Executive Report:

Discerning hirers

EHN’s research suggests that, if suppliers do not meet hirers’ needs and expected service levels, they will simply take their business elsewhere.

Each January, EHN compiles its listing of the UK’s Top Ten tool and equipment hirers, which inevitably reflects the strength of the largest companies. In our 2008 analysis, for example, we estimated the Top Ten had a 53% share of tool hire revenues, out of an overall total of £1.8 billion. However, this obviously means that the remaining 47% (representing approximately £846m) is derived from hard-working independents. Furthermore, as we pointed out, while there has been significant consolidation within our industry, most has been amongst the Top Ten themselves.

Independents, of course, comprise smaller businesses located throughout the length and breadth of the country, and understanding how best to serve such companies is a challenge for suppliers - as is gauging how successful they are in meeting their needs and expectations. To develop a clearer picture, EHN sought the opinions of 151 hirers who attended the Executive Hire Show in February. Many told us that their business prospects for 2008 were good, and that they planned to increase their investment in equipment for their fleets compared with the previous year. A significant proportion were new businesses that were using the Show to gather information on new products and suppliers.

A common theme was that busy independents look to suppliers to help them continue to prosper. The general feeling was that, while most suppliers performed well, many could do more. Pricing was an obvious issue. Respondents were aware of global rises in material costs, but did not want to see all the increase automatically passed on to them, as many perceived the situation to be. They also wanted clarity on pricing and did not want the frustration of unexpected delivery costs and other charges.

Hirers said they were always interested in special deals, and many attended the Show with the specific purpose of taking advantage of them. Significantly, there was a distinct group who attended the exhibition especially to look for new suppliers who could offer a more competitive deal. In this way, hirers are discerning in their buying habits: they are feeling the current squeeze on margins and are looking at alternative suppliers and what they have to offer.

The support of suppliers is critical to the success of any hire business. A surprising finding was the high proportion of hirers questioned who wanted to know more about new products on a regular basis. They were keen to have more literature, representatives’ visits and equipment demonstrations. Furthermore, independents did not feel that suppliers’ marketing was particularly strong. They also wanted to be kept informed about topics such as Health & Safety regulations and green issues.

An overriding concern expressed by many of the hirers EHN interviewed was to make suppliers realise
the extent to which our industry is made up of relatively small - yet very busy - businesses. Critically, therefore, the support offered by suppliers needed to reflect this, by being punchy and to the point. In addition, they felt that suppliers should respond to their needs in the same pro-active and personal manner in which they, in turn, serve their own customers. If they seek advice, they expect a specific answer and do not take kindly to merely being directed to a brochure or a web site.

Our research shows that hirers expect the highest standards of service from their suppliers. They are also aware of the wider issues that are affecting our industry. In particular, as the economic climate tightens, the successful supplier will be a keen listener, willing to address discerning hirers’ needs. •

Executive Hire News › Archives › July 2008 › Executive Report › Discerning hirers

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