Rental Center -- Sharpen the focus
Air Compressor Solutions specializes in supplying compressed air to a variety of customers in the Permian Basin and beyond.
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Once air Compressor Solutions quantified the demand for portable compressors in the Permian Basin, it was easily able to justify purchasing additional units. Today, it is hitting the sweet spot of 90 percent utilization. Units range from 185 to 700 cfm. |
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“Our strategy now is to buy used machines that are 2015 or older models and send them to be refurbished as they begin to wear.” |
| Paul Cerda, Angel Nabarrette and Bill Hewitt are the front-line team for the rental operation at Air Compressor Services. |
At 10,000 feet, the squares become vacant lots. At 1,000 feet, an oil well is visible on each of the lots. Pumpjacks are spaced 300 to 500 feet apart on the ground below and throughout the oil-rich Permian Basin.
“The construction and industrial contractors who serve the oil industry are our primary customer base,” says Brian Stubbs, owner and president of Air Compressor Solutions (ACS). Air Compressor Solutions provides reliable compressed air energy solutions, generator equipment, equipment rental and engine services for commercial clients. ACS is a dealer for Doosan Mobile Equipment Boss Engineered Air Systems, and Ingersoll-Rand. ACS also sells and services Cummins, Honda, Kohler and Power Solutions International engines as well as other brands.
“Rentals have always been a substantial part of our business. When we formed a team focused on our rental customers, we quickly found rentals to be a sustainable part of our growth,” Stubbs recalls. “Rental salesperson, Bill Hewitt, along with other team members, began tracking customer requests. The information gathered allowed the team to optimize the use of inventory to fit the customer needs.
“We offer a wide range of products including generators and light towers, but we have found a unique customer base in our air compressors which has become the majority of our rental fleet. Over time, we compiled a list of requested compressor models that were not in inventory,” Stubbs says.
To meet the growing demand, ACS added more than 30 portable compressors to the rental fleet in 2018. “Matching our rental fleet to demand justified the purchase of many units within a single year, providing growth for our company as a result of serving the needs of our customers,” Stubbs says. “We have a 90 percent utilization rate for our air compressors and we are not missing many rentals, either, so I believe we have hit our sweet spot for the number of units in the fleet to meet demand. At Air Compressor Solutions, we endeavor to be leaders in innovation, striving for excellence, and earning the reputation of being the most highly respected service company in each of the markets we serve.”
Models and applications
Many of the 185 cfm units are used by contractors that serve the oil industry. The medium-sized 350 cfm units are available for sandblasting while the units greater than 700 cfm units are called in to push pigs through oil pipelines. The pigs, depending on the model, are used to clean or inspect pipe interiors, and the compressed air behind them pushes them through the system. The models greater than 700 cfm are also used to pressure-test or dry oil pipelines after installation or repair before they are put into service.
“While the high-pressure units are the most cost-effective source of rental income, the smaller units are priced to be competitive in all markets, including rental centers owned by the national chains,” Stubbs adds.
In addition, ACS is also very competitive on re-rentals to other rental houses. “Often, our units are used in re-rental agreements and the businesses have their own crews for maintenance, so those units are available at a very good rate,” he says.
Refurbished units
While the new Doosan compressors and generators are Tier 4-compliant, Stubbs says it takes time to educate customers on the care and application of these systems. “Educating customers on correct sizing and application of the new emissions packages has been a challenge,” he says. To address this problem, Stubbs is actively looking for used compressors that can be refurbished through Doosan.
“Doosan does a wonderful job with its refurbished/remanufactured program. When current rental fleet machines are not meeting our standards, we have the ability to send those machines to Doosan to be remanufactured. When returned, these machines function as if they were new,” says Stubbs. “Our strategy now is to buy used machines that are 2015 or older models and send them to be refurbished as they begin to wear,” Stubbs says.
Choosing markets
As other rental centers strive to be a one-stop shop for all equipment rental needs, ACS chooses to focus on the niche of compressed air. “Although we do carry light towers, it’s not our main focus because it is a saturated market in our area. In the past, we rented large amounts of auxiliary equipment, but that market changed when customers began buying or renting auxiliary equipment within other packages. Generators are a growing sector for us, but air compressors are the majority of our rental fleet.”
Stubbs says ACS achieves economies of scale by standardizing equipment in the rental fleet. “We are trying to streamline what we rent. Currently, we rent hoses and air dryers and we are researching the many complementary accessories that we could be renting,” he says.
In contrast to equipment dealers that both sell and rent equipment, Stubbs says there is a great partnership between the sales and rental teams at ACS. “The equipment salespeople typically have customers looking to buy a used machine. We see our rental fleet as an extension of our sales inventory. This allows us to solve many customer situations with a range of options. Customers are receptive to having multiple options when seeking to expand their own businesses,” Stubbs says.
Serving the clients in the oilfield presents the challenge of transporting the compressors to remote locations. With the larger compressors, Stubbs finds that mounting them on trailers works better than using the wagon-wheel carriages that come with some units. “These units are easier to transport on rough oil field roads using a triple-axle trailer. The original running gear cannot move the large units down all of the roads our customers travel. We find units that are easier to move actually come off rental sooner, allowing us to service more customers.”
