Loss Damage Waivers or "rental insurance" is mandatory on every piece of equipment that you rent. There are two typical ways Construction Dealer rents their equipment in todays market. The first way is the dealer collects a rental certificate from their customer. In this process the customer has to call their insurance agent to get the certificate and provide a copy to the Construction Equipment Dealer. This process is lengthy for the customer and the dealer. It takes time away from the rental agent to process paperwork that could be eliminated, and allow him to do his job - rent equipment. It also adds another cumbersome step for the customer who wants to rent his equipment and get back to the job.
The second way dealers can rent their construction equipment is by selling them Loss Damage Waivers (LDWs). In this hassle free process the dealership is allowed to rent to everyone that comes in and charges a fee for the insurance. In order for a dealer to offer rental insurance they need to have a Dealer Inventory policy that is worded legally and appropriately to sell Loss Damage waivers to their customers.
LDWs can add value in several ways:
- Hassle Free Dealer to rent from
- Rent to all customers
- No insurance certificate
- Excellent Coverage
- Additional Revenue Stream
Posted by
Raj Julka on Fri, Dec 16, 2011 @ 10:20 AM
If you're like most equipment dealers and manufacturers in this tough economy, you're probably finding it tougher than ever to make the turnover you need to keep afloat. You might not have considered other revenue generating programs just yet, or you might think that there aren't any other options in terms of revenue generating programs that are relevant.
So What Are Your Other Options?
There's no question that finding new, effective revenue generating programs is a wise move - not just for equipment dealers and manufacturers, but for any business owner.
Good revenue generators are those that bring in steady, reliable income, long after the sale is made. They're the ones that require less work, for greater profits. In short, they're passive income generators.
The Specialized Financial Services Option
While you're thinking about potential revenue streams for your business, it's a good idea to consider specialized financial services as one of the options out there.
Specialized financial services are the perfect option for heavy equipment dealers and manufacturers, because it allows you to offer products that are in demand, and in many cases, to tailor the policy you offer your clients to their specific needs.
It also allows you to offer benefits like extended warranties, that safeguard your clients' investments, and offer you additional profits, without additional expenditure.
Diversification Is Key
These days, with companies in all industries finding it harder to do business in their niche, diversification is key, and that's true for all companies. In an industry where there is a considerable investment required by customers, like equipment sales, that's becoming even more apparent.
The Proof Is In the Profits
The fact is, there are already equipment manufacturers and dealers out there, who are adding a passive revenue stream to their turnover. They're already leveraging specialized financial services, on the spot physical damage coverage, loss damage waiver and extended warranties to improve their bottom line.
The reason they're making money from these policies is because unlike some revenue generating programs, they're selling products and services that their existing clients already want and need. They're selling convenience, and peace of mind, alongside their high quality heavy equipment.
The dealers who have already embraced this type of profit generation are benefitting from selling their clients high quality, flexible insurance policies, that generate income long after the equipment has left their showroom floor. Instead of a once off sale, they're turning their customers into repeat clients, and doing less work, to make more money.
If you're looking for new and innovative ways to boost your profits, whether you're a manufacturer or a dealer, isn't it time that you also considered a passive revenue generating program like this?
Posted by
Raj Julka on Wed, Nov 16, 2011 @ 02:32 PM
Whether you're looking for a way to attract new customers, or retain existing ones, or whether you're just looking for an easier, more cost effective means of spreading your marketing message, equipment dealer programs can help.
They can help you to increase your turnover, and reduce the value of discounts you have to offer your clients. Combined with technology, they can become a powerful, automated marketing tool. It's like putting your sales and marketing on autopilot, so you can focus on other aspects of your business, and it's all done using a proven method. Try it if you're looking for an edge - you'll never look back.
To help you better understand the concept, here are just a few ways that a customer loyalty rewards program can benefit your business:
Attract and Retain More Customers
It's a proven fact that people are attracted to special offers, free deals and reward programs. Given the choice between two suppliers who are identical in every other way, most customers will choose the one that offers them that little something extra. Equipment dealer programs do just that - offer your clients more rewards, the more they spend. And there are more than just a few ways that an equipment rewards program can benefit an equipment dealer today.
Boost Sales
Another attractive feature of equipment dealer programs, like ours, is that your customer is working towards a future reward. This encourages them to spend more, in order to reach the target level of the program. That, in turn, boosts your sales now, and helps you to grow and sustain your business.
Retain More Customers
Another big benefit to equipment dealers looking for the competitive edge, and considering a rewards program, is that they make retaining customers a whole lot easier. Once signed up, and earning rewards, on any program, customers are proven to choose to buy more from a particular retailer or supplier. They favor them over their competitors, simply because they know that the more they spend in your store, the sooner they will get their rewards.
Automate Your Marketing
When you combine a rewards program with technology, you get a system where you can contact and market to your customers at the touch of a button. By using customer information in an email marketing campaign, you can remind your customers to buy from you, offer them special offers or discounts, and leverage your rewards program even more.
What is Loss Damage Waviers or LDWs?
