loss minimization on underperforming products and categories.

Some types of discounts that you can offer are:

• Percentage discounts

• Flat rate discounts

• Conditional discounts

• Early bird discounts

• Clearance discount

• Bulk order discounts

• Rental duration discounts

  #9. Opt for Lean Management

  Lean management is more of a management strategy than marketing or growth strategy. In our context, we still find the lean management strategy to be very relevant. The term lean management refers to a strategy where you eliminate all unnecessary and underperforming efforts that don’t add any value to your product.

To implement lean management, evaluate all your marketing decisions of the past six months and find out those efforts that were absolutely unnecessary for your marketplace. This can include efforts such as costly animations, frequent web page changes or ad expenditure on an unrefined list of products.

By eliminating these efforts, you can ensure that your marketing team is only working on productive tasks that have produced results in the past. Do note that there can be some exceptions for experimentational marketing but those efforts should not interfere with your refined value creation process.

Conclusion

Source: FATbit

While the competition is high, it is not difficult to navigate through the competition and secure a top position for your marketplace. This can be done easily with the help of a well-planned marketing strategy and the above given checklist will definitely help to grow your equipment rental business.. However, to begin with any growth strategy, the first step in our checklist is very important, which is to be ready for growth. So make sure you match all requirements in order to scale up to new customers, transactions and product listings. After everything is set, you can expect to see presentable results within 6 months.