Caterpillar Realigns Metrics in Focus on Rental

March 25, 2019

In 2017, Caterpillar adjusted its strategy toward rental, “elevating” its focus in a market the company has served for decades, says Kurt Norris, director of global rental & used equipment services. The adjustment included an assessment of its metrics, and resulted in a change in the way the corporation works with its dealers.

“We’ve changed the ways we measure between ourselves and our dealers,” Norris says. Metrics now are rental-industry metrics rather than manufacturer-centric.

“This is a growth industry and a growth opportunity for Caterpillar,” Norris says. “It’s a profitable industry for not only ourselves and our dealers, but also the customer. It provides a profitable solution for the customers that don’t want to buy a piece of equipment outright.”

Norris says the company’s shift directly relates to its inability to capitalize on the growing rental market.

“Our results in this business were not meeting our expectations,” he says. “It’s a growing industry, and it’s a healthy industry. Caterpillar needs to be much more effective in that industry.”

Norris explains how customer needs over the past 10 to 15 years have been shifting from ownership to what he describes as “usership.”

“Customers are trying to control their capital spending,” he says. “If they get a deal and they don’t have enough equipment, they’ll use the Cat rental solution. They also want to supplement their core fleet with the latest technology and the latest equipment. They can rent it, and if they like it maybe they’ll move into a purchase decision later on down the road.”

Caterpillar delivers rental equipment through it dealer network, with dealerships setting up Cat Rental Stores to handle the market segment. For equipment Caterpillar does not manufacture, such as aerial work platforms, Norris says the company works with vendors to secure that equipment for the Cat Rental Stores.

“Rental sales people need to have a customer-first mentality,” he says. “What solution is that customer seeking, and then what pieces of equipment and/or solutions can we provide in order to make that customer profitable.

“If the customers are profitable, the Cat Rental Store and Caterpillar will be successful.”