Loss Damage Waiver (LDW) is a promise by a dealer or rental company to NOT pursue collection or suit against the renter in the event equipment that is rented is damaged or destroyed. Though it works similarly to the offering of a traditional insurance policy, most states do not regulate it as such.
The major benefits of offering LDWs are as follows:
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Your dealership will become one of the easiest places to rent from- your customers will no longer have to worry about getting a certificate of insurance when they come to rent from you
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LDWs adds an additional revenue stream for your dealership- you can charge your customer a fee in order to purchase this insurance
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Your rental department can now be free to do what it does best-RENT and not haveto worry about chasing insurance certificates
But BEAWARE some dealerships think they are selling Loss Damage Waivers when in reality they are selling short term physical damage insurance and if this is the case you must be properly licensed to sell insurance.
A true LDW, is set-up so you are selling access to your insurance policy and do not need an insurance license. You can sell this for whatever price your market will allow and you keep the entire profit. More importantly, you know that you are protected, your customer is protected, and your equipment is protected. The dealership will now be able to rent to new markets and add a new revenue stream.
To learn more about Loss Damage Waivers and to see if you are properly set up visit ADI Agency today.
Truck and Equipment Dealers have faced challenging times in the past few years, the worst most have ever seen. Times are starting to appear better but how can dealers make sure that they are prepared for the next downturn? We suggest that a Customized Dealer Branded Customer Loyalty Program is the answer. Being pro-active rather than re-active will be the key to remaining successful.
What is a Customized Dealer Branded Program? 
It is a solution platform for dealers that assists them in increasing service absorption, increasing customer loyalty and retention, reducing advertising costs concurrent with improving financial performance and improving long-term stability for your dealership.
Why a Rewards Program?
For starters these types of programs have been extremely successful in other industries especially when analyzing customer retention strategies. Banks, airlines, supermarkets, and telecom companies have been happily rewarding customers for their continued patronage. Loyalty is a powerful profit generator because loyal customers tend to spend more, refer others and cost less to serve. How many times have you heard it costs several times more to attract a new customer than keep an existing one?
True customer retention is defined as:
- The customer buying a vehicle from the dealership
- Performing all maintenance and services with the dealership
- Referring others to the dealership
- Repeat vehicle sales
What should you look for in a Rewards Program?
- An automated prorgam that interfaces directly with the dealerships DMS that requires no additional equipment
- Install a dollars program not a points- point platforms can be confusing and smoke and mirrors where as a dollar platform keeps it simple and teh customer can see the benefit of doing business NOW
- A web based system where customers can check their balances online anytime
Why Now?
Every month that goes by without a motivation for your customer to come back to your dealership, you are losing customers to aftermarket shops or DIY. It assits in protecting you and your assets during a reccession and inflationary period. It is know that a rewards customers spend an average of 27-35% more. Start protecting your greatest asset- YOUR CUSTOMER.
Posted by
Raj Julka on Tue, Sep 20, 2011 @ 11:53 AM
When buying a car today, many customers opt not to choose an extended warranty. In some ways, this is understandable. For one thing, car owners are keeping their cars for shorter periods of time, and for another, generic spares and cheaper services make repairing damage much more affordable.
However, it's a whole new game when a person is considering purchasing heavy equipment. Heavy equipment generally has been built for a longer lifespan; It contain harder working parts, and when broken, can cause a break in a company's productivity which can cause a loss of revenue.
So, before you spring into the purchase process, you'll probably want to understand why an extended warranty makes sense for heavy equipment purchases.
- Heavy equipment has a longer life span and will be working hard for you for many years. Whereas, a car you upgrade every few years your equipment will last for decades
- It is much harder working than the average vehicle. Even though they're designed to lift tons of rock, shift mountains of sand, or otherwise, literally, move mountains, heavy equipment is still under much more pressure than your car. That means that there's a greater chance that something will go wrong, just after your regular warranty has expired!
- Then there’s the cost of heavy equipment. There’s no denying that heavy equipment is a major investment – an investment that you want to protect. When you buy it, you will need to justify that the ROI you get from that equipment is sufficient to justify the cost. Therefore your equipment will need to offer the maximum in productivity, over the maximum time.
- Unlike cars and other vehicles, your options when it comes to heavy equipment repair are limited. Most of the time you need to take your equipment to a certified dealer and not to a cut price mechanic, and you can't cut corners by using generic parts.
- When it comes to extended warranties, you must consider that for as long as your machine is off site, you're losing productivity. Whether you own an earth moving company, a construction business or anything else, you know that productivity, and sticking to your project program, is everything. Time is, after all, money.
An All Round Good Investment
The truth is that even though an extended warranty will cost you a little more now, it will save you a lot in the future. Having this type of security allows you to plan better, eliminates unnecessary delays in productivity, and ensures that when things go wrong, you don't have to spend a fortune solving the problem.
Posted by
Raj Julka on Mon, Aug 22, 2011 @ 04:42 AM
If you own a heavy equipment dealership, you've probably realized that in this economic environment you need to diversify your product and service offering, if you want to earn great returns. What you might not know is that there are ways to use your dealer inventory insurance (also called Inland Marine) to increase your revenue streams. In this article, we look at how these dealer inventory policies work, and how they can increase your profits.
