10 ways equipment rental companies can leverage AI
By Kyle Clements
October 4, 2023
Artificial intelligence (AI) has taken the media by storm this year. OpenAI’s ChatGPT has been a major factor in that. Before ChatGPT, the notion of AI was opaque and hard to grasp for the average American. What does it actually mean for me, my business, my life? ChatGPT changed that, because it communicates with you like a person. Ask it a question, and unlike Google, which surfaces other websites that may or may not have the answer, ChatGPT answers you clearly, thoughtfully and directly. It’s an enlightening experience the first time you use it.
Now, what does this mean for equipment rental? How else might AI serve me and improve my business, save me time, save me money or drive growth? Beyond answering questions, these Large Language Models (LLMs) like ChatGPT can process not just text but reams of data, to produce highly contextualized answers and provide proactive tips. It’s this marriage of data, context and communication that makes them powerful. And moreover, why this is different than just producing reports is what the name “machine learning” implies — with feedback it can adapt, or learn, based on your responses or follow-up questions to its answers.
Here are 10 ways the equipment rental industry can leverage AI. This isn’t years from now — the power is here today and will continue to evolve rapidly. Developing an effective AI strategy will become core to winning in the rental market.
1. Dynamic pricing. By leveraging your inventory management system, seasonal trends, and competitor rates and availability, AI can help surface real-time pricing suggestions and even make automatic adjustments. AI can help maximize your rental revenue by adjusting upward when demand is high and inventory levels in your region are low, or on the flip side, ensure you don’t lose a sale by adjusting downward just the right amount to remain competitive.
2. Demand forecasting. “Which pieces of equipment have been most underutilized, and what should I purchase today to stay ahead of demand?” AI can analyze historical rental data, customer behavior, market trends and external factors to predict future demand for equipment. This can help you optimize inventory levels, buy new equipment with more conviction on utilization rates, plan maintenance schedules and allocate resources across your business more efficiently.
3. Predictive maintenance. Repairs are far more costly when done after something has gone awry than if done preventatively. The combination of usage data from your core software suite, telematics and sensors can help you put in place a predictive maintenance plan. Get ahead of any potential breakdowns or repairs based on probabilities of issues arising. Reduce downtime and minimize maintenance costs overall. Think of this as preventive medicine — your annual checkups help you avoid major issues down the road. With AI, those checkups can happen in real-time.
4. Customer recommendations. AI algorithms can analyze customer preferences, past rental history and other relevant data to provide personalized equipment recommendations. This enhances the customer experience and increases the likelihood of repeat business.
5. Chatbots and virtual assistants. “I’m building a pool in my backyard. What equipment do I need to get started? Do you have it available? If not now, when will it be available?” This is where data, the ability to communicate and the ability to learn, create a powerful trifecta. AI-powered chatbots and virtual assistants can communicate directly with the customer in a consultative manner to provide the right equipment to them at the right time. For net new customers, AI can handle customer inquiries, provide support and assist with rental bookings right on your website — in many cases without human intervention.
6. Help center integrations. Tying to the previous two points, companies can “train” a model by uploading every customer service ticket ever answered along with knowledge base articles. By combining your data set with an LLM, you can decrease a significant number of customer service problems. It automatically prioritizes answers that received higher feedback ratings from the past and adjusts in the future as feedback comes in. Allow your team to focus on the solutions that require a personal touch and save their time by automating much of the rest.
7. Smart asset tracking. AI combined with IoT (Internet of Things) technologies can enable real-time tracking of equipment location, usage and condition. This helps rental companies monitor assets, prevent theft, optimize fleet utilization and improve overall logistics.
8. Image recognition and damage assessment. AI can analyze images or videos of rented equipment to detect and assess any damages upon return. This streamlines the inspection process, reduces human error, and ensures fair and accurate billing for damages.
9. Fraud detection. Behind the scenes, most major payment processors are leveraging AI algorithms to analyze transactional data and identify potential fraudulent activities. This helps rental companies minimize financial losses, reduce headaches from chargebacks and other credit card issues, and provide a clean, safe and streamlined customer experience.
10. Data analytics and reporting. The larger the rental company, the larger the volume of data you produce. From data comes insights. AI can assess and extrapolate information from reams of rental data to drive better decision making. It can provide reports on equipment utilization, customer trends, profitability and other key metrics, enabling rental companies to make informed strategic decisions.
Many of you may read this and worry this means jobs are going away. In today’s tight labor market, and given how hard it is to hire great folks, what would you do if you could free up 10 hours a week of your staff’s valuable time? How might you refocus your team to do the things that only people can do? Go visit customers in the field, go above and beyond in customer service and delight, be thought partners on their projects and help them grow their own customer base.
History has shown that companies that try to deny or hide from technological innovation get eaten by it. Those who adapt will thrive and win. While there will certainly be ethical questions about AI, and plenty of negative consequences that we can’t fully grasp or predict today, the right approach is to figure out how it can actually work for you and not against you. Then test small, learn, iterate, repeat.
Importantly, you don’t need to go it alone — your manufacturers and software providers should be a step or two ahead. Quipli, for one, certainly is. Ask your providers how they are leveraging AI on your behalf or how they plan to in the future.
Above all, AI will have the hardest time replacing one thing — the power of genuine human connection. At the end of the day, that’s what business is all about and that’s why customers will rent from you. Begin to leverage software, technology and AI to power the rest and focus your people on human connection.
Kyle Clements is CEO of Quipli, Atlanta, an equipment rental software company primarily serving heavy equipment and general tool rental companies. For more information, visit quipli.com.