Pick-up and delivery
Unlike most rental centers, ACS does not employ full-time delivery drivers. “A CDL driver in the Permian Basin can easily make $80,000 per year and it is just not cost effective. Customers will often pick up equipment themselves or we hire a hot shot to deliver and pick up units,” says Stubbs.
Once units are out on rent, most are maintained by the customer. “Many customers service other equipment on the job sites and do not need us to do that work. We offer a flexible option on maintenance so they can perform maintenance, or we can provide this service. This offers options to our customers that will best fit their needs,” Stubbs says.
Making a move
ACS had to add rental yard space to accommodate the growth of the rental fleet. “We grew so much last year that we were running out of room. It was particularly tense last December when many units came off rental over the holidays. We would have run out of room if not for the added yard space,” says Paul Cerda, rental parts manager.
“When the building and adjoining lot next door to our business location became available, we had to move fast in to acquire it,” Stubbs says. “With this added space, we have seen added efficiency in moving equipment and easy access for our customers picking up and dropping off equipment.”
The use of a telematics system for quickly diagnosing problems in the field is something ACS is considering adding to its fleet. “We serve an area from Abilene to Ozona, to Fort Stockton, and Pecos, in west Texas, and from Artesia to Carlsbad and Hobbs in southeast New Mexico and also into Oklahoma and Kansas. ACS also has a new location in Amarillo specializing in serving agricultural and construction contractors. The use of telematics will make it easier to get to a location and solve issues when they occur,” says Cerda.
“When we receive a call from a customer having issues with a machine, we can pinpoint the location and check the unit remotely for diagnostic codes to know how to address the problem. We are excited to move forward with implementation of that service. It will improve machine longevity and I believe it will vastly improve customer support and customer relations. In the past, the fleet was not as large as it is now and telematics will help us to better manage our fleet,” Cerda says.
Sales support
Cerda credits his fellow rental employees with making the customer experience with ACS a positive one. Having highly motivated team members who are committed to exceeding customers’ expectations with every new transaction and at every point of contact ensures good customer relations. “We have a great team. Bill Hewitt has been in the rental industry for more than 29 years and I have learned a lot from him. We are also lucky to have Angel Nabarrette, who just came on staff about a year ago. He is young and eager to learn. I see him doing great things,” Cerda says.
Social media
Stubbs says Air Compressor Solutions has experienced good results from Facebook and LinkedIn postings for rentals and equipment sales. ACS has been using social media postings for about two years.
ACS uses an advertising agency to develop a lineup of ads. “We work with them to develop ads and posts to match our current business environment and customer needs. LinkedIn has been an especially effective social media outlet. We have generated new business through LinkedIn” says Stubbs.
“The salesperson takes photographs of our generators, which are more challenging to rent and sell in this market. The LinkedIn ads lists the generators and sizes we have available for immediate rent or purchase. Posting a nice photograph along with #generators, #portable power, has resulted in many online comments and calls,” Stubbs says.
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Social media: How to get started
Establishing a social media presence, for some, is like learning a foreign language. The task looks formidable and requires learning content and management systems, developing an incredible attention to detail and practice.
When deciding to take Air Compressor Solutions into advertising on social media, ACS reached out to Hearst Media Services for assistance. Jennifer Siefert, Hearst Media Services account manager, worked with ACS to establish a social media presence for the rental and sales teams.
“We typically recommend ad strategies based on the B2B nature of the business and the need to reach a very niche audience. This is best achieved through targeted ads,” Siefert says. “Facebook, Instagram and LinkedIn can be very effective. LinkedIn is a vital resource for the right businesses to establish their expertise in an industry and connect with potential customers. However, you simply can’t ignore the massive reach and sophisticated ad targeting available on Facebook and Instagram.”
Building a plan
“The first step is to identify the most profitable products and services and what the main business objectives will be for the social media campaign. From there, social content and ads are developed that will resonate with the target audience to increase reach and brand exposure and improve engagement and traffic to the business’s web site and social pages,” Siefert says.
“In an industry like ACS, it is important to provide a stream of content that is digestible by a mass audience who may be new to the products and services offered while still maintaining an air of professionalism and expertise to avoid alienating potential B2B clients who know exactly what they are looking for and understand the technical aspects of the industry,” she says.
Gauge your results
Each client has its own goals and key performance indicators, so Siefert strives to tailor the campaign to achieve them.
“Cost per engagement or action can be higher with B2B clients than the average across other industries, but with the right targeting applied, the content and ads resonate with users and drive solid results,” she says.
“Clients must understand that authenticity and original content are key in social media marketing. We strongly encourage our customers to participate in their social marketing efforts either by providing media for the media firm to use in the campaign or posting their own to complement our services. It’s also important that clients understand the importance of balance between self-promotional posts and engaging or informational content for their audience. It’s easier if everyone understands and clarifies the clients’ business goals to one main focus and that’s even more important if the client is working with a smaller advertising budget. We must concentrate our efforts and make a strong impact on that one area, rather than spread ourselves too thin,” she says.
This article appeared in the September-October 2019 issue of Pro Contractor Rentals magazine. © 2019 Urbain Communications LLC. All rights reserved
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