Rental Center: The young Titans

Titan Machinery has become a big player in equipment rental.

Todd Rohloff, Titan Machinery
Todd Rohloff, Titan Machinery district rental manager.
Mike Hall, Titan Machinery
Mike Hall, Titan Machinery senior marketing manager.

While rental centers tend to be decades old and span more than one generation, Titan Machinery, based in West Fargo, North Dakota, is a mere fledgling.

The rental operation was established in 2012 as an extension of Titan Machinery, an agricultural and construction equipment dealer with 79 branches in the United States and 17 branches in Europe. Since then, the rental division has been on the fast track to filling rental needs through 27 rental locations, says Todd Rohloff, Titan Machinery district rental manager.

“The company expanded its rental fleet from $10 million to upward of $150 million within the first two or three years,” he explains. “We are maintaining a fleet between $120 and $140 million over the last three years.”

The publicly held company (Nasdaq:TITN) is one of the largest dealers for Case agricultural and construction equipment in the world; it rounds out its rental fleet with equipment primarily from JLG, Skyjack, K-Tec and Wacker Neuson. “We strive to provide the best product and service we can for our customers. That is our focus,” says Rohloff.

Titan Machinery has 27 dealerships with full-time rental departments in 11 states that stretch from Wisconsin to Arizona. Rohloff says the equipment mix is about half earthmoving equipment, half other rental units covering a wide array of equipment normally found in a rental yard. However, they also rent aggregate processers, cranes and logging equipment. On average, each rental center employs about 10 people. The rental division, based on public financial reports, is estimated to have $40 million in annual income.

Opportunity for growth
With strong roots in the agricultural market that go back to the early ’80s, Titan management was looking for logical expansion opportunities at about the same time the Great Recession hit. “The thought process at the time was to expand into another market, to expand our customer base into a potentially healthy-margin business to complement our equipment sales and service side, which are our core competencies,” says Rohloff.

"During that time, we saw more interest in equipment rental,” says Mike Hall, Titan Machinery senior marketing manager, “As we looked at it, it became clear that the rental division had to have a dedicated sales and service force to best serve customers.

“We were finding that construction firms, after the recession, changed their thinking about equipment purchases. They were looking for ways to reduce risk and overhead and rentals made more sense to them,” Hall says. “Our target customers were experts in HVAC, mechanical systems, landscaping and excavation and less than experts in equipment maintenance and repair. Equipment rental leverages our core competencies so they can concentrate on theirs.”

From professional hockey to rental professional
Before working with Titan Machinery, Rohloff worked for a national chain rental operation.  Before that, he played professional hockey for eight years with a few stints in the NHL for the Washington Capitals and Columbus Blue Jackets after playing for Miami University in Ohio. “It was quite a run as a hockey player, but today, I am now a rental professional and I love it. Every day is an opportunity to help build the communities we live in, provide solutions for our customers and help our employees grow.”

Streamlined equipment check-in
Titan Machinery has deveoped a streamlined equipment check-in process for rentals returning to the yard.

“The team culture I learned in hockey transfers well to the rental business and to Titan Machinery. We are all very team-focused and in hiring new employees, we look for that trait as well. We want them to be as excited as we are for them to join the Titan team. This is a team game. It’s a very competitive industry with many moving parts, and even more so with Titan’s spotlight on rental growth,” he says.

Rohloff says their best customer-building tactic is developing lasting relationships with customers. “Our 800 number is staffed with a live person 24/7, however, most customers call their sales representative directly when they have a question, need or problem.

Case equipment
Titan Machinery is one of the largest dealers for Case agricultural and construction equipment. 

“Our rental salespeople specialize in equipment rental, however, our equipment and rental sales teams work well together exchanging leads. It’s all about providing our customers with the best solutions to help them complete their jobs,” Rohloff says.

New hires are integrated into the operation quickly and effectively. They go through frontline training with team members that Titan district managers call “champions.”

“They are experienced in providing the best customer experience. For example, when we hire a new salesperson, that person goes to a specific branch to ride with one of our champion salespersons. From there, they will work with an inside sales champion to learn the inner workings of how we do things. It’s a great way to bring new people up to speed on how we work together as a team to provide the best rental equipment experience and helps us create a culture of success and consistency across the district,” Rohloff says.

Continuous improvement is part of the Titan culture. While there are formal training aspects to Titan’s continuous improvement process, most of it is customer driven. “We find our frontline employees come up with the most effective continuous improvement projects,” says Rohloff.

 “A great example is how we’ve streamlined the process for checking in and out rental equipment electronically.  It’s easier for customers and it makes our rental departments more efficient.  So it’s a win-win for everyone.”

Fine tuning the fleet
With its deep roots with Case and New Holland equipment, it’s only natural that their excavation and material handling fleet are made up of models from those brands. Instead of filling in other aspects of the rental fleet with a rainbow of equipment brands, the rental managers choose to make a best-in-class brand decision and stick with models from those brands.

“We have factory-certified mechanics for our major brands. They are experts at diagnosis and repairs. We can complete repairs faster and more reliably because they are trained by the factory instead of learning as they make repairs. That means our rentals are more reliable and productive,” he says.

Titan Machinery rental locations
Titan Machinery has 27 rental locations throughout the midwest and western United States.

Titan Rental facilities serve huge expanses in the Bread Basket and Mountain states; it’s not uncommon for deliveries to be 150 miles from the rental center. “In those cases, it’s even more important that equipment going out on rent will be reliable. A customer with a piece of equipment with problems isn’t going to like waiting three hours for a repair person to show up,” he adds.

Future fleet additions will include attachments that can help them leverage their smaller excavation equipment. “There is a tremendous amount of repair-, rebuild-, replace-type work out there, so demolition is becoming a bigger segment for us.”

Hall sees Titan’s success based on a four-legged stool. “Our business model is based on equipment sales, service, parts and rental. We are constantly listening to customers’ needs and adjusting the rental fleet to meet those needs. For example, backhoe loaders used to be a very important segment for us, however, more renters are wanting small track excavators, track loaders and skid steer loaders,” Hall says.

As Titan Rental managers look to update equipment, they are increasingly challenged with technology that adds expense and can create reliability issues caused by uneducated or unaware renters and operators. “Even if we explain the importance of DEF in Tier 4 Final-certified engines, if users ignore low level warnings, they soon find the machine will automatically derate. If they ignore regeneration cycles, it may require a repair call to hard-reset the system. The increasing complexity can make the equipment harder to fix and appear to be less reliable. Rental customers want the machine to work, not needing repairs,” Hall says.

Future appears bright
Titan Machinery’s foray into the rental market appears deliberate and well thought-out following a strategy that is anchored with customer focus, commitment to continuous improvement and service support. “It’s all a stepping stone. Every experience in the rental business takes you to the next one,” says Rohloff.

“It’s very much a team experience. After retiring from hockey, I went through several jobs looking for one that most closely resembles the team environment. The rental business is the closest thing I have found.”