What Is Dealer Inventory Insurance?
Most equipment dealers know what this type of insurance is, in most instances your lenders require you carry it. It provides coverage, for the equipment which sits on your lot, against loss or damage. It protects your investment, before it's sold to your customers. What you might not know, however, is that with a little forethought, you can also use this type of insurance to generate an additional revenue stream, as opposed to just a fixed cost on your balance sheet.
How Can Dealer Inventory Insurance Earn You Revenues?
Most insurance policies cost you money. It's a grudge purchase - we all know that. However, with specific policy wording, there is a way to obtain proper coverage which allows you to offer your customers "access" to your dealer inventory policy, which the dealer can charge to the customer, at the time of rental.
This means, after your customer leaves your lot with their heavy equipment rental, you can rest assured your equipment is properly covered. It's a proven method of transferring coverage while increasing your revenues, without chasing certificates.
What Other Benefits Are There?
- Aside from offering you a quick and easy boost to your profits, offering access to your dealer inventory coverage has added benefits for your customers:
- Eliminates the need for your customers to find and sign up for their own insurance policies - a time consuming, costly and tedious process in most cases
- Offering access to your coverage in this way also allows you to retain ties with your customers, which can be very beneficial, in terms of an ongoing relationship with that customer
- Eliminates lost opportunity costs associated with your customers waiting for a proper certificate to take possession of your equipment and get to work
Offering a Complete Package
By offering your clients the option of renting their equipment complete with comprehensive, quality coverage, you not only create a passive income for yourself, but also position yourself as a one-stop shop.
When you're dealing with busy people, any service you can offer that adds value is an important marketing tool, and this type of accessible insurance is no exception.
So whether you're interested in becoming a truly full service dealership, or you're just interested in creating a passive income stream to supplement your sales, finding a dealer inventory policy that allows you this sort of flexibility might be just the thing you need.
Posted by
Raj Julka on Fri, Jul 15, 2011 @ 02:22 PM
Equipment Dealers - Generate loyalty and increase revenues by rewarding your customers
INTRODUCING:
In today's business environment, it is becoming increasingly difficult to differentiate yourself from your competition. As industries and products mature, choices become many and thus the price wars begin and your piece of market share begins to deteriorate. Let's face it, there are many good products in the market today. As a participant in the Construction Equipment Industry you face the same challenges as other industries. How does a consumer, in our case an end-user, go about making his or her decision to buy your product? More importantly, how do we urge that customer to continue to come back whether it befor a new piece of equipment, parts or service? Take a second and give some thought to what has worked in other industries to generate brand loyalty. Best Buy, for example, uses its "Reward Zone" to generate customer loyalty. Staples has a rewards program where a check is sent to you in the mail. What do these two programs have in common? The rewards you earn are only good if you use them in their stores towards future purchases. What better way than to give your customers a reason to come back to see you? Yes, you give them money (i.e., a discount) towards a future purchase, but if they don't ever come back or use it you don't spend a penny. There is a saying which has some truth in that, 80% of our business comes from 20% of our customer base.
The reality of this, is that, it is much less expensive to keep a current customer happy and coming back than it is to attract a new customer. That's not to say that we put our entire focus on current customers (our pipelines would eventually run dry) but to focus on a proven way to accomplish keeping our current customers happy while at the same time looking for the next customer that will move into our top 20%. What is the #1 reason customers switch brands? Because they can! Let's give them a reason to stay with us and take care of them while doing so. As a member of the Construction Equipment Community, a Loyalty Program can be an effective tool from both a sales and marketing stand point. Research from other industries, similar to the CE industry (in the sense they offer units for sales, parts, service and rental), have utilized this strategy with great success. If we focus on the service department, findings from that research show that total RO's increased anywhere from 20-35% while the average $/RO also increased. What does this all mean? If your goal is 100% service absorption, you are that much closer to obtaining that with a Loyalty Program than without one. If you decide to install a Loyalty Program, look for one which is seamless for you to manage (no scanners or other technology to purchase and upkeep), automated, and customizable. Give your customers the ability to look at their earnings totals 24/7. Though the idea is new to the construction equipment industry it is certainly not a new idea and has been proven in other industries. In fact, one equipment/truck dealership has acted as a pioneer for this in the northeast, Tracey Road Equipment. As with anything, do your homework when looking for your platform.
USED Equipment Put To Work!
We have all experienced the recent downturn in the economy and one full service site construction development company has tweaked their services to amp up revenue.
People at Play has created a challange courses of heavy construction equipment games. Besides trying to promote their heavy equipment they are also able to show people the versitility of what the machinery can do with different applications. They have given you the power to operate an enormous CAT exacavtor, bulldozer, or skidsteer loader in a fun, safe contruction themed environment. People at Play are making a vacation destination out of heavy machinery and making it fun for the whole family. They even offer team building sessions for corporations.
People at Play have taken their core business and tailored it to what people want to create and additional revenue stream. This is thinking outside of the box in tough economic times.
For more revenue creating ideas visit About ADI